Angell v. Van Schaick

Macomber, J.

The plaintiff, who describes himself in the complaint as a real-estate broker having his office at Bradford, Pa., brings this action to recover of the defendants, who are residents of this state, the sum of $500 as the agreed price for his services in procuring for them a person who was willing and able to, and who in fact actually did, enter into a contract for the purchase of lands of the defendants, in the year 1886, in McKean county, in the state of Pennsylvania, for the sum of $30,000. The second defense, which is demurred to on the ground that it is insufficient in law to constitute a defense to the cause of action set forth in the complaint, alleges the existence at the time of making of the contract of certain statutes in the state of Pennsylvania whereby it was made incumbent upon all real-estate brokers to pay into the treasury of the county the sum of $30 as a license fee for doing the business of real-estate brokerage. In default of procuring a license, a penalty of $500 was imposed upon any person who should engage therein, to be recovered by an action at law, as debts are,—one-half going to the people, and the other half to the guardians of the poor.

The learned counsel for the respondents asserts that these statutes made the failure to take out a license for this business an offense. If it is meant thereby to state that such violation was punishable as a crime, the statement is erroneous. A penalty of $500, to be recovered in an action at law, as debts are, is prescribed for each offense, it is true; but the term “ each offense, ” in that connection, does not mean a crime, but only an omission or failure of duty year by year.

It is also contended by the respondents’ counsel that by the law of Pennsylvania the plaintiff would be unable to recover in that state his commissions, or any compensation, for such services, under the statutes above mentioned. There is not, however, in the answer, any averment that there is a law of Pennsylvania which would lead to this result. It is stated in this defense that the highest court of that state has decided, “in a proper case,” before it, that a person cannot recover commissions as a real-estate broker who has not taken out a license. This is not by any means an assertion that by the law of Pennsylvania such a recovery cannot be had. The decision of the highest court of that state would indeed be a means, but only one of many means, of ascertaining the law of that commonwealth, and, standing alone, could not be deemed to be the law governing all cases which might arise where a recovery of commissions is sought, in the absence, as in this case, of averments of the particular circumstances attending the case where such decision was given. The construction put upon the statutes of another state by its courts are, ordinarily, controlling. Jessup v. Carnegie, 80 N. Y. 441. Faulkner v. Hart, 82 N. Y. 413; Leonard v. Navigation Co., 84 N. Y. 48. But the defense here set up fails to allege that in all cases where there was no license there could be no recovery. The leading case in the courts of Pennsylvania, which is not before us as evidence, but only as an authority, is Holt v. Green, 73 Pa. St. 198. This was followed by the case of Johnson v. Hulings, 103 Pa. St. 498. The learned judge writing the opinion of the court in the last-named case, and who deems that court bound by the decision of Holt v. Green, supra, characterizes the omission of the broker to take out a license as immoral. This characterization would not be warranted if the case before the court had been one only of an unintentional or accidental omission to pay the license fee. The report of the decision does not satisfactorily show that the act of the party was willful, but the remark of the learned judge leads quite directly to the inference that the omission of the party was for the purpose of evading and defeating the law. In order to understand the full meaning of this remark, and to allow it all the force which it is justly entitled to, it is necessary to see what the case was in which it was made; but the facts constituting that case are not before us. This observation of the judge in giving judgment may have been perfectly correct in reference to the case then before the court, and yet be clearly wrong when attempted to be applied to a case of a different character, where, obviously, there is no moral turpitude. If anything further than this be claimed for the decision of the supreme court of Pennsylvania upon this subject, we are precluded from adopting it on this appeal, and from administering the rule in accordance with the lex loci contractus, on account of the insufficiency of the pleading demurred to. Yet the learned judge at special term, in his opinion, has fallen into the error of supposing that in the allegation that there had been one decision, in a case brought by a real-estate broker who had not taken out a license, made by the highest court of the state of Pennsylvania, would establish a common-law rule of that state; for he says “that it is the law of that state, and was at the time of rendering these services, and was so declared by the highest judicial tribunal of that state, that a person cannot recover for services rendered in that state as a real-estate broker unless he had at the time such a license.” I do not find in the answer any other averment of the existence of a common law growing out of, so to speak, the interpretation of these statutes, other than the allegation that the highest court of ultimate and appellate jurisdiction of Pennsylvania, “ in a proper case" brought before it for review, has decided, and still holds, that a real-estate broker not having such commission, or net having paid the license fee, can recover no compensation for his services. Whether the facts before the supreme court of Pennsylvania were similar to those appearing in these pleadings is not set up by the answer. If it appeared that the real-estate broker, in the case cited, failed to take out the license or pay the fee with the intent to evade the laws of Pennsylvania, (which may be the meaning of the pleader’s expression, “a proper case”) a sufficient case would be made out for the defeat of a claim in that forum as well as in our own. There is not in this case any averment in the answer that the omission of the plaintiff to take out a license was done with intent to-evade and violate the laws of Pennsylvania. In the absence of such averment, this answer is insufficient as a defense.

This brings me to the principal defect and omission contained in this answer, and that is the failure on the part of the pleader to show that the contract set forth in the complaint is a criminal offense, or that it is null and void, or is prohibited by the statute of that state. So far as is disclosed by this pleading, the purpose of the statutes mentioned is to secure certain revenues to the state, and the only penalty imposed for the failure to pay for licenses to conduct such business is liability to a civil suit, and damages as for a debt fixed by the statute. In Thalimer v. Brinkerhoff, 20 Johns. 397, the general rule is laid down that all contracts which have for their object anything repugnant to the general policy of the law, or contrary to the provisions of the statute, are void. Ex turpi contractu non oritur actio. But a mere repugnancy to the statute designed, apparently, alone to raise revenue in another state, is not sufficient to prevent a recovery for such compensation in this state under a contract made in a foreign jurisdiction. We have not been cited to any decision, either by counsel, or by the' learned judge at special term in his opinion, by which a contract valid in this jurisdiction should be declared by our own courts invalid by reason of the laws of another state, where the contract was made, unless it appeared either that the entering into of the contract was a crime, or that the same was prohibited altogether, or was declared null and void, by the foreign statute. Section 6 of the act passed by the legislature of Pennsylvania May 27, 1841, set forth in the complaint, the provisions of which were subsequently extended to real-estate brokers, is not a prohibition, with a punishment to be inflicted by the criminal courts for its violation. On the contrary, it creates a debt to be recovered in an action at law against the person failing to pay the license fee. The failure so-to take out a license is not shown to be either "a felony or a misdemeanor, or in any way punishable. So long as the broker pays $30 per year for his license, or $500 per year without it, he can continue his vocation.

After setting forth the foreign statutes, and averring that they were the whole of the laws and statutes of Pennsylvania relating to the subject,'the pleader alleges that by such statutes the plaintiff was absolutely prohibited from exercising his trade without a license, and that he was prohibited by such statutes from recovering in this action. But these averments are mere inferences and deductions drawn from the statutes, and are not in any sense allegations of fact. In interposing the demurrer the plaintiff did not thereby admit the construction put upon the statutes by the pleading demurred to, or the correctness of inferences, but only the truth of such facts as were properly stated in the answer. Bogardus v. Insurance Co., 101 N. Y. 337, 4 N. E. Rep. 522; Bonnell v. Griswold, 68 N. Y. 294; Institute v. Bitter, 87 N. Y. 250. As a question of pleading, therefore, it appears that the answer is insufficient in law, to prevent a recovery by the plaintiff. The defendant should be required to stand upon the first defense, namely, a general denial of the allegations of the complaint. The judgment appealed from should be reversed, and the demurrer sustained, with costs.

Dwight, P. J., concurs.