Opinion
March 7, 1962 —
April 3, 1962.
APPEAL from an order of the circuit court for Milwaukee county: MYRON L. GORDON, Circuit Judge. Reversed.
For the appellants there was a brief by M. J. Levin, attorney, and Charles H. Kahn of counsel, both of Milwaukee, and oral argument by Mr. Levin.
For the respondent there was a brief by Harris Blumenthal, attorneys, and Alvin Richman of counsel, all of Milwaukee, and oral argument by Mr. Harold Harris and Mr. Richman.
Action to collect a real-estate broker's commission for the purchase and acquisition of land. The complaint alleges that both the plaintiff and the defendant Morris Hack are duly licensed real-estate brokers; that the defendant Morris Hack represented himself to be agent for an undisclosed principal and that the defendant Harold Sampson was known by all parties to be said undisclosed principal, and that said Morris Hack was duly authorized to act for and on behalf of said principal; that in June, 1960, the plaintiff and the defendants entered into an agreement whereby the defendants employed the plaintiff as their agent in the purchase and acquisition of a tract of land known as the Tehan tract, and that defendants agreed to pay plaintiff a real-estate commission for his services; that in compliance with sec. 240.10 of the statutes a memo of said agreement for the payment of a commission was reduced to writing and subscribed by the defendant Morris Hack and that said agreement is marked Exhibit "A," attached to the complaint and incorporated therein; that in compliance with and pursuant to the terms of said agreement plaintiff performed and fulfilled all the terms and conditions required of him but that defendants have refused to pay his commission of $15,000 or any part thereof for his services.
The defendants demurred to the complaint of the ground that the same did not state facts sufficient to constitute a cause of action. On October 9, 1961, an order was entered overruling the demurrer and defendants appealed.
Sec. 240.10, Stats., reads as follows:
"Every contract to pay a commission to a real-estate agent or broker or to any other person for selling or buying real estate or negotiating lease therefor for a term of terms exceeding a period of three years shall be void unless such contract or note or memorandum thereof describing such real estate, expressing the price for which the same may be sold or purchased, or terms of rental, the commission to be paid and the period during which the agent or broker shall procure a buyer or seller or tenant, be in writing and be subscribed by the person agreeing to pay such commission."
Unless the agreement marked Exhibit "A" and attached to the complaint complies with the statute the plaintiff has not stated a cause of action. He does not allege that the agreement entered into June, 1960, was in writing. The agreement attached to the complaint is dated August 4, 1960. The parties thereto are a Eugene Tehan and Charlotte Tehan, therein called the seller, and Morris J. Hack, as agent for an undisclosed principal, therein called the buyer. The agreement was signed by Charlotte M. Tehan and Morris J. Hack.
Under the terms of the agreement the seller agreed to sell and the buyer agreed to buy a tract of land described therein. The purchase price of said real estate was stated to be the sum of $215,000, of which $5,000 was paid at the execution and delivery of the agreement. The sale was to be closed on or before the 15th day of September, 1960, at the office of an attorney in Milwaukee. The agreement provided for conveyance by warranty deed upon payment of $75,000, of which $60,000 was to be in cash and $15,000 in a note payable to "the broker." In addition, the buyer was to assume a mortgage for $140,000 having a remaining term of two years and two months. The note to "the broker" was to be payable simultaneously with the payment of the mortgage. In case the buyer failed to carry out the agreement it was provided therein that all moneys paid thereunder should, at the option of the seller, be forfeited and paid to the seller as liquidated damages subject to deductions of broker's commission and disbursements.
The agreement further provided that all moneys paid under the contract be retained by Melvin B. Raskin, broker, in his customer's trust account in a bank in Milwaukee county until the termination of the agreement. That is the only time that the name of a broker appears in the agreement. The note for $15,000 is to be payable to "the broker," and the amount is deducted from the purchase price. The only other reference to a commission is that in case the buyer fails to carry out the agreement, moneys paid thereunder be forfeited and paid to the seller as liquidated damages subject to deductions of broker's commission and disbursements. These provisions indicate that the commission is to be paid by the seller and not by the buyer. We find nothing therein that contains an agreement by the defendants, or either of them, to pay the plaintiff a commission as required by sec. 240.10, Stats.
In order to carry out the legislative intent, courts hold void contracts which do not substantially comply with the same. Hale v. Kreisel (1927), 194 Wis. 271, 215 N.W. 227; Otto v. Black Eagle Oil Co. (1954), 266 Wis. 215, 63 N.W.2d 47. The complaint does not show a written contract that substantially complies with the provisions of the statute and the demurrer should have been sustained.
By the Court. — Order reversed. Cause remanded with directions to enter an order sustaining the demurrer of the defendants.
GORDON, J., took no part.