Dahlgard v. Florida Development Corp. ( 1914 )

Mr. Justice Barnes

delivered the opinion of the court.

Defendant in error (defendant below), a corporation organized under the laws of Florida “for the purpose of buying’, selling and dealing in land and equities therein in Florida and elsewhere,” entered into a contract with plaintiff in error (plaintiff below) for the sale of its Florida lands. Pursuant thereto plaintiff negotiated an agreement with one Luhtala and one Hakala for the exchange of one hundred acres of Florida land for certain lots in DeKalb, Illinois, and subsequently effected a sale to them of ten additional acres of Florida land. The court (before which the case was tried without a jury) found that plaintiff was entitled to commissions for sale of the ten acres but not for the one hundred acres. Only the right to commissions on the latter transaction is here involved.

By the agreement between the parties hereto, plaintiff was to sell for defendant the DeKalb lots so taken in exchange and retain his commissions from the proceeds of the sale. Deeds for the respective properties were executed and delivered. There being some delay incident to the failure of defendant to furnish said purchasers’ abstracts of title to the Florida lands, they insisted upon receiving a reconveyance of their DeKalb lots, and in turn reconveyed the Florida lands to defendant.

Defendant filed its affidavit of merits denying plaintiff’s right to commissions on the transaction and claiming that the trade of the properties was illegal and void.

Some point is raised as to the legality of the court’s action in vacating an order by which an amended affidavit of merits was stricken from the files. We deem it unnecessary to consider it, for the questions here involved would arise upon the original affidavit of merits, regardless of the legality of said action.

It is conceded, and beyond question, that defendant being a corporation could not under our law engage in the business of buying and selling lands in the State of Illinois, and that when it undertook to do so it could neither receive nor give title thereto, and- such has been the settled law in this State since the decision in the cases of Carroll v. City of East St. Louis, 67 Ill. 568. Although the statutes regulating the power of corporations as to holding and dealing in real estate have since been enacted, they have not changed the policy of the law in this respect. Under the doctrine there announced and approved in later cases, defendant received no title to the DeKalb lots, and, therefore, no consideration for the Florida lands. Had it made no deed to the Florida lands the contract could not have been enforced against it. The transaction being ultra vires and void, and therefore not enforcible, the broker could not collect commissions, for, to entitle him so to do, the contract negotiated must be one that is valid, binding and enforcible. As stated in Wilson v. Mason, 158 Ill. 304: “An agreement by a real estate broker to procure a purchaser not only implies that the purchaser shall be one able to comply,but that the seller and the purchaser must be bound to each other in a valid contract.” Authorities cited by plaintiff in error where corporations, though exceeding their powers, have received a benefit, or where it is a question of exceeding authorized power, which can be questioned by the State only, are not in point. Here no benefits were retained, the powers exercised were not authorized, but ultra vires, and the DeKalb lots were not taken for its corporate purposes. The other assignments of error raise no points that can affect this conclusion, as in no event could there be a recovery for commissions on such transaction. The judgment is affirmed.

Affirmed.

Mr. Justice Clark took no part in the consideration of this case.