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STATE REAL ESTATE COMMISSION v. JOSEPH FARKAS (01/25/71)

decided: January 25, 1971.

STATE REAL ESTATE COMMISSION
v.
JOSEPH FARKAS



Appeal to the Court of Common Pleas of Dauphin County from the adjudication of the State Real Estate Commission. Appeal transferred September 1, 1970, to the Commonwealth Court of Pennsylvania.

COUNSEL

Isidor Ostroff, with him Ostroff & Lawler, for appellant.

Stephen Kachmar, Commission Counsel, with him John P. Fernsler, Deputy Attorney General, and Fred Speaker, Attorney General, for appellee.

Judges Kramer, Mencer and Rogers, sitting as a panel of three. Opinion by Judge Rogers.

Author: Rogers

[ 1 Pa. Commw. Page 136]

This is an appeal from an adjudication and order of the State Real Estate Commission revoking the license of the appellant, Joseph Farkas, to practice as a real estate broker.

In June 1966 Christine Johnson called on appellant in answer to an advertisement in a Phoenixville newspaper by which appellant offered a house for sale. Appellant told Mrs. Johnson that the house would be sold to her on the following terms: "I told [her] we were selling that house with a 500 dollar payment on the purchase price, and then we would charge [her] 75 dollars a month for one year, and during the course of that year the 75 dollars would be applied as rent, and anything over and above the expenses would be applied toward the purchase price after one year. After the one year we would try to get you a mortgage at the Building and Loan."

Mrs. Johnson paid the appellant $375 on June 6, 1966, and he furnished her a receipt on which he wrote, "$300 deposit on house 122 St. Mary plus rent $75 6/67/6/66." On June 30, 1966, she paid appellant $200 and was given a receipt on which appellant wrote: "122 St. Mary's total paid on account $500 towards purchase." Neither an agreement of sale nor a lease was prepared. Mrs. Johnson made payments to appellant of $75 in each of the months of July, August, September and October of 1966.

In June of 1966, the St. Mary's street property was owned by the appellant and an Irving Ostroff. Ostroff had left the management of the property entirely to the appellant. The appellant did not tell Ostroff of his dealings with Mrs. Johnson and did not pay over or account to Ostroff for any of the moneys received from her. The record title to the property was in Ostroff alone. A local Savings and Loan Association held a

[ 1 Pa. Commw. Page 137]

$5,000 mortgage calling for monthly payments of fifty dollars. The Savings and Loan dealt exclusively with appellant. No payments had been made on the mortgage since September 1965. In November, 1966, the Association went into possession under the mortgage, acquired title and thereafter sold the property and an adjoining house to Mrs. Johnson for $5,500.

Mrs. Johnson attempted to recover her money but was unable to find appellant. In early 1969, a lawyer questioned appellant about his obligation to Mrs. Johnson. Mrs. Johnson's complaint which commenced this action was made with the assistance of the Community Action Board.

The appellant's explanation of his conduct is that in 1966 he was in deep financial difficulties and that in September of that year the Internal Revenue Service levied on his bank accounts and appropriated any funds to his tax deficiencies. He claims that one such account was an escrow account. Appellant admits that he made no effort to protect any person's money in that account. When investigated by the Real Estate Commission in March 1969, appellant had no file of the Johnson transaction, no records of an escrow account, no deposit slips for Mrs. Johnson's money and "didn't know where anything was."

Appellant returned $600 to Mrs. Johnson after the Real Estate Commission's hearing in this matter.

The Commission found:

"9. Respondent neither prepared nor gave complainant an agreement ...


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