An agent may demand his compensation when he has earned it according to his contract. He may work contingently, as for a commission, or his right may be absolute.
In the law of contract we learn that a contract will be implied from circumstances in which (there being nothing express to the contrary) the only reasonable explanation is a contractual basis, as where a stranger works for another; but if another explanation is more reasonable, as where a son works for his father, there is no contract, unless an agreement be shown.36
36. Hodge v. Hodge, 91 Pac. (Wash.) 764, 11 L. R. A. (N. S.) 873.
An agent earns his compensation when he accomplishes what he undertook.
(a) Cases in which the real estate broker was authorized to find a purchaser upon certain terms, and finds one upon those terms who is ready, willing and able to buy. There he has accomplished all he set out to do, and the seller cannot deny his right by refusing to consummate the sale, or by dismissing the broker and consummating it himself, or through another broker.37
(b) Cases in which the broker is requested merely to find a purchaser, terms not being stated. Frequently an owner will merely list his property for sale, expecting to negotiate later. In such a case the broker is entitled to no fee until a contract is made, or a sale is made.38
If a sale is made in such a case, or even a contract which the buyer or seller will not carry out, the broker is entitled to his commission.
If the principal wrongfully revokes the agency, the agent may, as in the case of any breach of contract, have his action to recover the damages he may have sustained.
If a contract is broken there arises at once an action for damages. If an agent is wrongfully discharged, he may not as yet have earned his compensation, yet he may have what his damages are found to be. There is of course, a right to discharge, if the agent has himself been guilty of a breach of the contract, and in that case the agent could not claim damages or compensation. It must also be borne in mind that there are many agencies which are for no stated period, but merely at will, and in such a case a revocation of the agent's authority might be made at any time, and no right of damages would arise; yet, as we noted in the section above, if the agent had done, or substantially done, what he set out to do before the revocation he would have earned his compensation. So there may be a revocable agency, in which one is to receive a reasonable or an expressly stated, compensation for services actually performed.
37. Fox v. Ryan, 240 111. 391.
38. Fox v. Ryan, supra.
Assuming, however, that the authority is wrongfully revoked, and that the compensation agreed upon has not been earned before the revocation, the agent is left to his action for damages. This is quite a different matter from his right when he has earned his compensation. For instance, if I employ a man for a year, he may sue me for the year's salary if he works for the year, but if I discharge him on the first day of the year, then he has earned no salary, yet he may have his damages, and this might be small or large, or none at all, according to the actual circumstances.
It is said that an agent wrongfully discharged has three remedies he may choose among:
(1) He may sue for the value of the services already rendered;
(2) He may sue at any time after breach and have his damages which he has sustained up to that time;
(3) He may wait until the term has elapsed and sue for all the damages actually sustained by him.
Then suppose P has employed A for one year. A has worked one month when he is wrongfully discharged by P. He may thereupon sue for the reasonable value of one month's services; or any time after the month and before the year has elapsed he may sue for his damages sustained by him up to the time of trial; or he may wait until the year has entirely elapsed and have all the damages which the breach caused him. He could not sue for his earnings (salary or wages) alleged to accrue after he was discharged. Thus at the end of the second month, he could not sue for the second month's salary, although it would under the contract then have fallen due, for he has not been in P's service. But he can only sue for his damages, which might be much less than his salary or wages because he might have employment elsewhere. And having once sued for his damages he could not sue again. Thus if he sues at the end of the second month, he could not sue at the end of the third for damages accruing during the third. For there is but one breach of the contract and he can have only one suit for that breach.39
In a suit for damages, such damages are allowed as have accrued up to the time of the trial. It is the agent's duty upon discharge to use reasonable efforts to secure other employment along the same lines, and if he refuses to accept employment offered him or which he might well have secured, his damages are reduced by what he thus might have earned during the period.
What has been said has no reference to an agent's right to sue for his salary as it falls due when he is not discharged. Thus he might bring suit at the end of every month for his month's salary when he continued in the service.
39. Doherty v. Shipper & Block, 250 111. 128.
If a contract of agency is separable into independent parts, the agent may recover for the performance of any part, but his breach of any part of an entire and indivisible contract bars him from any recovery whatever, except that in some states, he is allowed to recover a reasonable compensation for beneficial services actually rendered as on a quasi contract.
If a contract is really many contracts in one, a breach of one of these is no breach of the others. It has been held that if one is employed by the month, with salary payable at the end of the month, for an indefinite period, he may recover any month's salary notwithstanding his subsequent breach,40 but in that case the principal could set off his damages, if any, caused by the subsequent breach. On the other hand, if an agent is employed for a year, with salary payable monthly, this is usually held an entire contract and if the agent breaks the contract before the expiration of the year he will be held to have broken all parts of the contract and have no right to recover.
Some decisions41 have allowed an agent in the case of such a breach to recover as on an implied contract for the actual worth of the services rendered to the principal or master. This seems the more just rule, though in strict theory the rule that one who breaks a contract shall have no right thereon is more logical, and that is the rule in many states.42
40. Robertson v. Jenner, 15 L. T. (N. S.) 514.
41. Britton v. Turner, 6 N. H. 481 Mechem, Agency, 2nd Ed. SEC. 1578.
42. Stark v. Parker, 2 Pick. (Mass.) 267.
Where the agent through sickness or other cause, not from his own fault, quits the service, he may have reasonable compensation.
If an agent or servant has under a contract of employment performed a part of the services, and then is compelled to abandon the employment through sickness, or through any other cause that operates to prevent him from continuing, he may sue to have his reasonable compensation for the services actually performed.43
43. Fenton v. Clark, 11 Vt. 557.