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.
Where a vendor employs a broker to effect a sale of land, and, relying wholly on the broker does not exercise his own judgment as to the responsibility of a purchaser found and presented by the broker, but signs a contract of sale, which the purchaser is unable to carry out, the broker is not entitled to compensation. Butler v. Baker, 17 R. I. 582, 23 A. 1019. Compare Wray v. Carpenter, 16 Colo. 271, 27 P. 248; Wright v. Brown, 68 Mo. App. 577; Brady v. Foster, 75 N. Y. S. 994. 72 App. Div. 416. See also Sec. 464.
If a broker releases his right to a commission in consideration that the principal would give him further business, the principal's failure to keep his promise does not entitle the broker to recover the original renounced commission; his remedy, if any, is an action on the promise. Lindt v. Schlitz Brewing Co., 113 Iowa, 200, 84 N. W. 1059. See also See. 1073.
A real estate broker's contract for commissions for the sale of land which provides that "when said land is sold" he shall have a certain per cent. of the price out of the first money collected, but which fails to give him exclusive authority to sell, does not entitle him to such commission on a sale made by the owner himself. Tracey v. Abney, 122 Iowa, 306, 98 N. W. 121.
Defendant agreed to pay plaintiff certain compensation to sell his farm for $20,000, to be paid as follows: First mortgage $5,000, second mortgage $2,500, the balance to defendant in cash; the mortgages were made to secure bonds of defendant. Held, that plaintiff did not earn the compensation by the tender of a contract whereby the purchaser agreed to pay that portion of the price represented by the mortgages, "by assuming" these mortgages, in the absence of evidence that the mortgages were not due and could not be paid. Schultz v. Griffin, 24 N. E. 480, 121 N. Y. 294. See references under Sec. 307.
Where one authorized to sell certain property within a specified time, he to have a certain amount for procuring a purchaser or making a sale, notifies the owner within the time that he has secured a proposition on certain terms, at the price fixed, and the proposition is not accepted, he can not recover the agreed compensation, the customer being one with whom the owners had themselves been in treaty for the property for several months prior thereto, and who had that day made them an offer of the same amount. Hartley v. Anderson, 150 Pa. St. 391, 24 A. 675. See also Secs. 19, 21, 169, 454.
Plaintiff claimed that defendant authorized him to sell a ten-acre tract for $17,000, and that he obtained a purchaser at that price. In an action for the commissions, plaintiff's alleged purchaser testified that plaintiff offered him the land at that price; that he told plaintiff that he would take it, and to get an option on the property; when plaintiff returned and told him that defendant would sell only about nine acres, he told plaintiff to get an option on the best terms he could and he would consider it; an option was obtained on the nine acres but never accepted. Defendant's reason for not selling over nine acres was, that he wanted the balance for a street. "Witness testified that he thought defendant intended putting a street through, and that he wanted the option to see if defendant would insist on it. Witness testified that he intended to take the land if he got the whole ten acres for the price named. Held, that a verdict should have been directed for defendant, on the ground that plaintiff did not obtain a purchaser. Hannan v. Fisher, 82 Mich. 208, 46 N. W. 225. See Sec. 33.
A provision in a contract employing a broker to procure a purchaser before a certain date, of real estate, stipulated that if the premises were sold after such date on information from him he should receive commissions. The premises were sold subsequent to such date through other brokers for a less price. The purchaser learned that the property was for sale from the owner's attorney advertising the same. There was nothing to show that the broker started the negotiations between the purchaser and owner, nor was there anything to show bad faith on the part of the owner. Held, that the broker was not entitled to commissions. Shipmen v. Wilkeson, 112 N. Y. S. 895.
A real estate broker who expressly contracts to sell and convey for cash is not entitled to commissions by merely securing a competent person for the purchase of the land. Burnett v. Botts, 143 I11. App. 160, affirmed 86 N. E. 258. See Sec. 449.
The mere fact that real estate was sold to the person to whom a broker employed to procure a purchaser had five or six months previous to the sale given the information, without informing the owner or doing anything further to effect a sale, was not sufficient to entitle the broker to commissions. Waters v. Ra-falsky, 119 N. Y. S. 271. See Secs. 360, 471, 489.
Where a real estate broker, who had been authorized to sell the timber of a tract of land merely informed the purchaser who had been negotiating with the owners for some time in regard to purchasing the land, that he had the land for sale, but did nothing further, and knew nothing of the subsequent negotiation which led up to the sale, which was not made until the vendor agreed that a mill and the down timber would be included, and also agreed to the purchaser's terms as to time of payment, the broker was not the efficient agent in or the procuring cause of the contract so as to entitle him to commissions. Goff v. Hurst (Ky. Ct. App. '09), 122 S. W. 148.
Broker held not entitled to commissions for effecting parties to consider an exchange, where they refused to sign the contract therefor. Reynolds v. Toch, 121 N. Y. S. 85.
Defendant authorized plaintiff to sell certain property for her at $40,000. The best offer plaintiff obtained was $38,000, and the property was subsequently sold by a third person for $39,000. Held, that plaintiff did not produce a party willing, ready and able to purchase on defendant's terms, and could not therefore claim commissions. Senior v. Fitzgerald, 119 N. Y. S. 745. See also Sec. 426.
A broker's commission was not earned on the theory that they had procured a binding contract, where it was not susceptible of specific performance, because providing that on non-performance the buyer should be subject to a forfeiture of the deposit. Oswald Realty Co. v. Brouseard, 159 S. W. 153, - Tex. Civ. App. -; Simpson v. Eardley, 137 S. W. 378, - Tex. Civ. App. - .
Where in a contract of exchange one of the parties agrees to pay broker who is not a party thereto a commission, he may, if deal is not consummated because the other can not convey a good title, rescind the contract, and is thereby relieved of liability to pay commission. Brion v. Cahill, 165 P. 704, - Cal. App. - .
A broker whose right to sell is limited to a specific time, and who effects no sale within that time, is not entitled to a commission, though the owner later sells to the one with whom the broker has been negotiating, provided the owner does not fraudulently terminate the contract or prevent a sale by the broker. Langer v. Aycock, 209 S. W. 199, - Tex. Civ. App. - .
 
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