Sec. 10a. Public Officials (P. 24)

A deputy tax commissioner holds a quasi-judicial office and it is against public policy to enforce an alleged contract to pay him commissions as a broker for procuring a purchaser for lands, where the contract was the result of the plaintiff's activities ex colore officii.

*Page numbers following section headings refer to the body of the original book. 1 Moorehead v. Realty Associates, 166 App. Div. 782; 152 N. V. Suppl. 342 (1915); affd., 220 N. Y. - (1917), no opinion.

Sec. 10b. Attorney Acting As Broker (P. 24)

An attorney employed solely to procure a loan for a client acts merely as agent and communications between them in regard to the loan are not privileged. This is so, although the attorney had represented the client professionally in other transactions.2

Where an attorney at law procures a mortgage loan, he does not act in his capacity as an attorney at law, but like any other agent, and therefore the necessity of alleging and proving that he is a regularly licensed attorney at law does not exist.

Sec. 11. License Or Tax On Right To Act As Broker (P. 24)

Power and authority exist in the legislature to license and regulate certain vocations, but such power and authority are dependent upon a reasonable necessity for their exercise to protect the health. morals, or general_wglfare of the state.3 lt would be impracticable to present the various statutory or local enactments upon the subject of licenses to do business as a real estate broker. In order, however, to convey a general idea as to how these requirements are ordinarily regulated by local ordinances, Chapter 15 of the Chicago Code of City Ordinances (1911) relating to licenses of real estate brokers is given below:


192. License - Application - Fee. It shall be unlawful for any person or corporation to engage in the business or act in the capacity of a broker within the city, without first obtaining a license therefor. Application for such license shall be made in writing to the Mayor, and upon payment to the City Collector of the sum of $25, a license shall be issued to the applicant by the City Clerk. Such application shall state the name of the person or corporation and the location of the place or places of business for which such license is desired.

193. Change of Location. If, after the issuance and delivery of a license under the provisions of this chapter, any change shall be made in the place or places of business covered thereby, no business shall be carried on in such new location until a notice shall have been given, in writing, to the City Collector.

2 Lifschitz v. O'Brien, 143 App. Div. 180; 127 N. Y. Suppl. 1091; 2 Civ. Pro. Rep. (N. S.) 236 (1911).

3People v. Ringe, 197 N. Y. 143; 90 N. E. 451 (1910).

194. Broker Defined. A broker is one who is engaged for others in negotiating contracts relative to property with the custody of which he has no concern.

195. Real Estate Broker Defined. A real estate broker is one who is engaged for others in negotiating contracts relative to real estate.

196. Insurance Broker Defined. An insurance broker shall include any and every person or corporation engaged, for others, in negotiating contracts for insurance on lives, buildings, vessels or other property, either directly or through any other broker or through any insurance agent, or with any insurance company other than an insurance company of which such person shall be an employee.

197. Employees Acting as Brokers. Any person employed by a person or corporation licensed as a broker under the provisions of this chapter, who shall himself engage in the business or act in the capacity of a broker, shall, notwithstanding the fact of such employment be amenable to all the provisions of this chapter and shall be required to take out a broker's license.

198. Penalty. Any person or corporation violating any of the provisions of this chapter shall be fined not less than twenty-five dollars nor more than two hundred dollars for each offense.

It has been said that, "it is the law that if a statute or ordinance declares it to be unlawful for a person to act as a broker without a license and prescribes a penalty for its violation, an unlicensed broker cannot recover upon the contract for commissions, even though the statute or ordinance does not, in terms, declare the contract void."4

Yet the same court has held that where an action is brought on a promise to pay for services rendered for negotiating a real estate transaction, the fact that plaintiff is not a licensed broker is no defense.5

And so, it has been said that, "under a Statute passed for the purpose of raising revenue, which provides that every person or firm engaged in the business of buying or selling real estate on commission shall pay the sum of $10 for each county in which he or they may conduct such business, and that, before such persons shall be authorized to open up or carry on such business, they shall go before the ordinary of the county in which they propose to do business and register their names and the business they propose to engage in, the place where it is to be conducted, and shall then pay their tax to the collector, and that any person failing to comply with the foregoing requirements shall be guilty of a misdemeanor, but which does not provide that the business conducted by such person failing to comply with the statute shall be void and unenforceable, it is not a defense to a suit brought by such person selling or buying real estate on commission, to recover commissions on sales of real estate made by him, that he had failed to pay the tax and register as required by statute."6

4 Friedland v. Isenstein, 191 III. App. 109 (1915); Fucrst v. Stone. 192 111. App. 256 (1915).

5 Gibons v. Williams, 191 111. App. 594 (1915).

An act in violation of a statute or municipal ordinance forbidding it, may, as a general rule, be said to be void, but when the statute or ordinance is for the purpose of raising revenue, and does not make the act itself void, and the act is not malum in se nor detrimental to good morals, many courts have made exceptions and will not hold such act absolutely void. This rule is generally applied to statutes and ordinances regulating or licensing the business of real estate brokers.7

Where such statute or ordinance does not provide that a failure to pay the tax, or to procure the license, or to register, renders any agreement of the broker void, the penalty for a violation of the statute or ordinance may be said to be against the person of the agent, and not against his act. The law may provide for punishment as a misdemeanor, but that would not render the broker's agreement unenforceable unless the statute or ordinance expressly, or by necessary implication, makes them unenforceable.8

The legality of a broker's agreement is not affected by his failure to comply with a requirement in which, as a revenue measure, only the state is concerned.9

An ordinance making it unlawful for one to engage in the business, or act in the capacity, of a broker, within the city, without first obtaining a license, applies only to persons engaged in the business of brokerage as an occupation or vocation and not to a person negotiating a single sale.10

6Syllabus by the court in Toole v. Wiregrass Dev. Co., 142 Ga. - ; 82 S. E. 514 (1914).

7 See Hughes v. Suell, 28 Okl. 828; 115 Pac. 1105; 34 L. R. A. (N. S.) 1133; Ann. Cas. 1912 D, 374; Vermont Loan Co. v. Hoffman, 5 Idaho 376; 49 Pac. 314; 37 L. R. A. 509; 95 Am. St. Rep. 186; Coates v. Locust Point Co., 102 Md. 291; 62 Atl. 625; 5 Ann. Cas. 895; Watkins Land Mortgage Co. v. Thetford, 43 Tex. Civ. 536; 96 S. W. 72.

8 Toole v. Wiregrass Dev. Co., supra.

9 Swift v. Mocre, (Ga. App.) 82 S. E. 914 (1914).

Legislation requiring a license does not prevent a person whose business and occupation was not that of a real estate broker from receiving compensation for services rendered in buying and selling real estate belonging to another.11

A city ordinance requiring a license to be taken out by an employee of a broker where he shall himself engage in the business, or act in the capacity of a broker, is held not to apply to mere employees of brokers, though they are paid for their work a certain portion or per cent of the commissions.12 Where a broker's license is issued to a partnership, and one the partners succeeds to the business of the partnership upon dissolution of the firm and continues business individually at the same location, he is to be considered a licensed broker.13

Where a contract for the payment of a commission for the exchange of real estate is made in another state (Michigan), a city ordinance making it unlawful for a person to act in the capacity of a broker in a city within the state (Illinois) has no application, such as to render the contract invalid.14