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.
If a broker is guilty of fraud in executing his agency his right to commissions is forfeited. Jeffries v. Bobbins, 66 Kan. 427, 71 P. 852; Kurinsky v. Lynch (Mass. Sup. '09), 87 N. E. 70; Krhut v. Phares, 80 Kan. 515, 103 P. 117; Whaples v. Fahy, 87 N. Y. App. Div. 518, 84 N. Y. S. 793; De Armet v. Milner, 20 Pa. Super. Ct. 369; Hall v. Gambrill, 92 Fed. 32, 34 C. C. A. 190; Schleifanbaum v. Rundbaken, 81 Conn. 623, 71 A. 899; Moore v. Kelley, 162 S. W. 1034, - Tex Civ. App. -; Martineau v. Hanson, 155 P. 432, 47 Utah, 549; Dean v. Roberts, 62 S. 44, 182 Ala. 221; Swaney v. Bradford, 165 N. W. 362, - Iowa Sup. -; Sutherland v. Guthrie, 103 S. E. 298, - W. Va. Sup. -; Hallman v. Lipscomb, 103 S. E. 513, - S. C. Sup. - .
In one case it was held that a broker employed to find a buyer is guilty of fraud when he seeks to induce the principal to reduce the price. Hobart v. Shelburne, 66 Minn. 171, 68 N. W. 841. Contra, Gorman v. Hayes, 6 Okla. 360, 50 P. 92. See also Secs. 290, 291, 1046a. A broker may be deprived of his right to commissions by the fraudulent conduct or misrepresentations of third persons in privity with him. Thwing v. Clifford, 136 Mass. 482. If a broker conceals the purchaser's name and puts forward a fictitious purchaser, it constitutes a fraud in law, and deprives him of his right to commissions for procuring a buyer. Pratt v. Patterson, 12 Phila. (Pa.), 460, 112 Pa. St. 475.
A broker who acts secretly for both parties to an exchange, purchase, sale or lease of property is guilty of fraud which deprives him of the right to recover commissions from either party. Tigarder v. Big Stone Zinc Co., 71 Ark. 277, 72 S. W. 789; Deutsch v. Baxter, 9 Colo. App. 58, 47 P. 405; Hanesley v. Monroe, 103 Ga. 279, 29 S. E. 928; Van Vlissingen v. Blum, 92 I11. App. 145; Hampton v. Lackens, 72 I11. App. 442; Boyd v. Dillingham, 33 I11. App. 266; Simonds v. Hoover, 35 Ind. 412; Blake v. Stump, 73 Md. 160, 20 A. 788, 10 L. R. A. 103; Rice v. Wood, 113 Mass. 133; Walker v. Osgood, 98 Mass. 348; Farnsworth v. Hemmer, 1 Allen (Mass.), 494; Rosenthal v. Drake, 82 Mo. App. 358; Chapman v. Currie, 51 Mo. App. 40; Strowbridge v. Swan, 43 Neb. 281, 62 N. W. 199; Campbell v. Baxter, 41 Neb. 729, 60 N. W. 90; Robinson v. Clock, 55 N. Y. S. 976, 38 App. Div. 67; Southack v. Lane, 65 N. Y. S. 629, 32 Misc. 141; Perkins v. Brainerd Quarry Co., 32 N. Y. S. 230, 11 Misc. 328; Platt v. Baldwin, 2 N. Y. City Ct. 281; Capener v. Hogan, 40 O. St. 203; Hann v. Bretler, 107 N. Y. S. 78; Bell v. McConnell, 37 O. St. 396; Council v. Smith, 142 Pa. St. 25, 21 A. 793, 12 L. R. A. 395; Lynch v. Falter, 11 R. I. 311; Armstrong v. O'Brien, 83 Tex. 635, 19 S. W. 268; Shepard v. Hill, 6 Wash. 605, 34 P. 159; Meyer v. Hanchett, 39 Wis. 419: Bellin v. Wein, 104 N. Y. S. 360; Cook v. Schaffrean. 102 N. E. 715, 215 Mass. 444; Tracey v. Blake, 118 N. E. 271, 229 Mass. 57. Mechem on Ag., Secs. 37, 38.
Unless the principals knew of the duplicate agency and consented thereto or acquiesced therein. Hanesley v. Monroe, 103 Ga. 279, 29 S. E. 928; Boyd v. Dillingham, 33 I11. App. 266; Gann v. Zetler, 3 Ga. App. 589, 60 S. E. 283; Rice v. Wood, 113 Mass 133; Walker v. Osgood, 98 Mass. 348; Farnsworth v. Hemmer, 1 Allen (Mass.), 494; Redmund Bros. v. Hooks, 137 Iowa, 228, 114 N. W. 885; Rosenthal v. Drake, 82 Mo. App. 358; Chapman v. Currie, 51 Mo. App. 40; Strowbridge v. Swan, 43 Neb. 781, 62 N. W. 199; Dennison v. Gault, 132 Mo. App. 301, 111 S. W. 844; Campbell v. Baxter, 41 Neb. 729, 60 N. W. 90; Lansing v. Bliss, 33 N. Y. S. 310, 86 Hun,
205; Bonwell v. Auld, 27 N. Y. S. 936, affirmed 29 N. Y. S. 15, 9 Misc. 65; Bonwell v. Howes, 1 N. Y. S. 435; Bellin v. Wein, 104 N. Y. S. 360; Platt v. Baldwin, 2 N. Y. City Ct. 281; Willner v. Scale, 111 N. Y. S. 699, 127 A. D. 180; Ca-pener v. Hogan, 40 0. St. 203; Bell v. McConnell, 37 0. St 396; Evans v. Rockett, 32 Pa. Super. Ct. 365; Connell v.
Smith, 142 Pa. St. 25, 21 A. 793, 12 L. E. A. 395; Sullivan v. Tufts (Mass. Sup. '09), 89 N. E. 239; Lynch v. Fatter, 11 E. I. 311; Meyer v. Hanchett, 39 Wis. 419; Selevar v. Isle Harbor Ld Co., 91 Minn. 451, 98 N. W. 344; Lakin v. Nordyke, 66 Iowa, 471; Red Cypress Lumber Co. v. Perry, 118 Ga. 876, 45 S. E. 674; Berry v. Schmidt, 57 N. W. 172; Zimmerman v. Garvey, 81 Conn. 570, 71 A. 780; Arthur v. Porter (Tex. Civ. App. '09), 116 S. W. 127; Grasinger v. Lucas (S. D. Sup. '09), 123 N. W. 77; Lipscomb v. Mastin (Mo. App. '10), 125 S. W. 1177.
If a broker has an individual interest in the transaction he is employed to negotiate, and fails to disclose the fact to the principal, this constitutes a fraud which deprives him of the right to compensation for his services. Collins v. McClurg, 1 Colo. App. 348, 29 P. 299; Jeffries v. Robbins, 66 Kan. 427, 71 P. 852; Buck v. Hozeboom (Neb. Sup. '02), 90 N. W. 635; Ryan v. Kahler (Tex. Civ. App. '98), 46 S. W. 71; DeL'-Archerie v. Rutherford (Wash. '09), 102 P. 1033; Forbes v. Davis, 200 I11. App. 378. If a broker in negotiating a contract practices fraud on the owner, and the other party is privy thereto, or has knowledge thereof, the owner is not bound thereby, and it was not necessary in a suit to recover the lands that the owner should offer to restore what he had received before he could demand restitution. Healey v. Martin, 68 N. Y. S. 413, 33 Misc. 236.
Where the broker for the purchaser also represents the vendor, the transaction is not binding, irrespective of actual fraud, without the intelligent consent of both parties. Ferguson v. Gooch, 94 Va. 1, 26 S. E. 397, 40 L. R. A. 234; Whitney v. Bissell, 146 P. 141, 75 Or. 28, L. E. A. 1915 D, 257.
Where defendant contracted for a sale of land through a Teal estate agent, and subsequently received a payment of interest which the agent had received from the vendee, but she had not left the contract with him nor authorized him to collect; subsequently she sold to the agent her interest in the contract, and he sold said interest to the plaintiff, who paid the agent therefor, and at the agent's instance defendant made a deed to plaintiff, and subsequently, at the instance of the agent, gave a deed to the original vendee; such vendee had made full payment to the agent, but he had not paid the money over to defendant; two witnesses testified that defendant acknowledged drawing the contract and deed to the original vendee, and that the agent had acted for her. Held, that there was no evidence to show that the real estate agent in receiving payment from the vendee after such agent had bought the contract from defendant received it as her agent, so that plaintiff could recover from defendant on the money counts as for money received to plaintiff's use. Rhode v. Marquis, 135 Mich. 48, 97 N. W. 53. Compare Frank v. Levy, 10 Ohio Cir. Ct. E. 554.
 
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