This section is from the book "American Law Of Real Estate Agency", by William Slee Walker. Also available from Amazon: American law of real estate agency.
An action by a broker for his commissions will not lie until it is shown that he has effected or contracted a sale of the property; unsuccessful efforts, however meritorious, afford no ground of action, he loses his labor and effort which he staked upon success; his commissions are based upon the contract of sale. Viaux v. Old South Society, 133 Mass. 1, 10; Drury v. Newman, 99 Mass. 256. See also Sec. 563
The recovery in an action by a principal against a broker for fraudulently representing that the worthless property on which the loan was made was good security, is not affected by the question whether he shared the money with or delivered any part of it to the pretended borrower. Bubens v. Merd, 121 Cal. 17, 53 P. 432.
One who employed a broker to sell his land can not maintain an action against the broker to recover the balance of the purchase money in the hands of the latter until a demand, and an accounting on demand, has been made and refused. Gobin v. Phillips, 12 Ind. App. 629, 40 N. E. 929; Shepard v. Brown, 9 Jur. N. S. (Eng.) 195, 78 T. Rep. N. S. 499, 11 W. Rep. 162.
Where, in an action against brokers who had effected a sale of plaintiff's land, the parties alleged that defendants received from the purchaser a sum of money for the use of plaintiff and retained it, refusing to pay it over, the petition was not insufficient for failing to allege that defendants were authorized to collect the money. Harrison v. Lakeman, 189 Mo. 581, 88 S. W. 53.
Where the property of the principal is sold by the broker on terms not authorized, in an action against the latter for damages caused by such sale, in the absence of an allegation of fraud on the part of the agent, the principal must plead a return of the consideration to the purchaser or an offer to do so. Lunn v. Guthrie, 115 Iowa, 501, 88 N. W. 1060.
Plaintiff agreed in writing to convey lands to the order of the defendant for a price named, and to pay him a brokerage commission for effecting a sale of it; the defendant sold the land for a sum larger than the price named by the plaintiff, and retained the difference himself, and charged the plaintiff his commissions. Held, in an action to recover the difference, that the plaintiff should have been permitted to show that his property had been and was in the hands of the defendant for sale as a broker on commission before and at the time of signing the agreement, as well as what representations were made by the defendant as to his object in taking the agreement, and its purposes so far as he was concerned, as, if they were of the nature which the plaintiff offered to show, they had a tendency to show that the agreement was procured by fraud and misrepresentation on the part of the defendant. Bassett v. Rogers, 165 Mass. 377, 43 N. E. 180.
"Where separate owners of part of an entire piece of real estate jointly employed a broker to sell the entire tract, an action may be maintained against them jointly on the contract. McGill v. Pressly, 62 Ind. 193. See also Sec. 407. Where an intending purchaser of land, who had paid a sum as for first money to the broker employed to sell it, refused to complete his contract of purchase and waived the time within which he could complete it, and the broker converted the sum paid, the right of the owner of the land to sue the broker for such sum accrued, though the time for the purchaser's completion of the contract had not expired. M. L. Chambers & Co. v. Herring (Tex. Civ. App. '05), 88 S. W. 371.
A broker under a contract to procure a purchaser of real estate, which stipulated that the owner was to receive a specir fied sum out of the price, and that the balance was to be paid to the broker as his commissions, does not make out a case for the recovery of his commissions by showing that he secured a contract with solvent parties to purchase the land, but must show, either that the owner received some part of the balance of the price to which the broker was entitled, or that the parties who agreed to purchase were ready, able and willing to purchase, and were prevented from doing so by the default of the owner. Lewis v. Briggs, 81 Ark. 96, 98 S. W. 683. See also Sec. 535.
M. & W., each claiming to have been the procuring cause of the sale of defendant's farm, brought separate actions for commissions against defendant in different counties; W. was made a party defendant to M.'s action, and filed an answer, making it a cross-petition against defendant, to which defendant answered and M. filed a reply. Held, that W.'s action should be dismissed, and both M. and W. should be required to interplead in the action in which both were.parties. Hopkins v. Moseley, 31 Ky. L. R. 1308, 105 S. W. 104.
Where a real estate agent employed by the vendor in a sale of land holds the receipt given the purchaser by his principal for money paid thereon, and afterward the sale is abandoned by the vendor and the money returned to the agent who delivers up the receipt, he is so far acting as the agent of the purchaser in the receipt of the money that the latter may maintain an action against him to recover it. Phelps v. Brown, 95 Cal. 572, 30 P. 774. See Sec. 25.
As a result of the confidential relations existing between the parties, and the good faith required, if an agent, being authorized to sell land for his principal at a fixed price, sells it for a higher price, he must account to his principal for the excess. McDonald v. Fithian, 1 Gilm. (I11.) 269; Ziegler v. Hughes, 55 I11. 288; Meeker v. York, 13 La. Ann. 18; Bruce v. Davenport, 36 Barb. (N. Y.) 349; Merryman v. David, 31 I11. 404; Kerfoot v. Hyman, 52 I11. 512.
Plaintiff alleged that he employed H. to find a purchaser for a farm, and that he found a purchaser for a price which included the assignment of a note and mortgage executed by S.; that on the day the sale was to be completed the purchaser handed H. a roll of money and some papers, which he falsely represented to be the note and mortgage of S. H. falsely and fraudulently represented that it was necessary for him to retain the papers to have the assignments recorded, which plaintiff permitted him to do; that the papers so turned over were not in fact the note and mortgage of S., but two notes executed by G., which were outlawed and worthless; that as soon as plaintiff learned such fact he refused to accept the G. notes and demanded a return of his deed, offering to return the consideration, which was refused; and that the purchaser and H., both of whom were made defendants, had conspired to cheat and defraud plaintiff and had agreed that the G. note should be substituted for the S. note, and that H. should represent that the papers so turned over were the papers agreed to be received, etc., and prayed judgment for damages sustained by reason of defendants' fraudulent acts in the sum of $2,000. Held, that the complaint stated a cause of action ex delicto and not on contract. Francesi v. Hatch, 117 Wis. 242, 93 N. W. 1118.
A real estate broker who takes an option for the purchase of property in his own name, but in reality for the benefit of a customer to whom he demands its conveyance, having himself no interest in the contract beyond a contingent commission in case the sale is made, can not maintain a suit for specific enforcement of the contract, under Rev. Stat, of Idaho, Sec. 4090, which provides that every action must be prosecuted in the name of the real party in interest, with certain exceptions, none of which covers such case. Lawyer v. Post, 109 Fed. 512, 47 C. C. A. 491.
A complaint which alleges that defendant employed plaintiff to procure within a specified time, "an acceptance of a certain application made by defendant for a loan," and that, within the time, plaintiff procured a third person "to accept said application," sufficiently alleges that defendant was notified of the acceptance, though it does not allege that the determination of the third person was communicated to the defendant, which must be proved to justify a recovery. Morton v. Petit, 117 N. Y. S. 364.
The broker described in a contract for an exchange of lands, which provides that each party shall pay a broker's commission of a stated amount, may sue thereon, though he has not signed it. Hutton v. Stewart, 135 P. 681, 90 Kan. 602.
A broker, to recover commissions under contract entered into in behalf of his principal, must allege and prove either that the owner or purchaser refused to comply, and that the purchaser on refusal was solvent, or that the question of solvency had been waived. Harvil v. Wilson Bros., 74 S. E. 845, 11 Ga. App. 156.
A complaint, in an action by a broker for commissions on a sale, which alleges that plaintiff contracted to act as agent, that defendant should pay for the services ten per cent. on the sales made through plaintiff's agency, and that plaintiff made a sale of real estate for $1,000 and was entitled to a ten per cent. commission, states a cause of action for a ten per cent. commission on such sale, as against a demurrer. Kupfrain Park Co. v. Run-cie, 96 N. E. 626, 49 Ind. App. 32.
That a broker, in making a sale of land on commission, for which he brings action, at the instance of the owners procured a loan on the property, without which the purchaser would not buy, being a mere incident of the sale, may be shown by him without being pleaded in the complaint. American Trust Go. v. Goode, 83 S. E. 550, 167 N. C. 338
In a suit for earnest money deposited with broker to bind agreement to buy plaintiff's property, the depositary against whom plaintiff sought forfeiture, after a money judgment, was not a necessary party defendant. Moloney v. Aschafenburg, 78 S. 761, - La. Sup. - .
Broker employed to sell property and who closes agreement for its sale, becomes under Rev. Civil Code, art. 3016, the agent of both seller and purchaser, and where purchaser deposits earnest money seller can not sue broker to recover it, without making purchaser a party to such suit. Id.
Where plaintiff, suing for procuring a lessee, failed to establish any meeting of minds of defendant and lessee in making a valid agreement on terms on which plaintiff testified defendant's agent authorized him to lease, plaintiff failed to make a cause of action. Eckstein v. Youngs Mill Corporation, 172 N. Y. Sup. 354.
 
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