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ALFRED V. MEITNER v. STATE REAL ESTATE COMMISSION (03/19/71)

decided: March 19, 1971.

ALFRED V. MEITNER
v.
STATE REAL ESTATE COMMISSION



Appeal to the Court of Common Pleas of Dauphin County from the adjudication and order of the State Real Estate Commission in case of Department of State Commission of Professional and Occupational Affairs, State Real Estate Commission v. Alfred V. Meitner. Appeal transferred September 1, 1970 to the Commonwealth Court of Pennsylvania.

COUNSEL

Harry A. Rutenberg, with him Ronald N. Rutenberg, and Rutenberg, Rutenberg, Rutenberg & Rutenberg, for appellants.

Steven Kachmar, Assistant Attorney General, with him John P. Fernsler, Deputy Attorney General, and Fred Speaker, Attorney General, for appellee.

Judges Crumlish, Jr., Wilkinson, Jr. and Manderino, sitting as a panel of three. Opinion by Judge Crumlish, Jr. Concurring and Dissenting Opinion by Judge Manderino.

Author: Crumlish

[ 1 Pa. Commw. Page 428]

Appellant, a licensed real estate broker since 1944, was also Assistant Treasurer of Cayuga Land Co., a Pennsylvania corporation involved in the real estate development known as Cresheim Manor in Philadelphia. Meitner functioned under the name Meitner Company at 6212 Ridge Avenue in Philadelphia. Cayuga Land's offices were located at Northeast Avenue and Red Lion Road in Philadelphia and its sample home was at Cresheim Manor.

The complainants, Williams, in November, 1965, gave One Hundred Dollars in deposit on a lot in Cresheim Manor to appellant's son, Alfred V. Meitner, Jr., who was working at the sample home. The younger Meitner is a licensed real estate salesman with his father and is also Assistant Vice President of Cayuga Land Co. Having made deposit the Williams entered into an agreement of sale with Cayuga Land, the terms

[ 1 Pa. Commw. Page 429]

    of which called for a One Thousand Dollar deposit which was not to be held in escrow. The balance of Nine Hundred Dollars was tendered by check drawn by a third party which was endorsed at the request of the younger Meitner to Cayuga Land. First Federal Savings and Loan Association subsequently foreclosed its mortgage on the lot in question and Cayuga Land became insolvent and the Williams lost their deposit.

The State Real Estate Commission, after proper hearing, concluded that Meitner had failed to comply with the Real Estate Brokers' License Act of May 1, 1929, P.L. 1216, as amended, 63 P.S. 431 et seq., because he had failed to place the Williams' deposit in escrow. In addition, the Commission held that Meitner's present location and business name did not correspond with his license in violation of Section 9 of the Act and Rule 6.9 of the Commission Rules and Regulations. As a result, Meitner's license was revoked. Meitner, in this appeal, erroneously contends that he was not a broker in the Williams' transaction but that he was merely an officer of the seller corporation.

He also challenges the severity of the Commission's decision. With this we agree.

He contends he was not a broker in this transaction and relies upon his agreement with Cayuga Land Co., the pertinent parts of which follow. He was Assistant Treasurer of the company and as such would receive a percentage of the final profits of the Cresheim Manor project. He was not to receive any commission or remuneration based on any individual sale. A similar arrangement was made with his son. He contends that this insulates him from the Brokers' Act in that he was not a broker nor did he represent himself to be one.

Section 2(a) of the Act defines "real estate brokers" as "all persons, . . . who, for another and for a fee, commission

[ 1 Pa. Commw. Page 430]

    or other valuable consideration, shall sell, . . . or shall negotiate the sale, . . . or shall hold himself out as engaged in the business of selling, . . . any real estate, interest in real estate, the property of another, . . .". Subsection (b) of 2 defines a "real estate salesman" as one employed by a "real estate broker" who performs the functions in 2(a). Finally, subsection 2(c) exempts from the brokership of 2(a) sales of property owned by a broker.

Had Meitner agreed with Cayuga Land to represent the company in the sale of its lots for a percentage of the company's profits, there is no doubt that the Act would apply. It is apparent when looking at the agreement that Cayuga Land hoped to obtain the benefit of the Meitners' brokerage expertise while at the same time insulating their transactions from the Brokers' Act. The Cresheim Manor project was not truly intended to be a joint venture between Meitner and the Cayuga Land's investors. Meitner, despite the corporate title accorded him, was essentially no more than the corporation's personal real estate broker.

The courts of this Commonwealth have long held that officers of corporations are not deemed to be the owners of corporate property even to the extent that they are shareholders of the corporation. Monongahela Bridge Company v. Pittsburgh & Birmingham Traction Co., 196 Pa. 25, 46 A. 99 (1900).*fn1 This principle has been applied to the Brokers' Act in holding that corporate property is not deemed to be the property of ...


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