Appendix — Polakow's Realty Experts, Inc. v. Alabama

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APPENDIX.

Alabama Statutes

Indictment Against P. F. Strumpf

Indictment Against Polakow’s Realty Experts, Inc.

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Sections 298 to 303, Alabama Real Estate Law,

Title 46, Chapter 14,

Alabama Code 1940.

‘See, 298. License Required.—It shall be unlawful for

any person, copartnership, association or corporation to act

as a real estate broker or real estate salesman, or to adver-

tise or assume to act as such real estate broker or real estate

salesman without a license issued by the Alabama real

estate commission. No co-partnership, association or cor-

poration, shall be granted a license, unless every member

or officer of such co-partnership, association or corporation,

who actively participates in the brokerage business of such

co-partnership, association or corporation, shall hold a

license as a real estate broker or salesman, as hereinafter

provided for, and unless every employee who acts as a

salesman for such a co-partnership, association shall hold

a license as a real estate salesman.

‘“See, 299. Definitions; to whom chapter applies.—A real

estate broker within the meaning of this chapter is any per-

son, firm, partnership, co-partnership, association or cor-

poration, who, for compensation or valuable consideration,

sells or offers for sale, buys or offers to buy, negotiates the

purchase or sale or exchange of real estate, or who leases

or offers to lease, rents or offers for rent, any real estate or

the improvements thereon for others, as a whole or partial

vocation. The term ‘real estate’ as used in this chapter

shall include leaseholds and other interests less than lease-

holds. <A real estate salesman within the meaning of this

chapter is any person who, for a compensation or valuable

consideration, is employed either directly or indirectly by a

real estate broker to sell or offer to sell, or to buy or offer to

buy, or to negotiate the purchase or sale or exchange of real

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estate, or to lease, to rent or offer for rent any real estate,

or to negotiate leases thereof, or of the improvements there-

on, as a whole or partial vocation. One act for a compen-

sation or valuable consideration of buying or selling real

estate of or for another, or offering for another to buy or

sell, or exchange real estate, or leasing, or renting, or of-

fering to rent real estate, except as herein specifically ex-

cepted, shall cause the person, firm, partnership, co-partner-

ship, association or corporation, performing, offering, or

attempting to perform any of the acts enumerated herein to

become a real estate broker or a real estate salesman within

the meaning of this chapter. The provisions of this chapter

shall not apply to any person, co-partnership, association

or corporation, who as owner or lessor shall perform any of

the acts aforesaid with reference to property owned or

leased by them, or to the regular employees thereof, with

respect to the property so owned or leased, where such acts

are performed in the regular course of, or as an incident to,

the management of such property and the investment

therein, nor shall the provisions of this chapter apply to

persons acting as attorney-in-fact under a duly executed

power of attorney from the owner authorizing the final

consummation by performance of any contract for the sale,

leasing, or exchange of real estate, nor shall this chapter

be construed to include in any way the services rendered by

an attorney-at-law, in the performance of his duties as such

attorney-at-law; nor shall it be held to include, while acting

as such, a receiver, trustee in bankruptcy, administrator or

executor, or any person selling real estate under order of

court, nor to include a trustee acting under a trust agree-

ment, deed of trust, or will, or the regular salaried em-

ployees thereof.

‘*See. 300. Creation of real estate commission; members;

compensation; expenses, ete.—There is hereby created the

Alabama real estate commission. The governor shalt ap-

point three persons, each of whom immediately prior to the

date of his appointment has been a resident of the state for

five years, and whose vocation for a period of at least five

years shall have been that of a real estate broker or real

estate salesman; the term of the members of said commis-

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sion shall be for three years, and until their successors are

appointed and qualify. There shall at no time be more than

one commissioner from any one county. Members to fill

vacancies shall be appointed for the unexpired term, The

commission immediately upon the qualification of the mem-

ber appointed in each year shall organize by selecting from

its members a chairman, and may do all things necessary

and convenient for carrying into effect the provisions of

this chapter and may from time to time promulgate neces-

sary rules and regulations. Each member of the commission

shall receive as full compensation for each day actually

spent on the work of said commission the sum of ten dollars

per day and his actual and necessary expenses incurred in

the performance of duties pertaining to his office. The

commission shall employ, and at its pleasure discharge, a

secretary and such clerks and assistants as shall be deemed

necessary to discharge the duties imposed by the provisions

of this chapter, and shall outline their duties and fix their

compensation, subject to the general laws of the state. The

commission shall obtain such office space, furniture, sta-

tionery, fuel, light, and other proper conveniences as shall

be reasonably necessary for carrying out the provisions of

this chapter. The principal office shall be located in the

city of Montgomery, Alabama. The commission shall adopt

a seal with such design as the commission may prescribe

engraved thereon, by which it shall authenticate its pro-

ceedings. Copies of all records and papers in the office of

the commission, duly certified and authenticated by the seal

of said commission shall be received in evidence in all courts

equally and with like effect as the original. All records

kept in the office of the commission under authority of this

chapter shall be open to public inspection under such rules

and regulations as shall be prescribed by the commission.

All fees and charges collected by the commission under the

provisions of this chapter shall be paid into the treasury,

and shall constitute a separate fund to be disbursed by the

treasurer on order of the board of commissioners and with

the approval of the governor. All expenses incurred by

the commission under the provisions of this chapter, in-

cluding the compensation of members, secretaries, clerks

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and assistants shall be paid out of the separate fund in the

treasury upon warrants of the comptroller drawn upon the

treasurer from time to time when vouchers therefor are ex-

hibited and approved by the commission and approved by

the governor. The treasurer is directed to pay out of the

separate fund hereinabove provided upon the order of the

secretary of the board of commissioners, countersigned by

the chairman of the board of commissioners and approved

by the governor, provided the total expenses for every pur-

pose incurred shall not exceed the total fees and charges

collected and paid into the state treasury and all moneys

remaining in the separate fund herein provided for at the

end of the fiscal year not expended as herein provided for

shall be covered into the treasury and shall be and become a

part of the general fund of the state.

“See. 301. To whom licenses granted.—Licenses shall

be granted only to persons who are trustworthy and com-

petent to transact the business of a real estate broker or

real estate salesman in such manner as to safeguard the

interests of the public, and only after satisfactory proof

has been presented to the board. An applicant for a real

estate broker’s license shall prove his competency to the

commission by the taking of an examination prescribed by

the board either in written form or by oral questionnaire;

said examination relating to the principles of real estate

practice and of business ethics pertaining thereto, and said

applicant in addition to the original license fee shall pay an

examination fee of five dollars, which examination fee shall

cover all examinations prior to the issuance of such original

broker’s license. The applicant must be a person whose

application has not been rejected in this or any other state

within two years prior to date of application.

‘*See. 302. Requisites of application. —Every applicant

for a real estate broker’s license shall apply therefor in

writing upon blanks prepared or furnished by the real estate

commission. Such application shall be accompanied by the

recommendation of at least two citizen real estate owners

not related to the applicant, who have owned real estate for

a period of one year or more, and who have known applicant

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for a period of six months, in the county in which said appli-

cant resides, or has his place of business, which recommen-

dation shall certify that the applicant bears a good reputa-

tion for honesty, truthfulness, fair dealing and competency,

and recommending that a license be granted to the applicant.

Every application for a broker’s license shall state the name

of the person, firm, partnership, co-partnership, association

or corporation with which he will be associated in the busi-

ness of real estate, and the location of the place, or places,

for which said license is desired and set forth the period of

time, if any, which said applicant has been engaged in the

real estate business. Every applicant for a license shall

furnish a sworn statement setting forth his present address,

both of his business and residence, a complete list of all

former places where he may have resided or been engaged in

business for a period during the last five years, accounting

for such entire period, and the length of such residence, to-

gether with the name and address of at least one real estate

owner in each of said counties where he may have re-

sided or have been engaged in business, and whether he has

been convicted of a criminal offense involving moral turpi-

tude, and if so, what offense. Every applicant for a sales-

man’s license shall, in addition to the requirements of this

section, also set forth the period of time, if any, during

which he has been engaged in the real estate business, stat-

ing the name and address of his last employer, and the name

and the place of business of the person, firm, partnership,

co-partnership, association or corporation then employing

him, or into whose service he is about to enter. The appli-

‘ation shall be accompanied by a written statement by the

broker in whose service he is about to enter, stating that in

his opinion the applicant is honest, truthful, and of good

reputation, and recommending that the license be granted

to the applicant. Every application for a license, under the

provisions of this chapter, shall be accompanied by the

license fee herein prescribed. In the event that the com-

mission does not issue the license, the fee shall be returned

to the applicant. The commission is expressly vested with

the power and authority to make and enforce any and all

such reasonable rules and regulations connected with the

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application for any license as shall be deemed necessary to

administer and enforce the provisions of this chapter. All

such rules and regulations to be subject to the approval of

the governor.

‘See. 303. Hearing and determination before granting or

refusing.—The commission, after application in proper form

has been filed, shall, before refusing to issue a license, set

the application down for a hearing and determination as

hereinafter provided in section 306 of this title.’’

Indictment.

THe Strate or ALABAMA, JEFFERSON CouNTY.

Circutr Court, Bessemer Division, Ocroper Term, 1941.

1. The Grand Jury of said County, charges that before

finding of this indictment P. 8. Strumpf whose name is

otherwise unknown to this Grand Jury and within twelve

months before the finding of this indictment, did, for a valu-

able consideration or compensation, as a whole or partial

vocation, sell or offer to sell, buy or offer to buy, lease or

offer to lease, rent or offer to rent, or otherwise negotiate

the sale, purchase, or exchange of real estate or an interest

therein as agent or salesman of another without having

first procured a license from the Alabama Real Estate Com-

mission, so to do as provided by law and contrary to law,

2. The Grand Jury of said County further charges, that

before the finding of this indictment, P. S. Strumpf whose

name is otherwise unknown to this Grand Jury and within

twelve months before the finding of this indictment, did, for

a valuable consideration or compensation, as a whole or

partial vocation, sell or offer to sell, buy or offer to buy,

lease or offer to lease, rent or offer to rent, or otherwise

negotiate the sale, purchase or exchange of real estate or an

interest therein as agent or salesman of another without

having first procured a license, so to do as provided by law

and contrary to law,

3. The Grand Jury of said County further charges that,

before the finding of this indictment P. S. Strumpf whose

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name is otherwise unknown to this Grand Jury and within

twelve months before the finding of this indictment, did,

for compensation or a valuable consideration, sell or offer

to sell, rent or offer to rent, buy or offer to buy, lease or

offer to lease, or otherwise negotiate the sale, purchase, or

exchange of real property or an interest therein as a real

estate salesman or a real estate broker without having first

procured a license from the Alabama Real Estate Commis-

sion, so to do as provided by law and contrary to law,

4. The Grand Jury of said County further charges that,

before the finding of this indictment, P. S. Strumpf, whose

name is otherwise unknown to this Grand Jury and within

twelve months before the finding of this indictment, did,

for compensation or a valuable consideration, sell or offer

to sell, rent or offer to rent, buy or offer to buy, lease or

offer to lease, or otherwise negotiate the sale, purchase, or

exchange of real property or an interest therein as a real

estate salesman or a real estate broker without having first

procured a license, so to do as provided by law and contrary

to law against the peace and dignity of the State of Alabama.

Arthur Green, Deputy Solicitor.

Indictment.

Tne State or ALABAMA, JEFFERSON CouNTY.

Circurr Court, Bessemer Drvtston, Ocroser Term, 1941.

1. The Grand Jury of said County, charges that before

finding of this indictment that within twelve months before

the finding of this indictment, Polakow’s Realty Experts,

Ine., a corporation, whose name is otherwise unknown to

this Grand Jury, acting as the agent of another, did employ

salesmen or agents compensated on a commission basis and

which said agents had not first procured a license from the

Alabama Real Estate Commission so to do, did sell or offer

for sale as real estate salesmen or agents, real property or

an interest therein, and contrary to law,

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2. The Grand Jury of said County further charges that,

before the finding of this indictment, Polakow’s Realty

Experts, Inc., a corporation, whose name is otherwise un-

known to this Grand Jury and within twelve months before

the finding of this indictment, for a valuable consideration

or compensation as the agent of another and as a whole or

partial vocation, did sell or offer to sell, rent or offer to rent,

lease or offer to lease, or did otherwise negotiate the pur-

chase, sale, or exchange of real property without having

first procured a license from the Alabama Real Estate Com-

mission, so to do and as provided by law and contrary to law,

against the peace and dignity of the State of Alabama.

Arthur Green, Deputy Solicitor.

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Propositions of Law.

Proposition I.

The right to work for a living in the common occupations

of the community is of the very essence of personal freedom

that it was the purpose of the 14th Amendment to procure.

Traux v. Raich, 239 U.S. 35;

N. C. Law Review, Vol. 17, page 1.

Propvosition I].

The power to regulate a business does not necessarily in-

clude the power to exclude persons from engaging in it.

State v. Harris, 216 N. C. 746, 6S. E. (2d) 854;

Replogle v. City of Little Rock, 166 Ark. 617, 267 5. W.

353, 36 A. L. R. 1333;

People ex rel. Durham Realty Corp. v. LaFetra, 230

N. Y. 429, 103 N. E. 601, 16 A. L. R. 152;

State v. Porter, 94 Conn. 639, 110 A. 59;

State of Ohio v. Helvering, 292 U.S. 360, 54S. Ct. 725,

78 L. ed. 1037.

Proposition III.

The real estate business is a harmless, innocuous business

and one’s right to follow it cannot be destroyed by legis-

lation.

Rawles v. Jenkins, 279 S. W. 350;

State v. Harris, 216 N. C. 746, 6S. Ki. (2d) 854;

Williams v. Standard Oil Co., 278 U.S. 235;

New State Ice Co. v. Liebmann, 285 U.S. 262;

Wolff Packing Co. v. Court of Industrial Relations, 262

U. S. 522;

Ribnik v. McBride, 277 U.S. 350, 56 A. L. R. 1327;

Adams v. Tanner, 244 U. 8. 590;

Bramley v. State, 2S. KE. (2d) 647;

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Richardson v. Coker, 3S. BE. (2d) 636;

State v. Dixon, 215 N. C. 161, 1S. KE. (2d) 521;

Richey v. Smith, 84 Pac. 851, 5 L. R. A. (NS) 674;

Replogle v. Little Rock, 166 Ark. 617, 267 S. W. 353, 36

A. L. R. 1335;

City of Osceola v. Blair, 231 lowa 771, 2 N. W. (2d) 83;

DeBerry v. City of La Grange (Ga.), 6S. E. 146;

Bushman v. Bechtel, 114 Pac. 227;

Kent Stores v. Wilentz, Atty. Gen., 14 Fed. Rep. 1.

Argument.

May it please the Court:

Mr. Tiedeman, in his work on State and Federal Control

of Persons and Property, expressed the self-evident truth

in the following language, at page 236:

‘‘No man’s liberty is safe if the legislature can deny

him the right to engage in a harmless ealling.’’

This court many years ago placed the stamp of its ap-

proval upon the idea stated by the author, in the following

language :

‘It requires no argument to show that the right to

work for a living in the common occupations of the com-

munity is of the very essence of personal freedom and

opportunity that it was the purpose of the (14th)

Amendment to secure.’’

Traux v. Raich, 239 U.S. 35.

In view of these pronouncements, it would seem that the

question of whether a man must obtain a permit in order to

work as a real estate broker or real estate salesman would

in a measure depend on whether the real estate business

is acommon occupation. If so, it would seem that the indi-

vidual could not be required to obtain a permit to engage in

an occupation of that kind. If not, the question would then

be whether the Alabama real estate law is a regulation of the

real estate business or a law excluding persons from engag-

ing in such business.

The authorities say that the power to regulate a business

or occupation does not necessarily include the power to ex-

clude persons from engaging in it. The question is exhaus-

tively discussed in N. C. Law Review, Vol. 17, page 1:

State v. Harris, 216 N. C. 746, 6S. KH. (2d) 854.

Replogle v. City of Little Rock, 166 Ark. 617, 267 S. W.

353, 36 A. L. R. 1333.

People ea rel. Durham Realty Corp. v. LaFetra, 230

N. Y. 429, 130 N. KE. 601, 16 A. L. R. 152.

State v. Porter, 94 Conn. 6389, 110 A, 59.

State of Ohio v. Helvering, 292 U.S. 360, 54.8. Ct. 725,

78 L. ed. 13807.

The authorities cited also say that there is a well recog-

nized gap between the regulation of a business or oceupa-

tion and restrictions preventing persons from engaging in

it, to which the court must pay careful attention. While

many of the rights of man, as declared in the Constitution,

contemplate adjustment to social necessities, some of them

are not so yielding. Among them the right to earn a living

must be regarded as inalienable. Conceding this, a law

which destroys the opportunity of a man or woman to earn

a living in one of the ordinary, harmless occupations of life

by the erection of educational and moral standards of fitness

is legal grotesquety.

State v. Harris, 216 N. C. 746, 6S. KE. (2d) 854.

In Adams v. Tanner, 244 U.S. 590, the attempt to make

‘it unlawful to operate employment agencies was declared

unconstitutional, and it was said that there was nothing in

the nature of the business that in any way ‘‘threatens or

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endangers the public health, safety or morals’’. In that case

it was said:

‘*Because abuses may, and probably do, grow up in

connection with this business, is adequate reason for

hedging it about by proper regulations. But this is

not enough to justify destruction of one’s right to

follow a distinctly useful calling in an upright way.”’

To like effect are:

Ribnik v. McBride, 277 U. S. 350, 56 A. L. R. 1327.

Wolff Packing Co. v. Court of Industrial Relations, 262

U. S. 522.

Williams v. Standard Oil Co., 278 U. S. 235.

New State Ice Co. v. Liebmann, 285 U. S. 262.

The Supreme Court of Georgia struck down a photog-

raphy law.

Bramley v. State, 2S. BE. (2d) 647.

The Supreme Court of Georgia also struck down a law

requiring an electrical contractor to submit to a decision

of an examining board as to his ability to satisfactorily com-

plete his contracts with citizens of the city.

Richardson v. Coker, 3S. B. (2d) 636.

In State v. Dixon, 215 N. C. 161, 1S. KE. (2d) 521, the Su-

preme Court of North Carolina declared the North Carolina

real estate law unconstitutional on the ground that it vio-

lated a provision of the North Carolina Constitution relat-

ing to local legislation, but in view of that court’s decision

in State v. Harris, 216 N. C. 746, 6S. E. (2d) 854, it would

seem that there could be no doubt about what the North

Carolina court thinks about the constitutionality of the real

estate law.

In the Harris case the Supreme Court of North Carolina

struck down a state dry cleaning law. This case is one of

the best recent cases dealing with the subject.

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In State ex rel. Richey v. Smith, 84 Pae. 851, 5 L. R. A.

(NS) 674, an act requiring journeymen plumbers to secure

a license as a condition for carrying on their trade was de-

clared unconstitutional.

The Supreme Court of Arkansas reached the same con-

clusion in Replogle v. Little Rock, 166 Ark. 617, 267 S. W.

353, 36 A. L. R. 1335.

The Supreme Court of Kentucky declared the Kentucky

real estate law unconstitutional.

Rawles v. Jenkins, 279 8. W. 350.

In Becker v. State, 185 A. 93, the Superior Court of

Delaware declared a dry cleaning law unconstitutional. The

decision was based on the proposition that a citizen has a

right to make a living in a common occupation without get-

ting a permit from anybody so to do.

In City of Osceola v. Blair, 231 lowa 771, 2. N. W. (2d) 83,

decided February 10, 1942, the Supreme Court of Towa de-

clared an ordinance unconstitutional for forbidding the

soliciting of orders for goods, wares and merchandise at

private residences, and to like effeet is DeBerry v. City of

La Grange (Ga.), 6S. Kh. 146.

In Bushman v. Bechtel, 114 Pae. 227, the Supreme Court

of Arizona struck down a board of examiners for photog-

raphy. It was ruled that the business of making photo-

eraphs is not inherently dangerous to society, but is an

entirely innocent occupation and that therefore the police

power could not be used to prevent a person from following

a business so innocuous, and that the effort to do so was a

deprivation of a property right—the right to earn a living—

without due process of law.

This court v»held the constitutionality of a blue-sky law

in Hall v. Geiger-Jones Co., 242 U. 8. 539. It was ruled

chat the integrity of securities can only be assured by the

probity of the dealers in them and the information which

may be given of them, That reason cannot apply to real

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estate that everybody can see and which is assessed for

taxes on a public record open to all.

Zerlin v. La. Real Estate Board, 103 So. 528; the Pope

Case, 242 Pac. 290; Roman v. Lobe, 243 N. Y. 51, 152 N. E.

451, 60 A. L. R. 1329, and State v. Rose, 122 So. 225, appar-

ently sustain a real estate law similar to the Alabama law.

A three-judge Federal Court declared the dry cleaning

law unconstitutional in New Jersey in Kent Stores vy.

Wilentz, Attorney General of New Jersey, 14 Fed. Rep.,

page 1. An interesting classification of the Federal cases

is found in the opinion in that case.

Polakow Realty Experts, Inc., is a corporation organized

under the laws of the State of Alabama with power to buy,

sell and exchange real estate. It could only act through

an agent. The effect of the decision by the Supreme Court

of Alabama is to say that this corporation cannot employ

a person on salary or commission to sell its real estate,

unless such person is a licensed real estate broker or a

licensed real estate salesman, without being guilty of a

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: crime. This has the effect of depriving the corporation of

its property without due process of law.

4 It is respectfully submitted that the writ of certiorari

should issue to the end that this court may properly review

the erroneous decision complained of.

This may easily be one of the most important cases ever

brought to this court for decision. The right of an Ameri-

can citizen to earn his living by the sweat of his brow, in a

common, ordinary innocuous occupation without obtaining

a permit, is the main question in the ease.

Respectfully submitted,

Horace C. WiLkinson,

Counsel for Petitioners.

(4932)

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