Mayo v. Lynes , 80 Ga. App. 4 ( 1949 )

1. 2. An action brought by real-estate brokers to recover damages for a breach of an exclusive-listing contract is subject to general demurrer when it fails to allege that the brokers had fully complied with the license laws, whether the point was argued and considered in the trial court or not.

3. The listing contract was not unilateral and without consideration under the facts alleged in this case.

DECIDED SEPTEMBER 10, 1949. William F. Lynes Jr. and B. Taylor Smith, trading as Lynes Realty Company, sued James B. Mayo and McGregor Mayo Jr., for damages for the breach of an exclusive-listing contract. The petition as amended alleged: that the defendants listed for sale with the plaintiffs, who are real-estate brokers, certain property known as "Mirror Courts," which is a tourist camp located about 12 miles from Savannah on U.S. Highway No. 17, at and for a price of $50,000; that under the terms of said contract the plaintiffs' commission was to be 10% on the first $25,000 and 5% on the balance so that the plaintiffs' commission amounted to $2625; that the plaintiffs advertised the property for sale and made efforts to sell same; that on May 13, 1948, the contract was renewed so that it should expire August 13, 1948; that on August 11, 1948, the plaintiffs by letter solicited the sale of the property to M. H. Hoffman of Mt. Vernon, N. Y.; that on August 10, 1948, an agreement was entered into between the defendants and M. H. Hoffman and Franciene P. Hoffman for the sale of the property, and on August 31, 1948, the sale was consummated for the sum of $50,000; and that the foregoing conduct of the defendants constituted a breach of said contract, and $2625 is claimed as damages for a breach of the contract and not as commissions for the sale of the property. Attached to and made a part of the petition was the exclusive listing contract executed by the defendants, which recites that, "In consideration of the sum of $1.00 paid by the undersigned realtor, the receipt whereof is hereby acknowledged, and the further consideration of your agreement to list, to advertise the same in such manner as you may deem advisable and your endeavor to sell the property hereinafter described, the undersigned being the owner thereof, hereby gives you the exclusive right and authority to sell the property hereinafter described for a period of three months from the date of this instrument, subject however, to renewals as hereinafter set out." The contract also provided as follows: "In the event a sale or exchange is made, or a purchaser procured therefor by you, by the undersigned, or byany other person, at the price above specified, or at any other price acceptable to the undersigned, during the life of this contract . . the undersigned agrees to pay your agent's commission in accordance with the schedule printed on the reverse side hereof." [Italics ours.] The contract was signed by James B. Mayo and McGregor Mayo Jr. Printed thereon was the acceptance of the plaintiffs as follows: "The undersigned hereby accepts the above agency contract on the terms and conditions therein set forth. Lynes Realty Co. R. C. Johnson."

The defendant, individually, filed a general demurrer and several special demurrers which were later cured by amendment. The court overruled both the general and special demurrers of the defendants respectively. To this ruling the defendants excepted. 1. The defendants' first contention is that the petition was fatally defective in that there is no allegation that the plaintiffs had complied with the license law as required by Code § 84-1413, which states: "No person, firm or corporation shall have the right to enforce in any court any claim for commissions, profits, option profits, or fees for any business done as real-estate broker or salesman without having previously obtained the license required under the terms of this Chapter." We agree with this contention. In the case of Bernstein v.Peters, 68 Ga. App. 218 (22 S.E.2d 614), where a wholesale liquor concern was suing to recover for certain intoxicating liquors sold, this court held that a general demurrer should have been sustained when the petition alleged that the plaintiffs were holders of a liquor license, but failed to show that at the time of the sale of the liquor a license had been acquired. The court in that case quoted from 37 C. J. 261, § 142, in respect to licenses: "It is incumbent on a person whose right to recover on a contract is generally dependent upon his having been licensed to plead and prove, as a part of his cause of action, that he had fully complied with the requirements of the license law; or else to plead and prove that, under the circumstances, the requirement was not applicable and he was not required to take out a license or pay a license tax." See also Meinhard v. Stillwell RealtyCo., 47 Ga. App. 194 (169 S.E. 732). The plaintiffs answer this contention by saying that, since this is an action for a breach of contract rather than for a recovery of commissions earned, no express allegation of compliance with Code § 84-1413 is necessary. This argument is without merit. A contract between an unlicensed real-estate broker who comes under the provisions of Code § 84-1413 and an owner of property whereby the broker agrees to sell same, is void and unenforceable (Padgett v.Silver Lake Park Corp., 168 Ga. 759, 149 S.E. 180), and any action brought by the broker whether for commissions earned or for breach of contract would necessarily fail. The plaintiffs having failed to specifically plead that they had complied with the license law rendered the petition fatally defective, and the trial court erred in overruling the general demurrer thereto.

It is contended by the defendants in error that a provision in the contract attached to the petition pertaining to "other licensed broker" amounts to an allegation that the plaintiff was a licensed broker. Whether the plaintiff was a licensed broker is not a matter of contract and an agreement that he was one would not make him one. The petition, plus the contract, alleges no more than that the parties agreed that the plaintiff was a licensed broker, or that the plaintiff represented that he was, and the defendants assumed the representation to be true. The provision in the contract was no more than a self-serving declaration and, together with the petition, did not amount to an affirmative allegation that the plaintiff was a licensed broker.

2. The plaintiffs contend that the question passed upon in the proceeding division of this opinion was not raised in the lower court, and, therefore, should not be considered by this court when raised for the first time here. This contention is without merit for the reason that a general demurrer necessarily raised the question of whether a cause of action was set forth and whether this particular point was argued in the lower court, is immaterial since any point necessary to determine the sufficiency of the cause of action was raised by general demurrer and is properly before this court. Moody v. Foster, 74 Ga. App. 829 (3) (41 S.E.2d 560).

3. The defendants' second contention is that this listing contract is unilateral and without consideration, and, therefore, unenforceable. For authority the defendants cite: Ocean LakeRiver Fish Co. v. Dotson, 70 Ga. App. 268 (28 S.E.2d 319); Garfunkel v. Byck, 28 Ga. App. 651 (113 S.E. 95);Barrington v. Dunwody, 35 Ga. App. 517 (134 S.E. 130);Brent v. Robins, 41 Ga. App. 542 (153 S.E. 777). We are of the opinion that the facts in the case at bar are substantially the same as those in Thompson v. Hudson, 76 Ga. App. 807 (47 S.E.2d 112), citing Hill v. Horsley, 142 Ga. 12 (82 S.E. 225), and the ruling therein is controlling on this question. This contention is also without merit.

4. In view of the ruling in the third division of this opinion it is not necessary to decide the defendants' contention that there was a substantial variance between the sale contract as made and the listing contract under which the plaintiffs claim their commission, as the action is not one to recover commissions.

Since the plaintiffs failed to allege that they had complied with the license law pertaining to real-estate brokers, the court erred in overruling the general demurrer.

Judgment reversed. Sutton, C. J., and Worrill, J., concur.