Payne v. Volkman

198 N.W. 438, 183 Wis. 412, 1924 Wisc. LEXIS 197

• Court: Wisconsin Supreme Court
• Decided: April 8, 1924
• Status: Published

Opinion

Rosenberry, J.

The trial court sustained the demurrer upon two principal grounds: (1st) that it did not appear from the complaint that the plaintiffs were licensed real-estate brokers under sub. (5), sec. 1636 — 225, Stats, (now ch. 136), and are therefore not entitled to collect a commission as such; (2d) that it appears upon the face of the complaint and upon the statements made by counsel that the corporation was not authorized to transact business because of its failure to comply with sec. 1773, which provides:

“No such corporation shall transact business with any others than its members until at least one half of its capital stock shall have been duly subscribed and at least twenty per centum of its said capital stock actually paid in.”

We find it necessary to consider the first question only. It appears that the plaintiff Payne was a resident of the state of Minnesota and had no real-estate broker’s license. The contract is upon its face a joint contract made by Payne and Krcma with the defendants. The statute relating to real-estate brokers (ch. 136) is very broad. It defines a real-estate broker as follows:

“Any person, firm or corporation, not excluded by subsection (3) of this section [which relates mainly to rel ceivers, trustees, etc.], who, for another, and for commission money or other thing of value: (a) sells, exchanges, buys or rents, or offers or attempts to negotiate a sale, exchange, purchase or rental of an interest or estate in real estate. . . .”

The prohibitory language is as follows:

“On and after January 1, 1920, no person, firm or corporation shall engage in or follow the business or occupation of, or advertise or. hold himself or itself out as or shall act temporarily or otherwise as a real-estate broker or real-estate salesman in this state, without first procuring a license therefor as provided in this section.”

Under the terms of this law there can be no question but that the plaintiff Payne was prohibited from contracting to render services as a real-estate broker. It appears that Krcma, who was a resident of Ladysmith, had a real-estate broker’s license. While a licensed real-estate broker is permitted to employ agents who are designated real-estate salesmen, the law does not authorize a partner to engage in the real-estate business unless he joins in the application. The contract is joint, and if invalid as to the plaintiff Payne it must be held invalid in to to. While the statute is drastic, we canot say that it is so unreasonable as to be void. The evil aimed at was very great. Citizens of this state were being defrauded in large amounts through the activities of so-called real-estate brokers, many of whom were not citizens of this state and who came here for the purpose of exploiting its people. We are forced to the conclusion that the plaintiffs cannot recover upon this contract. De Wit v. Lander, 72 Wis. 120, 39 N. W. 349; 3 Williston, Contracts, p. 3072, § 1766; 12 L. R. A. n. s. 575, note.

It is urged that the contract was executed, that the plaintiffs had performed the agreements therein contained by them to be performed, and that if the contract be held void as to the real estate the plaintiffs are entitled to recover at least their commission upon the appraised value of the personal property. It appears that the real estate is of the estimated value of $32,000, the fixtures $2,000, and the stock of merchandise $6,000. It requires no argument to show that the sale of the real estate was the dominant consideration for the making of the contract. It was a contract primarily to sell the property of defendants to a corporation to be organized by plaintiffs. The organization of the corporation was an incident to the main contractual purpose. The contract is an entire one and is not severable. Sixta v. Ontonagon Valley L. Co. 148 Wis. 186, 134 N. W. 341; 4 Page, Contracts (2d ed.) § 2089, note 7, cases; also 5 Page, Contracts (2d ed.) § 2995, note 5, cases.

If defendants are not liable upon the contract they are not liable otherwise on the second and third causes of action. This disposes of the case, and we shall not consider the other questions raised.

By the Court. — Judgment appealed from is affirmed.