Florida Real Estate Commission v. McGregor

336 So. 2d 1156, 1976 Fla. LEXIS 4482
CourtSupreme Court of Florida
DecidedJuly 30, 1976
Docket46956
StatusPublished
Cited by15 cases

This text of 336 So. 2d 1156 (Florida Real Estate Commission v. McGregor) is published on Counsel Stack Legal Research, covering Supreme Court of Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Florida Real Estate Commission v. McGregor, 336 So. 2d 1156, 1976 Fla. LEXIS 4482 (Fla. 1976).

Opinion

336 So.2d 1156 (1976)

FLORIDA REAL ESTATE COMMISSION, Appellant,
v.
Mike McGREGOR, et al., Appellees.

No. 46956.

Supreme Court of Florida.

July 30, 1976.
Rehearing Denied October 8, 1976.

*1157 Frank A. Wilkinson, Orlando, and John Huskins, Winter Park, for appellant.

Thomas C. MacDonald, Jr. and D. Frank Winkles of Shackleford, Farrior, Stallings & Evans and James W. Kynes, Tampa, for appellees.

SUNDBERG, Justice.

This matter is before us on direct appeal from the Circuit Court of the Thirteenth Judicial Circuit in and for Hillsborough County, Florida. We have jurisdiction of the appeal pursuant to Article V, Section 3(b)(1), Florida Constitution, and Rule 2.1(a)(5)(a), Florida Appellate Rules, in that the circuit court initially and directly passed upon the validity of Section 475.01(2), Florida Statutes,[1] by holding that such subsection is unconstitutional as applied to the appellees under the particular facts of the instant case.

On July 17, 1970, appellant Commission filed a complaint in the Circuit Court of Hillsborough County, seeking an injunction against certain actions of Mid-State Homes, Inc. and of its mortgage representatives[2] which were alleged to violate Chapter 475, Florida Statutes, known as the Real Estate License Law. The complaint alleged that the mortgage representatives were willingly selling certain real property of Mid-State without a Florida real estate license. The complaint was dismissed with prejudice, and the Second District Court of Appeal, without considering the constitutionality of the instant statute, affirmed this dismissal at 254 So.2d 566. This Court, reviewing the case on certiorari, held that the Statute did *1158 pertain to Mid-State's mortgage representatives and quashed the decision of the District Court of Appeal, directing further proceedings in the Circuit Court. 268 So.2d 529. Upon remand the Circuit Court held a final hearing on the constitutional issue. Finding that Mid-State had been unable to hire licensed brokers to sell its property because of the peculiar job requirements involved, that court concluded that the statute was unconstitutional as applied to these defendants because it "imposes a burdensome and discriminatory classification with no countervailing public benefit and without any reasonable relationship to the public welfare." The facts upon which the Circuit Court predicated its judgment essentially are as follows:

Jim Walter Homes, Inc. sells and builds "shell-type" homes on the buyer's real estate. The purchase is financed by the defendant-appellee Mid-State, which buys the receivables (note and mortgage) from Jim Walter Homes, Inc. Mid-State operates as a collection or mortgage servicing agency in collecting the receivables it purchases, nearly all of which involve mortgages on small homesteads located in rural areas and valued from $2,500 to $8,500. Currently, Mid-State owns about 3200 such accounts totalling approximately $29,000,000.

In the course of its business Mid-State may obtain title to real property by foreclosure or by deed in lieu of foreclosure. At any given time Mid-State has title to only ten to twelve such repossessed homes in the State of Florida. Of these ten to twelve repossessions, usually about half of the houses are sold as personalty after removal from the land while the remainder are sold by representatives of Mid-State. Based on stipulated facts it is established that the company has not utilized registered real estate brokers to sell these remaining repossessions because such brokers have been unwilling to handle this type of property, due to its location and to the small amount of commission available to a broker at standard Florida rates. Mid-State employs two field representatives to find purchasers for the properties. These representatives are not, and never have been, registered real estate brokers in Florida. They are each salaried employees of Mid-State's Tampa office. Each works for no other company and spends approximately 15% of his salaried time attempting to locate purchasers for the repossessed properties. These individuals do not receive any commission or bonus from any sale of real estate, and their salaries are established without reference to specific property sales. They are not officers or directors of Mid-State but are salaried employees. These representatives generally canvass the countryside in which a home is located to determine if anyone nearby might want to move into the house or might otherwise have an interest in it. They never advertise in their individual names but utilize only the corporate name in their newspaper advertisements and on signs posted on the subject property. Mid-State alleges that, if it had to rely on the conventional brokerage fee system, the houses would have to be abandoned or substantial losses incurred.

The issue presented on this appeal is whether subsection 475.01(2), Florida Statutes, is unconstitutional as sought to be enforced against appellees. The Circuit Court answered this query in the affirmative and we concur.

Appellant maintains that subsection 475.01(2), Florida Statutes, is neither unconstitutional vel non nor as it is applied to the appellees. Appellant cites State ex rel. Davis v. Rose, 97 Fla. 710, 122 So. 225 (1929), as dispositive of the issue because in that case this Court upheld the constitutionality of a law enacted in 1927 which was substantially identical to the statutory provision here under consideration. The Rose court viewed the Real Estate License Law as a proper exercise of the police power of this state for the protection of the buying public from incompetent or unethical realtors. We have no quarrel with the holding in Rose, supra, because clearly the Legislature in the exercise of its police power has the authority to regulate those engaged in the real estate profession to protect the public *1159 from the consequences of unethical or substandard conduct. As pointed out by appellant, in the public interest[3] this Court exercises the same authority and jurisdiction over members of the legal profession. However, the precise question presented in this appeal was not before the Court in the Rose case, supra, and, therefore, that decision is not dispositive of the issue here presented.

By subsection 475.01(2), Florida Statutes, the Legislature has granted several exceptions from its definition of a "real estate broker" and a "real estate salesman", each of which by further provisions of Chapter 475, Florida Statutes, are required to be licensed. Chief among these exceptions are (i) "a person who shall deal with property in which he is a part owner, unless said person shall receive a larger share of the proceeds or profits from the transaction than his proportional investment therein would otherwise justify, such excess share being directly or indirectly the result of the service of buying, selling, exchanging or leasing said property" and (ii) "one officer of every corporation engaged in the sale of its own properties who shall be its president unless otherwise provided in its charter or bylaws, if said corporation shall not otherwise be classified as a real estate broker or a salesman." The threshold question, then, is whether the exception in the case of corporations constitutes a reasonable classification when applied to appellees while they are engaged in the activities of which appellant complains. As pointed out in McLaughlin v. Florida, 379 U.S. 184, 85 S.Ct.

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Bluebook (online)
336 So. 2d 1156, 1976 Fla. LEXIS 4482, Counsel Stack Legal Research, https://law.counselstack.com/opinion/florida-real-estate-commission-v-mcgregor-fla-1976.