Hall v. Hard

335 S.W.2d 584, 160 Tex. 565, 3 Tex. Sup. Ct. J. 188, 1960 Tex. LEXIS 626

• Court: Texas Supreme Court
• Decided: February 17, 1960
• Docket: A-7117
• Status: Published

Opinions

MR. Justice Griffin

delivered the opinion of the Court.

This is a suit by respondent, Hard, against petitioners, Hall, et al to recover a commission. The parties will be referred to as they were in the trial court.

Hard, as plaintiff, alleged that by an oral contract defendant, Hall “employed plaintiff to attempt to find a buyer for the certificates, properties and other assets owned by said defendants;” that defendant, Hall, agreed to pay plaintiff a 5% commission if he would procure a buyer, ready, willing and able “to purchase these properties upon terms satisfactory to defendants.” Plaintiff alleged that he procured a buyer, to wit, J. B. Braswell and Braswell Motor Freight Lines who entered into a formal contract to purchase the “Hall properties” for the sum of $1,500,-000; that this purchase was consummated after securing the necessary approval from the Interstate Commerce Commission. Plaintiff alleged that he was the one who interested Braswell in “the Hall properties” while his' employment by Hall was in full force and. effect and that the “Hall properties”" were sold to Braswell; therefore,, plaintiff alleged, he was entitled to a 5% commission, namely $75,000, on the sale price of $1,500,000 paid by Braswell to defendant for such properties. Plaintiff further alleged that he had demanded payment from Hall and Hall had refused to pay him, whereupon he filed suit for recovery of the $75,000 commission and $15,000 attorney’s fees.

Hall answered with a general denial. The case was tried to a jury. The trial court submitted three special issues, to which the jury answered (1) that Hall agreed to pay Hard a 5% commission if Hard would procure a buyer of the Hall Motor Freight properties on terms satisfactory to Hall; (2) Hard procured such a buyer and (3) $10,000 was a reasonable attorney’s fee. There were no objections nor exceptions to the court’s charge by either party..

Plaintiff filed a motion for judgment on the verdict. Defendant filed a motion for judgment non obstante veredicto. Among the grounds urged by defendants was that the sale of the Hall properties involved the sale of real estate, and plaintiff had not pleaded and proven that he was a licensed dealer, under the Real Estate Dealers License Act (Art. 6573a, Vernon’s Annotated Texas Civil Statutes) as required bv Section 19 of such Act. Defendants also alleged that the sale of the Hall Motor Freight Line pronerties included the sale to Bras-well of capital stock in some of the cornorations owned by Hall; that plaintiff was not a licensed dealer in securities required by Art. 581-34, V.A.C.S., as a condition precedent to a recovery of a commission on the sale of capital stock. The trial court sustained the defendants’ motion for judgment non obstante veredicto and overruled plaintiff’s motion for judgment on the verdict.

On appeal the Court of Civil Appeals reversed the trial court’s judgment and rendered iudement for plaintiff against defendants for $75,000, plus $10,000 attorney’s fees. 318 S.W. 2d 108.

We hold that the Court of Civil Anneals was in error in its judgment. We shall first dispose of defendant’s claim that he was entitled to a judgment because plaintiff had no real estate dealer’s license.

Section 4 of Art. 6573a defines a real estate broker as “any person who, for another or others and for compensation or with the intention or in the expectation or upon the promise of receiving or collecting compensation: (a) sells, exchanges, purchases, rents or leases real estate; or (j) procures or assists in procuring of prospects, calculated to result in the sale, exchange, leasing or rental of real estate.” At the time of plaintiff’s employment by defendant to procure a purchaser ready, willing and able to buy the Hall properties, and at all times until the closing of the sale contract, Hall owned and used in his trucking business leases for longer than one year on terminal facilities, including real estate located in Jackson, Mississippi; Tulsa and Oklahoma City, Oklahoma; Dallas, Texas; and Monroe, Ouachita Parish, Louisiana. This latter lease had a provision whereby defendants had an option to purchase the leased property after ten years. All parties are agreed that it was necessary to the operation of a motor freight line that it have terminals in the principal cities served by it. The contract for the sale of the Hall properties, as submitted to and approved by the Interstate Commerce Commission, shows that Braswell had no terminals in Jackson, Mississippi; Monroe, Louisiana; or Tulsa and Oklahoma City, Oklahoma. Nowhere in plaintiff’s pleadings did he make any allegations that the leases were not included in the Hall properties, nor did he allege that his listing contract was one other than for the sale of the whole of the Hall properties. The sale contract required the purchaser to “assume the leases of all those freight terminals where the leases are assignable, which are now under lease to Hall or Transport [Hall Transport Co., a corporation], true copies of said assignable leases being attached hereto, marked Exhibit J.” Braswell further covenanted to save and hold Hall and Transport harmless in respect of such lease assumptions. Plaintiff argues that this provision binds only Braswell, but does not bind Hall to assign or transfer the leases on the terminals. A reading of the whole of the contract, however, shows that defendants were obligated to transfer and assign the leases. The contract further provides that it “is not severable and shall, as to each party, and as to all things required of each, be performable in its entirety.” Plaintiff, Hard, testified that at the time of the oral contract between him and Hall, the leases were not mentioned by name. He testified that Hall wanted to sell his trucking operations; that Hall told him that if he could secure a buyer for the operations that he (Hall) would consider selling; that his conversation with Hall agreeing to pay a commission was a contract for the sale of the Hall trucking properties; that he" was to sell for Hall everything in connection with the Motor Freight Lines; that nothing was said by either party that the leases were to be ex-eluded but that the sale was to include everything' that had anything to do with the trucking operations; that he and Mr. Hall were talking about selling the Motor Freight Lines.

On being questioned about his trade with Hall to pay the commission, Hard testified:

“Q. Now among the other assets owned by those companies were leases on terminals in Oklahoma and Louisiana. Did you, when you negotiated your trade,1 did you expect to leave out those leases?

“A. Everything that was involved in the Motor Freight Line.

“Q. Now they were the leases on the terminals. You know terminals are necessary for the operation of motor freight lines, did you?

“A. That’s right.

“Q. All right. Did you expect to leave out those leases?

“A. Not the ones Mr. Hall had, no. I expected Joe Bras-well to take them over, which would be natural.”

In answer to the question, “what was it that you claim Mr. Hall employed you to do ?” Hard testified “sell the operation, the Hall trucking operations,” and again, “I intended to sell the whole thing in one lump sum.”

All of the above testimony made a prima facie case that the leases on the terminals were included in the “Hall properties” which Hall employed Hard to sell. However, plaintiff Hard testified that he had nothing to do with the leases; that the price at which defendant Hall listed the properties for sale included only the Interstate Commerce Commission certificates under which defendant operated his truck line, and the furniture and equipment used in the business; that all that went with the properties was the certificates, furniture and equipment; and denied that his contract of employment covered the sale of the leases.

This being the state of the record a fact issue was raised as to whether the leases were included in the Hall properties. No issue was submitted to the jury, nor was any request made for the submission of an issue determining the above fact. Plaintiff contends that the burden was on defendant to secure a finding that the Hall properties did include the leases. Defendant claims the burden was on plaintiff to secure a finding that the leases were not included in the Hall properties.

If the Hall properties, which Hard testified he was employed by Hall to sell, consisted, in part, of the leases on the terminals above set out, then Hard is seeking to recover a commission on the sale of real estate. Under the provisions of Sec. 19 of Art. 6573a, it was the burden of Hard to plead and prove he was a duly licensed real estate broker, or salesman, at the time the alleged cause of action arose. The leases being for a term of longer than one year were “real estate” within the terms of Art. 6537a. Stroble v. Tearl, 1949, 148 Texas 146, 221 S.W. 2d 556, 558; Robertson v. Scott, 1943, 141 Texas 374, 172 S.W. 2d 478, 479 (2) ; 20-A Texas Jur. 374, Sec. 104.

1,2 The Real Estate Dealers License Act is an exercise of the police power of the State to regulate a private business which affects the public interest. As such the business may be reasonably regulated by the State. Gregory v. Roedenbeck, 1943, 141 Texas 543, 174 S.W. 2d 585(1). The Legislature has seen fit to regulate the business of real estate dealers by requiring that anyone engaging in that business undergo investigation and examination by representatives of the State, and secure a license from the Texas Real Estate Commission. The business practices of the real estate dealers are regulated and certain practices are prohibited. The manner and method of conducting the business is prescribed in certain matters. It is made a criminal offense to engage in the business of real estate broker, or salesman, without having procured the license as aforesaid. In addition, Sec. 19 denies the use of the courts of our State to a real estate broker for the recovery of his commission unless such broker seeking recovery alleeres in his pleadings and proves by the evidence introduced in the case that he was a duly licensed real estate broker, or salesman, at the time the alleged cause of action arose. The Legislature, having required such pleading and proof by the broker suing for his commission, we hold that when a fact issue is raised as to whether or not the properties sold by the broker included any real estate, the burden is upon the dealer or broker to secure findings that no real estate was included, and, therefore, he was not subiect to the Real Estate Dealers License Act. Unless he does so, he cannot recover his commission. To hold otherwise would be to disregard the intent of the Legislature in its regulations and provisions contained in the Act.

3 Our courts have required a strict compliance with the terms of the Real Estate Dealers License Act if a broker is to use the courts for recovery of his fees or charges for his services. In the case at bar it is undisputed that plaintiff was not a licensed real estate broker. On this phase of the case, therefore, he can only recover by showing that he was not employed to sell any real estate. If there is an issue as to whether or not his employment included the sale of any real estate, then he must secure findings that will relieve him of the requirements of the Act. If only the sale of personal property is involved, the broker is not under the terms of the Act.

4 Plaintiff has no pleading alleging severability of the Hall properties, nor of his employment to sell only a portion of the same. There was one consideration covering the sale of all of the Hall properties in the contract of sale, and although there were certain itemizations in the purchase agreement, the contract specifically stated it was not a divisible contract. We hold that the contract of employment was an entire and indivisible one. Stroble v. Tearl, supra, p. 559(2), and authorities there cited.

The reasoning in the cases of Clark v. Eads, Texas Civ. App., 1942, 165 S.W. 2d 1019, wr. ref., w.o.m.; Swift v. Kelly, Texas Civ. App., 1910, 133 S.W. 901, no writ history; and Paine v. Eckhardt, et al., Texas Civ. App., 1918, 203 S.W. 459, no writ history, while not directly in point, support our holding that the burden was on Hard to secure a finding that no real estate was included in the Hall properties which he was employed to sell.

5 Plaintiff contends that even though the sale of the Hall Motor Freight properties did involve real estate, and was governed by Art. 6573a, he is exempt from the provisions requiring him to plead and prove he had a real estate dealer’s license by virtue of Sec. 6(1) of the Act. This section reads as follows:

“The provisions of this Act shall not apply to the advertising, negotiation or consummation of any purchase, sale, rental or exchange' of, or the borrowing or lending of money on, real estate by any person, firm, or corporation when such person, firm or corporation does not engage in the activities of a Real Estate Broker as an occupation, business or profession on a full or part time basis. Plaintiff did not plead nor prove that he came within the terms of Section 6(1). In fact, that contention was never urged by the plaintiff except in this court. We do not find it necessary to construe the meaning of Section 6(1) for the reason that under this record plaintiff is not entitled to the benefit of Section 6(1).

In 130 A.L.R., p. 440, et seq., is found a thorough and learned discussion of the burden of allegation and proof in a cause of action, or a defense thereto, in a case where the principal enacting clause of a statute is subsequently modified in some way by another clause, phrases, section, subdivision, etc. The rule of law governing such cases is set out in Annotation II, a,2, p. 443, as follows: “Where an exception appears in a different section, subdivision, or clause from that containing the enacting words of a statute, or appears in another statute, the view is taken in many cases that the party relying upon the statute need not allege facts showing that the present case does not come within the exception such allegations being matter to be pleaded by the opposite party.”

With regard to the proof, this same authority on p. 479, quotes from Interstate Commerce Commission v. Baird (1904), 194 U.S. 25, 26, 37; 48 L. Ed. 860, 865, 866; 24 S. Ct. 563, as follows: “ ‘The general rule of law is that a proviso carves special exceptions only out of the body of the act; and those who set up any such exception must establish it, etc.’ Ryan v. Carter (1876) 93 U. S. 78, 83, 23 L. Ed. 807, 809; United States v. Dickson (1841) 15 Pet. (U.S.) 141, 165, 10 L. ed. 689, 698. The rule applied to construction is applied equally to the burden of proof in a case like this.” Plaintiff seeks the benefits of the exemption provided in Section 6(1). The burden of alleging and proving that he was exempt under the terms of this section was upon him. Lane v. Bell, 1909, 53 Texas Civ. App. 213, 115 S.W. 918, wr. ref.

6 Since a fact issue was raised by the evidence as to whether or not Hard’s employment contract included the sale of real estate, the trial court was in error in rendering the judgment non obstante veredicto. There was no issue submitted to the jury, and, of course, no finding by the jury as to whether or not plaintiff, Hard’s contract included real estate. The trial court having erroneously rendered judgment non obstante veredicto, there can be no presumptive finding by the trial court on the omitted issue in order to support the judgment rendered by the trial court. Rodriguez v. Higginbotham-Bailey-Logan Co., 1942, 138 Texas 476, 160 S.W. 2d 234; Williams v. Texas Emp. Ins. Ass’n., Texas Civ. App., 1939, 135 S.W. 2d 262, wr. ref.

Plaintiff’s cause of action was based upon one ground of recovery, to wit: the contract to pay him a commission for procuring a purchaser for the Hall properties. One of the elements of this ground of recovery, under the facts as they developed upon the trial, was whether or not the terminal leases were a part of such Hall properties. This question presents a fact issue. There being no request for a jury issue on this question, and therefore no jury finding, it was for the trial court to make a finding on this issue, upon proper request. Rule 279, Franki’s Vernon’s Annotated Rules of Civil Procedure. This court has no power to make findings of fact, but the trial court does possess such power.

Defendant contends that the Hall properties which were sold consisted, in part, of capital stock of a corporation or corporations. While there is evidence in the record supporting such a finding, the plaintiff denied that he was employed to sell any securities, i.e., capital stock of corporation. Plaintiff testified that he was employed to sell only the certificates of necessity and convenience owned by Hall and the equipment used in the operation of the Motor Freight Line operations.

Art. 581-34 provides, in part, that “no person or company shall bring or maintain any action in the courts of this state for collection of a commission for services rendered in the sale or purchase of securities * * * without alleging and proving that such person or company was duly licensed under the provisions hereof * * It is undisputed that plaintiff was not licensed under the Securities Act. The record in this case raised a fact issue as to whether or not the sale of the Hall properties consisted in part of the sale of securities as defined in the Securities Act. No issue was submitted nor requested on which a finding could have been made by the jury on this question.

What we have said above in regard to the Real Estate Dealers Act, the necessity for a license, and the burden of proof upon the unsubmitted issue applies with equal force to this phase of the case at bar. The trial court should also make a finding as to this issue, upon proper request. Based upon the trial court’s findings upon this issue, and upon the issue as to real estate being involved in the sale of the Hall properties, the Court will enter its judgment.

We therefore must remand the cause to the trial court with instructions to proceed with the disposition of the cause under Rule 279 just as though no judgment non obstante veredicto had been entered. Rodriguez v. Higginbotham-Bailey-Logan Co., Texas Civ. App., 1943, 172 S.W. 2d 991, wr. ref.; Id., 138 Texas 476, 160 S.W. 2d 234.

The judgment of the Court of Civil Appeals is reversed and this cause is remanded to the trial court for further proceedings in accordance with this opinion.

Opinion delivered February 17, 1960.

Associate Justice Culver not sitting.