Furth v. Farkasch

This cause comes into this court on a petition in error to the municipal court of the city of Cleveland.

In the court below the plaintiff, who is plaintiff in error here, brought an action to recover on a contract, which he there set forth, that he and the defendant had entered into an agreement whereby, for a good consideration, a sort of a partnership relation was created between them, which permitted the plaintiff below, the plaintiff in error here, to share in the money realized from commissions for the sale of real estate that had been carried into execution by the defendant. He set up in his statement of claim the agreement and the amount of money that had been earned by the defendant, to which he was entitled by virtue of the agreement to a pro rata share, and asked for judgment.

The defendant below demurred to this statement of claim, on the ground that this cause of action related to commissions growing out of the sale of real estate, and was, therefore, within the statute of frauds, and that the contract, not having been in writing, was unenforceable, and that, therefore, the statement of claim did not state a cause of action. I should say that this demurrer was to the fourth amended statement of claim, which set forth that they entered into an oral contract. The demurrer interposed was sustained, judgment was entered against the plaintiff, and error is prosecuted to this court to reverse that judgment.

The sole and only question before the court was, and now is: Is the partnership relation, whether it is a general partnership or a particular partnership, or an agreement to share profits or receipts of a common enterprise between two individuals, the earnings of which enterprise accrue from commissions earned in the sale of real property, within the statute of frauds, so that, before either of the so-called partners can recover, the contract must be in writing?

It must be remembered that the commission referred to in this statement of claim had been earned, and it is suppositional that the contract for the commission with the owner of the real estate which was sold was in writing. This is immaterial, because the statement of claim merely states that money had been drawn by the defendant, and that he had violated his contract by not paying a part of it to the plaintiff below, plaintiff in error here. We do not think that this form of contract comes within the statute of frauds. The law under the old section of the statute of frauds (Section 8621, General Code), that the sale of an interest in real property must be in writing, did not apply to a partnership between two persons, which partnership was formed entirely for the buying and selling of real estate. Although the contract for the buying and selling of real estate was within the statute, and must be in writing, a contract between two individuals to enter into a partnership relation, whereby either or both would sell real estate and divide the proceeds between them, was not within the statute of frauds.

The statute of frauds passed by the Legislature of Ohio on March 27, 1925 (111 O.L., 104), amending Section 8621, General Code, which provided that no commission for the sale of any interest in land should be enforceable without its being in writing, did not apply to this sort of contract between partners, but it provided for contracts where a real estate agent sought to hold the owner or lessor of real property for the commission for selling it.

That is in no sense true here, and we think the judgment of the municipal court was clearly in error. The judgment will therefore be reversed, and the cause remanded, with instructions to overrule the demurrer.

Judgment reversed and cause remanded.

SULLIVAN, P.J., and LEVINE, J., concur.