Opinion
Decided April 11, 1929.
Brokers — Oral agreement with another agent for percentage of realty commissions, unenforceable — Section 8621, General Code — Statute not limited to contracts with real estate owners — Statute available by demurrer, answer or motion to direct verdict, when — Courts to enforce plain and unambiguous statutes.
1. In an action on a contract which Section 8621, General Code, requires to be evidenced by a writing, in which action it affirmatively appears from the petition that such contract is not in writing, the defense of the statute is available by demurrer or answer; and, where the answer is a general denial, such defense is not waived by not pleading or interposing the same until evidence is offered to prove an oral contract.
2. Section 8621, General Code, which provides that an action cannot be maintained upon a "contract to pay any commission for or upon the sale of an interest in real estate," unless the same is evidenced by a writing, is not limited to contracts with owners of real estate, but applies to contracts between persons other than owners of the real estate sold.
3. It is the duty of the courts to enforce a statute which they find to be plain and unambiguous, if otherwise valid.
ERROR: Court of Appeals for Lorain county.
Mr. John K. Nece, for plaintiff in error.
Mr. Robert L. Walden, for defendant in error.
This matter is before the court on a petition in error, and the parties bear the same relation to one another in this court as they did in the common pleas court.
Plaintiff, E.L. Miller, brought suit against the defendant, T.S. Auble, alleging in his petition that there was due him a certain amount "for labor performed under a certain oral contract whereby on or about the fifteenth day of April, 1926, defendant employed plaintiff to secure prospects and assist in sales of real estate, defendant agreeing to pay plaintiff a sum equal to one-tenth of his commissions, said commission being 5 per cent of the purchase price, for said labor, on any and all sales made or properties listed that were later sold by defendant."
Plaintiff further alleged that in pursuance of said oral contract he listed property and assisted in sales, and that "as a result of said labors plaintiff did assist in the sale" of three specific properties, the total sale price of which was $21,500, and that there was due him under his said contract the sum of $107.50, for which he prayed judgment.
The defendant filed a general denial, and when the case came on for trial, and after a jury had been duly impaneled and sworn, defendant moved the court to direct a verdict in his favor on the ground that the petition did not state facts sufficient to constitute a cause of action, and said motion was granted, and a verdict was directed in favor of defendant, to which plaintiff excepted; thereafter a motion for a new trial was filed and overruled, to which plaintiff excepted, and judgment was entered upon the verdict.
The claim of the defendant was that, as the petition expressly stated that the contract was not in writing, plaintiff was precluded from recovery thereon by virtue of the provisions of Section 8621, General Code, which provides that no action shall be brought whereby to charge the defendant "upon an agreement, promise or contract to pay any commission for or upon the sale of an interest in real estate, * * * unless the agreement upon which such action is brought, or some memorandum or note thereof, is in writing, and signed by the party to be charged therewith, or some other person thereunto by him or her lawfully authorized."
The claim of the plaintiff in this court is that the statute of frauds is not available as a defense in this case, because it was not pleaded; and, second, that the petition clearly shows the contract upon which the action is founded was not an agreement that comes within the statute of frauds.
A statute may merely require that a certain class of contracts shall be evidenced by writing, or the statute may go further and specifically require that a petition to recover on such contract shall set forth the fact that it was in writing. If the statute specifically requires the party to set forth in his pleading that the contract was in writing, then, of course, a pleading which fails to state that the contract was in writing does not state a good cause of action, and demurrer will lie; but if the statute merely requires the contract to be in writing, and it is such a contract as is valid at common law without a writing, then it is not necessary, in order to state a good cause of action, to allege that the contract was in writing, though it can be proven only by a writing.
If it is not alleged in the petition that the contract was, or was not, in writing, and a general denial is filed, the plaintiff, upon trial, is required to sustain the issue by competent evidence, and the statute is available to the defendant by objection at the trial to oral evidence to prove the contract. Birchell v. Neaster, 36 Ohio St. 331.
In other words, where the statute requires the contract sued upon to be in writing, but does not specifically require it to be so pleaded, and the petition is silent as to whether or not it is in writing, and there is a general denial, the defendant may avail himself of the statute, without having pleaded it, by objecting to proof of an oral contract.
If the petition sets forth that the agreement is not in writing, the defense of the statute of frauds may be made available by demurrer, Howard v. Brower, 37 Ohio St. 402, and, where a general denial is filed, such defense is not waived by not interposing the same until evidence is offered to prove the oral contract. By then objecting to the introduction of the evidence, the defendant raises the same question as would be raised by a demurrer before trial.
In this case the petition expressly alleges that the contract sued upon was not in writing, and of course it was unnecessary for the defendant to plead the statute; and, having filed a general denial, he did not waive the defense of the statute by not interposing the same before the trial of the case. The question whether the contract upon which the action is founded is an agreement which the statute of frauds requires to be in writing was disposed of by the trial court upon the petition alone, there being nothing in the opening statement of counsel except the reading of the petition, and we are confined to the allegations of the petition in determining whether or not the trial court was in error in finding that the contract was within the statute of frauds.
The petition does not allege facts constituting a partnership, and therefore the case of Furth v. Farkasch, 26 Ohio App. 258, 159 N.E. 142, is not applicable.
The transaction described in the petition in the case at bar is more like the one passed upon in Cohen v. Spitz Co., ante, 63, 166 N.E. 382. It is true that in that case the contract was in reference to a specific piece of property, while in the case at bar no specific property is referred to in the agreement; that difference we do not regard as of controlling importance. In the case at bar the contract is limited to property which plaintiff listed, or otherwise assisted in selling, and the recovery sought is only as to such property.
The contract which is required by the statute to be evidenced by a writing is a contract to "pay any commission." The term "commission" imports an allowance as compensation for services rendered by a broker or agent in making a sale. The plaintiff alleges that he was employed to and did assist in making certain sales, and he seeks to recover the price agreed to be paid therefor; the services so performed were such as are usually performed by a real estate broker, and plaintiff's action is plainly one to recover a commission.
Plaintiff's action is not one to recover for services in furnishing prospective purchasers, as was the case in McHugh v. Marshall, 30 Ohio App. 225, 164 N.E. 778, where there was no claim made that the plaintiff was employed to, or that she did, assist in making sales of real estate.
In the case at bar the petition sets forth that plaintiff was employed to render services in making sales of real estate, either by listing properties, or securing prospective purchasers, or otherwise assisting in sales, and plaintiff's compensation is limited to and based upon sales in which he rendered such service. It is therefore apparent that he was to be paid a commission upon sales of real estate which he assisted in making, and that the contract was within the terms of the statute to pay a "commission for or upon the sale of an interest in real estate," unless said statute should be construed as applying only to contracts between an owner of real estate and a broker or agent, who agrees to render services for such owner in the sale of his real estate.
It may be, in view of the well-known evils connected with such transactions, that it was the intention of the Legislature to limit the operation of the law to such contracts; but, if so, the Legislature could easily have employed language to express such intention, as was done by the Legislature of the state of Nebraska, and by the Legislatures of several other states. The Legislature of Ohio failed to so limit the operation of the statute, and it would be judicial legislation for us to do so.
Where a statute is plain and unambiguous in its terms, it is the duty of courts to enforce rather than construe the same.
In respect to this matter, the statute of the state of Michigan is the same as our Section 8621, General Code, and the Supreme Court of Michigan has determined that said statute is not limited in its operation to contracts between an owner and a broker, but applies to a transaction very similar to the one involve in the case at bar. Smith v. Starke, 196 Mich. 311, 162 N.W. 998.
Judgment affirmed.
FUNK, P.J., and PARDEE, J., concur.