Maxwell’s Maxim of Equity
August 11, 2015 § 3 Comments
“It has been said: ‘[E]quity must follow the law. But where the law provides no remedy, equity may do so.’ To that we would add: Since ‘equity must follow the law,’ where the law prohibits a remedy, equity may not do so.”
That is the first sentence (footnote omitted) of the COA’s opinion in Mosley v. Triangle Townhomes, LLC, penned by Judge Maxwell, and decided July 28, 2015.
In that case, Harold Mosley had filed suit in chancery court for specific performance against Triangle Townhomes, LLC, who, he alleged, had promised to pay him “a fair and equitable finder’s fee if he found a buyer” for that company’s apartment complex. Mosley did find a buyer, who paid $6 million. Mosley, who was not a licensed real estate broker, claimed that he had repeatedly demanded that Triangle pay him, but the entity refused. He wanted the chancery court to award him a finder’s fee of between 3% and 5% ($180,000 – $300,000), since a licensed realtor would have charged 6% to 10% ($360,000 – $600,000).
Now, this would seem on the surface to be the quintessential case for equitable relief. A promise, upon which another acted in good faith, producing monetary benefit to the promisor, followed by a refusal to pay. Equity to the rescue, right?
Not so fast.
Triangle filed a R12(b)(6) motion to dismiss for failure to state a claim because MCA 73-35-33(1) prohibits any person without a license from filing suit to recover a real estate broker’s fee. Judge Maxwell described how the chancellor ruled:
¶6. The chancellor agreed that no equitable doctrine or quasi-contract theory could prevail over the clear public policy that anyone performing real-estate-broker services, even just one time, must be duly licensed. See Miss. Code Ann. § 73-35-1 (Rev. 2012); Miss. Code Ann. § 73-35-3(1), (3) (Rev. 2012). Mosley was not a licensed real estate broker. Nor did he fall under a statutory exception. See Miss. Code Ann. § 73-35-3(8) (Rev. 2012). So because section 73-35-33(1) prohibited him from suing for any fee connected with real-estate-broker services, the chancellor dismissed Mosley’s action.
Mosley appealed, and in an eight-page opinion, the COA affirmed, concluding essentially the same as had the learned chancellor.
This case illustrates that equity does, indeed, follow the law. The law prohibited Mosley from bringing his suit, and the chancellor followed the law that dictated that result. In doing so, the chancellor followed one of equity’s most ancient and keystone maxims. Judge Maxwell’s corollary: ” … where the law prohibits a remedy, equity may not do so (i.e., provide a remedy)” is the flip side of that maxim.
I’m always heartened when I see maxims and equitable principles at the heart of our appellate court decisions. I take it as a sign that maybe equity is still viable, after all. So in honor of the occasion, I propose adoption of a new maxim of equity, which I will call Judge Maxwell’s Maxim: “Where the law prohibits a remedy, equity may not provide that remedy.” Hear, hear!