Morgan v. Whatley & Whatley
Morgan v. Whatley & Whatley
Opinion of the Court
In the authority last- cited it is said:
“The requirement that, in order to charge with liability under special circumstances, the party sought to bo charged shall have had notice of such circumstances, shtould receive reasonable interpretation with reference to the subject to which such notice is applied. As a general rule, knowledge of the special circumstances must be brought clearly home to him at the time the contract is made, in such a way that he must know that the person with whom he is contracting reasonably believes that he accepts the contract with the special condition. It is not required that he must have exact knowledge or information in detail as.to just what loss will result; nor is it always essential that such special conditions be mentioned in the negotiations or included in the contract in express terms. It is sufficient if they are known to the parties or are of such character that they may be fairly supposed to have been in contemplation in the making of the contract.” 8 R. C. L. 461, § 28.
Although the evidence was in dispute, and the burden was on plaintiffs to show notice to defendant of the special circumstances under which they -undertook to make the exchange of properties, the decided weight of the evidence shows such notice and understanding; and in a number of cases, substantially identical with the instant case, it has been held that loss of commissions to be paid by the other party, by reason of the principal’s default in carrying out his agreement to sell or exchange, became a recoverable element of damage in a suit by the broker against his defaulting principal.
The case of Eells Bros. v. Parsons, 132 Iowa, 543, 109 N. W. 1098, 11 Ann. Cas. 475, is well considered, and, we think, decisive of the question. The court there said:
“The action is for breach of defendant’s contract, and not for the commissions from the landowner. To the latter, plaintiff was not entitled, for the reason that, through defendant’s fault, as it alleged, it had not earned them. * * * If plaintiff were attempting to recover a commission for the sale of the land he should be defeated, for defendant never promised him this. What he (defendant) did agree to do was to purchase the land which suited him, thus enabling plaintiff to earn its commission. The parties understood when they made the contract what plaintiff’s damages would be in the event defendant failed to perform it. In other ■words, loss of plaintiff’s commission was within the contemplation of the parties in the event of defendant’s failure to perform. * * * Plaintiff is suing for breach of a contract made between it and defendant, and not upon the commission contract made with the land company. It has, as we have already said, not earned these commissions, and was prevented from doing so by defendant’s failure, without excuse, to keep and perform his engagement with plaintiff. There are several cases from other jurisdictions which sustain plaintiff’s right to recover. See Livermore v. Crane, 26 Wash. 529, 67 Pac. 221, 57 L. R. A. 401; Bishops v. Averill, 17 Wash. 209, 49 Pac. 237, 50 Pac. 1024; Cavender v. Woddingham, 2 Mo. App. 551; Atkinson v. Pack, 114 N. C. 597, 19 S. E. 628.”
It is to be noted that, in the instant case, defendant’s promise to plaintiffs was to convey his property to Berentz, if plaintiffs would induce Berentz to convey his property to defendant. This is the promise for tho breach of which this action is brought.
We find no error in the rulings on the evidence which could have been prejudicial to defendant.
[8, S] It is insisted that the defense that plaintiffs were not lawfully licensed to carry on the business of real estate brokerage was a good defense in law, and should have defeated a recovery in the conceded absence of any showing by plaintiffs that they were in fact licensed.
The rule is fully settled that the doing of business without the required license, though subject to criminal penalty, does not invalidate acts done or obligations contracted therein. Sunflower Lbr. Co. v. Turner Sup. Co., 158 Ala. 191, 48 South. 510, 132 Am. St. Rep. 20; Smith v. Sharpe, 162 Ala. 433, 50 South. 381; Alford v. Creagh, 7 Ala. App. 358, 62 South. 254. The Revenue Act of 1915 (Acts 1915, p. 490) provides that—
“Every person * * * engaged in any business * * * for which a license or privilege tax is required shall first procure a license,” etc.
And section 3 (p. 527) provides:
“Befor? any person, firm or corporation shall engage in or carry on any business or do any act for which a license by law is required, he, they or it shall pay to the judge of probate * * * the amount required for such license,” etc.
While the authorities in. general are not harmonious in their application of the general .principle, the basis of decision seems to be that if the requisition of a license is for revenue only, and not for police protection, the penalty for operating or acting without a license is visited upon the person and not upon the business,. and contracts made in carrying on the business are not held void unless the statute expressly prohibits or vitiates them. Sunflower Lbr. Co. v. Turner Sup. Co., 158 Ala. 191, 48 South. 510, 132 Am. St. Rep. 20, citing 25 Cyc. 633, and reviewing many cases.
A majority of the court, consisting of ANDERSON, o. j., McClellan, sayre, GARDNER, and THOMAS, JJ., are of the opinion that there is nothing in the language of the present law which, by reasonable construction, prohibits the doing of business or any act of business, in the sense of avoiding contractual validity, in default of a license paid for and procured according to law; and that the plaintiffs’ contract here sued on was not invalid by reason of his operating without’ a license. In- consequence, the action of the trial court in disregarding the plea so alleging is held as free from error.
No prejudicial error appearing, the judgment will be affirmed.
Affirmed.
Dissenting Opinion
(dissenting). In Sunflower Lbr. Co. v. Turner Sup. Co., 158 Ala. 191, 48 South. 510, 132 Am. St. Rep. 20, holding that contracts made in the course of conducting a business, without the license required by law, were valid and enforceable, the court was dealing with a statute (Code, § 2361) which provided merely that “licenses are required of all persons engaged in or carrying on any business,” etc., and the correctness of the conclusion is unquestionable.
The language of our Revenue Act of 1915, which is repeated in the act of 1919 (Gen. Acts 1919, p. 395), expressly prohibits the carrying on of the specified businesses — including that of real estate brokers — without' first procuring a license therefor; and I cannot escape the conviction that such a prohibition carries with it a legislative outlawry of executory contracts which are sought to he enforced by any offender of the law. The' change in the language of the present law is significant, and ought to he given appropriate restrictive effect in accordance with its obvious purpose.
According to the weight of authority, the burden of proof on such an issue in civil cases,’ where the holding of a license is only collaterally involved, is upon the defendant. Abhau v. Grassie, 262 Ill. 636, 104 N. E. 1020, Ann. Cas. 1915B, 414, and note, 416. But in this state it has been authoritatively settled that the burden of proof is upon the party who is required to have the license, the rule being founded upon considerations of policy and convenience. Edisto Phosphate Co. v. Standford, 112 Ala. 493, 20 South. 613; Brown v. Raisin Fertilizer Co., 124 Ala. 221, 26 South. 891. And the same rule is established in prosecutions for viola *174 tions of the license statutes. Porter v. State, 58 Ala. 66. See, also, Mays v. Williams, 27 Ala. 267.
The plaintiffs failed' to discharge this burden of proof, and there is no evidence in the record which tends to show, directly or inferentially, that they were licensed brokers.
It would result, in accordance with the authorities, that plaintiffs were not entitled to recover on the contract sued on. Brown v. Raisin Fertilizer Co., 124 Ala. 221, 26 South. 891; Talladega F. & M. Co. v. Farmers’ Union Warehouse Co., 2 Ala. App. 307, 56 South. 595.
Reference
- Full Case Name
- MORGAN v. WHATLEY & WHATLEY Et Al.
- Cited By
- 27 cases
- Status
- Published