No. 2387 Philadelphia, 1982, Appeal from Order of the Court of Common Pleas, Civil Division, of Montgomery County, No. 76-18182.
James F. Mangan, Philadelphia, for appellants.
Ronald N. Rutenberg, Philadelphia, for appellee.
Brosky, Wieand and McEwen, JJ. McEwen, J., files a dissenting opinion.
[ 331 Pa. Super. Page 493]
May a person who negotiates a lease for another but who lacks a real estate broker's license maintain an action to recover a ten percent interest in a corporation allegedly promised to him as compensation for successful negotiation of the lease? We hold that such an action is barred by the provisions of the Real Estate Brokers License Act.*fn1 An equity decree allowing recovery, therefore, must be reversed.
Donald Wilkins, a retired businessman, and George Heebner, who was actively engaged in the development of commercial real estate, were acquainted in the Philadelphia area but met again in Florida and became friends in 1971. In June, 1974, Heebner asked Wilkins to use his business acumen to obtain a favorable lease of undeveloped land in Abington Township, Montgomery County, which was then owned by Baederwood Center, Inc. Heebner offered monetary consideration for Wilkins' services, but Wilkins declined the offer because of the adverse effects he believed such a payment would have on his social security benefits and income tax liability. It was then agreed that if Wilkins were able to negotiate a favorable lease, he would be compensated by a ten percent interest in the commercial enterprise which Heebner intended to place upon the leasehold
[ 331 Pa. Super. Page 494]
estate. Wilkins conducted extensive negotiations throughout 1974 and, despite competing interests, was able to negotiate terms of a ninety-nine year lease acceptable to Heebner and the owner. Heebner formed a wholly owned corporation, known as B & K Industries, Inc., which entered a lease agreement with the owner on or about December 24, 1974. A shopping center was constructed on the leased tract, which, in 1980, produced rentals of $276,000. Despite this success, Heebner has steadfastly refused to assign or transfer to Wilkins any shares of stock of B & K Industries, Inc.
Wilkins commenced an action in equity against Heebner and B & K Industries, Inc. to compel the assignment of a ten percent interest in B & K Industries, Inc. and a payment of ten percent of the profits realized by the corporate enterprise. The chancellor, although aware of the provisions of the Real Estate Brokers License Act which proscribe actions for compensation by unlicensed real estate brokers, concluded that the Act had no application because Wilkins and Heebner had been engaged in a joint venture. Heebner and B & K Industries appealed. We are constrained to agree with appellants that the evidence does not support the chancellor's finding of a joint venture. The evidence disclosed, rather, an agreement to compensate Wilkins for services rendered in negotiating a lease of real estate for Heebner. An action to enforce such an agreement is barred by statute.*fn2
Section 16 of the Real Estate Brokers License Act of 1929, 63 P.S. § 446,*fn3 bars an action to recover compensation by an unlicensed "real estate broker" by the following language:
[ 331 Pa. Super. Page 495]
No action or suit shall be instituted, nor recovery therein be had, in any court of this Commonwealth 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 others than licensed real estate brokers, unless such person, copartnership, association or corporation was duly ...