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White v. Chicago Title & Trust Co.

OPINION FILED AUGUST 10, 1981.

GEORGE H. WHITE, PLAINTIFF-APPELLANT,

v.

CHICAGO TITLE AND TRUST COMPANY, TRUSTEE, ET AL., DEFENDANTS-APPELLEES.



APPEAL from the Circuit Court of Cook County; the Hon. FRANK ORLANDO, Judge, presiding.

MR. JUSTICE O'CONNOR DELIVERED THE OPINION OF THE COURT:

This is an appeal by a real estate broker from a judgment denying him a commission. Briefly stated, the pertinent facts as disclosed by the amended complaint and answers to interrogatories are:

In October 1974, plaintiff George H. White was a real estate broker and Fred W. Owens was a real estate salesman. At that time, Owens' certificate of registration as a salesman was in the possession of another broker by whom he was then employed. In October 1974, defendant Chicago Title and Trust Company, as trustee, held legal title to certain real estate in Des Plaines, Illinois. Defendants Paul Heuses, Robert W. Geinecke, Paul Marquette, Lee Polly and Leo F. McLennon were the beneficiaries of that trust. On October 25, 1974, Chicago Title and Trust Company granted Owens, acting as an agent of plaintiff, an option to purchase the real estate. The option agreement, among other things, provided that if the option were exercised, the optioner would pay Owens a brokerage commission of 6 percent of the sales price. Owens' certificate of registration as a salesman was transferred to plaintiff White on December 1, 1974. On April 21, 1975, the option was properly extended. On November 22, 1975, Owens sold his option rights to defendants John Koziol and Robert Wedgewood, who subsequently transferred those rights to defendant Grove Towers, Inc., of which they were president and secretary respectively. The sale of the option agreement to Koziol and Wedgewood yielded Owens a profit of $40,000. On January 3, 1977, Grove Towers, Inc., acquired the real estate by purchase. The purchase contract provided that Grove was responsible for Owens' commission. Demands by White and Owens for the real estate commission were denied by defendants and suit was filed by White on November 21, 1978.

On September 26, 1979, plaintiff in answer to interrogatories disclosed that Owens did not register to sell real estate as White's employee until December 1, 1974. Defendants moved for summary judgment, which was granted on the ground that the Real Estate Brokers and Salesmen License Act (Ill. Rev. Stat. 1979, ch. 111, par. 5701 et seq.) barred his action because Owens was not registered as a salesman of plaintiff White at the time the option agreement was executed. *fn1

The purpose of the Real Estate Brokers and Salesmen License Act has been stated in Ranquist v. Stackler (1977), 55 Ill. App.3d 545, 551, 370 N.E.2d 1198, as "the prevention of injury to the public by assuring that the occupation will be practiced with honesty and integrity, excluding from the profession those who are incompetent or unworthy." In addition, it has been held that the Act is not a penal measure, to be strictly construed against the State, but a broad statutory system which is remedial and therefore should be liberally construed. Strickland v. Department of Registration & Education (1978), 60 Ill. App.3d 1, 376 N.E.2d 255.

Section 1 of the Act (Ill. Rev. Stat. 1979, ch. 111, par. 5701) states that "[t]he intent of the legislature in enacting this statute is to evaluate the competency of persons engaged in the real estate business for the protection of the public."

Section 3 provides:

"It is unlawful for any person to act as a real estate broker or real estate salesman, or to advertise or assume to act as such real estate broker or real estate salesman, without a certificate of registration issued by the Department of Registration and Education. No association, partnership or corporation shall be granted a certificate of registration, or engage in the business or capacity, either directly or indirectly, of a real estate broker, unless every member of such association, or every partner in such partnership or every officer of such corporation who actively participates in the brokerage business of such association, partnership or corporation holds a certificate of registration as a real estate broker, and unless every employee who acts as a salesman for such association, partnership or corporation holds a certificate of registration as a real estate salesman." Ill. Rev. Stat. 1979, ch. 111, par. 5703.

Section 5 provides that "[t]he commission of a single act prohibited by this Act constitutes a violation of this Act." Ill. Rev. Stat. 1979, ch. 111, par. 5712.

Section 7 explicitly states:

"No action or suit shall be instituted, nor recovery therein be had, in any court of this State by any person, copartnership, association or corporation for compensation for any act done or service rendered, the doing or rendering of which is prohibited under the provisions of this Act to other than registered real estate brokers or real estate salesmen unless such person, copartnership, association, or corporation was duly registered hereunder as a real estate broker or real estate salesman prior to the time of offering to perform any such act or service or procuring any promise or contract for the payment of compensation for any such contemplated act or service." Ill. Rev. Stat. 1979, ch. 111, par. 5714.

Section 10 requires a written examination by each applicant for a certificate of registration as a broker or salesman to determine the trustworthiness and competency of the applicant. It further provides:

"(c) No applicant shall engage in the real estate business as a broker or salesman until he has satisfactorily passed the examination, complied with other requirements of this Act, and until a certificate of registration has been issued to him or he has received a letter from the Department authorizing him to so engage pending receipt of a certificate of registration.

(e) The Department shall issue to each applicant entitled thereto, a certificate of registration in such form and size as shall be prescribed by the Department. The person to whom such a certificate is issued is hereafter designated `registrant'. This certificate shall show the name and the principal business location of the registrant and, in case of a real estate salesman's certificate, shall show the name of his employer. * * * The certificate of each real estate salesman shall be delivered or mailed to the registered real estate broker by whom such real estate salesman is employed, if he is employed by a registered broker and shall be kept in the custody and control of such broker.

The Department shall prepare and deliver to each registrant a pocket card, not larger than 2 1/4 inches in width and 3 3/4 inches in length, which card among other things shall contain the name and address of the employer, in case the registrant is a salesman * * *.

(f) * * * Every certificate of registration issued under this Act as a salesman shall expire on March 31 of each odd numbered year. The holder of a certificate of registration may renew such certificate during the month preceding the expiration date thereof by paying the required fee. * * *

(g) In the absence of any reason or condition which might warrant the revocation, suspension or refusal to issue a certificate, the Department shall issue a new certificate for each biennium upon receipt of the written application of the registrant and the biennial fee therefor as herein required." (Emphasis added.) Ill. Rev. Stat., 1980 Supp., ch. 111; par. 5727.

Section 13 provides:

"(a) Each real estate broker shall maintain a definite office or place of business within this State for the transaction of real estate business, shall conspicuously display an identification sign on the outside of his office of adequate size and visibility and shall conspicuously display his certificate in his office or ...


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