Opinion
March 9, 1956 —
April 3, 1956.
APPEAL from a judgment of the circuit court for Outagamie county: ANDREW W. PARNELL, Circuit Judge. Reversed.
For the appellant there was a brief and oral argument by Joseph Witmer of Appleton.
For the respondents there was a brief by Benton, Bosser, Fulton, Menn Nehs of Appleton, and oral argument by Franklin L. Nehs.
This action was commenced May 12, 1954, by Eugene N. Garvey and Richard J. Garvey, copartners doing business as Garvey Agencies, against Roman M. Wenzel, to recover a broker's fee.
The material facts are undisputed. Prior to May 11, 1953, plaintiffs were duly licensed real-estate brokers and salesmen, doing business under the partnership name of Garvey Agencies. On May 11, 1953, plaintiffs approached defendant, Roman M. Wenzel, president and manager of R. Wenzel Company, with a sale and lease-back proposition. In discussing commissions, the plaintiffs said they would charge one per cent of the total rental value expected to be realized from the proposed lease, or $2,920. Defendant agreed that this would be fair. No contract between the parties for such commission was made in writing pursuant to sec. 240.10, Stats. After the parties interested in the proposition had been brought together and while negotiations were being carried on, plaintiffs pressed for payment of their commission and suggested that they be given "some evidence in writing, of the obligation." Defendant assented to do this. On June 8, 1953, plaintiff Eugene N. Garvey went to the Wenzel Company office with a statement reading:
"June 8, 1953, to Roman M. Wenzel for the finders' fee of one per cent on the Service Motor Transport Company lease . . . services $2,920. Acknowledgment by Roman M. Wenzel /s/ Roman M. Wenzel."
This writing was signed by defendant at a time when negotiations were pending concerning a counteroffer. On July 3, 1953, the seller, Service Motor Transport Company, by its attorney, wrote defendant a letter saying that it had decided to drop the entire matter. The deal was never consummated. This action was brought May 12, 1954, by the plaintiff brokers to recover broker's commission for valuable services rendered.
The case was tried to court and jury. In the special verdict the jury determined that the defendant, prior to June 5, 1953, engaged the plaintiffs to represent him in negotiations with the Service Motor Transport Company; that the said plaintiffs performed the services for which they were engaged; and that the defendant agreed to pay plaintiffs a fee of $2,920 for such services. On motions after verdict the trial court ruled that though there was no original agreement in writing to pay a commission, still, on June 8, 1953, defendant gave the following acknowledgment:
Italicized portion indicates matter struck in original documents.
the R. Wenzel Company fn_
"Acknowledgment by "ok ENG "Roman M. Wenzel "ok RMW "/s/ ROMAN M. WENZEL" The court granted plaintiffs judgment. Defendant appeals.In entering into the alleged contract, the respondents ignored the requirements laid down by the legislature in sec. 240.10, Stats. The action is one to recover a real-estate broker's commission for services rendered in negotiating a lease. There was no written agreement between the parties providing for payment of such commission pursuant to sec. 240.10, which provides:
"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 or 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."
Respondents do not sue on the original contract, which is within such statute of frauds and therefore void. The suit is based wholly on a verbal promise to pay made subsequent to the performance of the services rendered, and upon the written acknowledgment set forth in the above statement of facts.
Sec. 240.10, Stats., was enacted to curb the tendency of real-estate brokers to impose upon their clients and to prevent frauds and injuries of which such transactions seemed to afford a prolific source. The objectives sought to be accomplished by the provisions of sec. 240.10 would be entirely vitiated if a verbal promise made after performance of services were sufficient to take the contract out from under the provisions of the statute.
The respondents rely on the case of Elbinger v. Capitol Teutonia Co. 208 Wis. 163, 242 N.W. 568. However, that case involved a promissory note (not present in the instant case), and it was held that the past services of the plaintiff broker were sufficient consideration for the note, and that the note stood in the same category as payment for such services in cash. The defendant there delivered his written promissory note, and there arose a new and independent contract, enforceable because supported by a good consideration, i. e., the actual pecuniary benefit received by the promisor pursuant to the void commission contract, accepted and retained by the promisor.
In the instant case, by reason of the failure upon the part of the brokers to protect themselves by a written agreement pursuant to sec. 240.10, Stats., they left themselves without any legal right to exact payment for their services; and they are therefore without any remedy against appellant. There was no new and independent contract because there was no written promise to pay. Even if the writing had contained a promise to pay, it would be insufficient to constitute a binding contract unless (1) it incorporated all the terms required to be included by sec. 240.10; or (2) unless the writing could be construed as a promissory note. The lack of a valid contract between the parties leaves the plaintiffs without a cause of action. Further discussion is unnecessary. By the Court. — Judgment reversed, and cause remanded with directions to vacate the judgment and dismiss the complaint.
MARTIN, BROWN, and STEINLE, JJ., dissent.