Provens v. Ohio Real Estate Commission

Strausbaugh, P. J. This is an appeal from a judgment of the Court of Common Pleas affirming the order of the Ohio Real Estate Commission which denied plaintiff, the appellant, the right to take an examination to become a licensed real estate broker. The record of the hearing before the commission indicates that plaintiff is a 55 year old married woman, a resident of Hilliard, Ohio, who graduated from Jefferson Township High School, where she was a good student, and attended one year at Cedar-ville College, where she was an outstanding student. The record further indicates that she worked for 8 years for the welfare department in Greene County, in addition to holding various other jobs; that she complied with *46 her husband’s preference that she not work until both children were through high school; that she has recently finished two courses at Columbus Technical Institute; that she scored 257 out of a possible 295 on the examination for a license as a real estate salesperson on November 23,1971; that since obtaining her license she has worked continuously full time as a licensed salesperson for Mr. Floyd Burton, a licensed real estate broker of Hilliard, Ohio; that during her 2% years as a licensed salesperson, she has obtained listings, secured buyers, and closed 15 real estate sales transactions; that she did her own advertising and paid for it herself; that she wrote her own ads; that she showed the properties; that she took care of the sales contracts; that if there was any financing to be done she did work with the credit report; that she worked with the people to obtain their financing; that she attended the closings, signing the necessary papers for the broker that had to be signed; that she obtained the permission of the broker to write checks at the closings; that after the closing she took the money to the trust account, depositing it in the trust account; that at every closing there had never had to be any changes in any of her figures which were always accurate; that her sales consisted of primarily residential properties, although one had been industrial and another commercial; and that she had experience with farm management and in management of rental properties. Her broker, Mr. Burton, testified that in his opinion plaintiff had sufficient experience and capacity to serve as a real estate broker and that he had encouraged her to apply for the license. On April 23, 1974, plaintiff was notified by the Ohio Real Estate Commission that her application had been denied for the following reason: “* * * [Y]ou do not fulfill the requirements of Revised Code 4735.07(E), in that you lack sufficient experience to the satisfaction of the commission.” Plaintiff appealed to the Court of Common Pleas which affirmed the commission’s order. It is from this judgment that this appeal is taken. The first assignment of error reads: “The order of the Ohio Real Estate Commission is *47 not supported by reliable, probative and substantial evidence; it constitutes an abuse of discretion and is against the manifest weight of the evidence in that all of the evidence produced, without contradiction, indicates that appellant has 'had sufficient experience to qualify her for the broker’s examination.” E. C. 4735.07 provided, at the time in question: “The Ohio real estate commission shall issue a broker’s license when it is satisfied that the applicant or each named member or officer of a partnership, association, or corporate applicant has complied with the rules of the commission, has received a passing grade in the broker’s examination, and has provided evidence of having met the following qualifications: “(A) Is honest, truthful, and of good reputation; “(B) Has not been convicted of a felony or crime of moral turpitude * * * “(C) Is at least eighteen years of age; “(D) Is a citizen of the United States; “(E) Has had sufficient experience to the satisfaction of the commission to qualify him for the broker’s examination and has complied with one of the following * * (Emphasis added.) E. C. 4735.10 provided: “The Ohio real estate commission may make reasonable rules and regulations as provided by Chapter 119. of the Eevised Code, relating to: “(A) The form and manner of filing applications for license; “(B) The issuance, suspension, and revocation of licenses ; and the conduct of hearings; “(C) Standards for approval of courses of study required for licenses; “ (D) Times and form of examination for license; “(E) Standards of ethical real estate practice; “(F) Annual certificates of continuation in business; “(U) Placing an existing broker’s license in escrow for periods not to exceed two years upon good cause shown. “The commission may hear testimony in matters re *48 lating to the duties imposed upon it, and the president and secretary of the commission may administer oaths. The commission may require other proof of the honesty, truthfulness, and good reputation of any person named in an application for a real estate broker’s, real estate salesman’s, limited real estate broker’s, or limited real estate salesman’s license before admitting the applicant to the examination or issuing a license.” Although the above sections refer to rules and regulations of the commission, we find no rules and regulations, and are referred to none which had been adopted by the commission delineating or defining “sufficient experience” as set forth in R. C. 4735.07 (E). By failing to define that term a commission may act capriciously and without any standards. Here, the commission has set forth no standards or guidelines to indicate that which will be “sufficient experience” to satisfy the commission. Without such standards or guidelines the action of the commission must be held to be arbitrary and an abuse of discretion. This court spoke pointedly in favor of definite standards of administrative adjudication in the unreported decision In re Blue Cross v. Supt. of Ins., No. 73AP-158, Franklin County Court of Appeals, rendered on December 28, 1973, wherein we pointed out the following: ‘‘ [There is a] * * * social value in encouraging the security of transactions and for some degree of stability. Persons engaged in business have a right to know what government policy and rules are in advance * * * if there be no rule, then the result becomes as flexible as the grass in a breeze. It is important to the democratic process that commissions say what they are doing, and adhere to what they have said unless and until a change is clearly indicated.” See also the unreported decision in In re Blue Cross Hospital Plan, Inc., No. 73AP-497, Franklin County Court of Appeals, rendered on August 27, 1974. It is interesting to note that the legislature has enacted a new law effective March 4, 1975, substituting the following language for R. C. 4735.07 (E): *49 “Has been a licensed real estate salesman in this state for at least two years, and during at least two of the five years preceding his application, has worked as a licensed real estate salesman for an average of at least thirty hours per week, and has completed one of the following * * The question of the validity of that section is, of course, not before us. Plaintiff’s first assignment of error is sustained. The second assignment of error states: “The provisions of Section (E) of Ohio Revised Code Section 4735.07 requiring appellant to have ‘sufficient experience to the satisfaction of the Commission’ constitute an unconstitutional delegation of legislative power and are void. ’ ’ We find that there are sufficient guidelines laid down in the establishment of the Ohio Real Estate Commission by the legislature to enable the commission to establish reasonable rules and regulations to determine what is “sufficient experience” to qualify a candidate for a broker’s examination. The mere fact that the commission failed to set forth the proper rules and regulations does not invalidate the statutory enactment authorizing the commission to so act. We, therefore, overrule appellant’s second assignment of error, reverse the trial court’s judgment, and remand this cause to that court for further proceedings based upon law and this decision. Judgment reversed and cause remanded. Reilly, J., concurs. Whiteside, J., concurs in the judgment only.