§ 427. A broker is an agent who is employed to negotiate sales between the parties for a compensation in the form of a commission, which is commonly called brokerage.1 In the proper exercise of his functions, he does not act in his own name, but only as a middle-man.2 His business consists in negotiating exchanges; or in buying and selling stocks, and goods, or ships, or cargoes; or in procuring insurances and settling losses; and, according as he confines himself to the one or other of these branches, he is called an exchange-broker, a stock-broker, a merchandise-broker, a ship-broker, or an insurance-broker.3 A broker diners materially from a factor.

1 See Smith v. Lindo, 4 C. B. (n. s.) 395 (1858).

2 Among the Romans was a class of persons called Proxenetae, not differing much from a broker in their functions, and receiving also a compensation for negotiating a sale. "Sunt enim hujusinodi hominum, ut tam in magna civitate, officinae. Est enim Proxenetarum modus, qui emptionibus, venditionibus, commerciis, contractibus licitis utiles, non adeo improbabili, more se exhibent. (Dig. Lib. 50, tit. 14, 1. 3.) Proxenetica jure licito petuntur. Si Proxeneta intervenerit faciendi nominis, ut multi solent, vid-eamus an possit quasi mandator teneri? Et non puto teneri. Quia hie monstrat magis nomen quam mandat, tametsi laudet nomen." Dig. Lib. 50, tit. 14, 1. 1, 2. Domat also gives a full description of a broker according to our law. He says: "The engagement of a broker is like to that of a proxy, factor, and other agent; but with this difference, that the broker being employed by persons who have opposite interests to manage, he is, as it were, agent both for the one and the other, to negotiate the commerce and affair in which he concerns himself. Thus his engagement is twofold, and consists in being faithful to all the parties, in the execution of what every one of them intrusts them with. And his power is not to treat, but to explain the intention of both parties, and to negotiate in such a manner as to put those who employ him in a condition to treat together personally."

3 Story on Agency, § 32; 2 Kent, Comm. lect. 41, p. 622; Pott v. Turner, 6 Bing. 702; Rawlinson v. Pearson, 5 B. & Al. 125; Highmore v, Molloy, 1 Atk. 206.

He has no possession of the goods in respect to which he negotiates a bargain, and he is not authorized to sell in his own name; nor can he sue as principal, after signing a contract-note as selling as broker for a principal not disclosed.1 While a factor, as we shall see, not only may have possession of the goods, which he sells, but he also has a special property therein, and may sell them in his own name.2 A person may, however, unite in himself the double character of broker and factor, for there is no legal objection to his so doing; but his duties and liabilities in respect to each character are none the less different,3 and they should be carefully distinguished. For example, it is not the business of a person acting as broker to see to the delivery of the goods sold, but it may become his duty to do so, if he also act in the capacity of factor.1 So, also, he cannot, as broker, sue2 or sell in his own name, but, as factor, he may.3

1 Sharman v. Brandt, Law It. 6 Q. B. 720. See Fairlie v. Fenton, Law R. 5 Exch. 169.

2 Baring v. Corrie, 2 B. & Al. 137, 148; Pott v. Turner, 6 Bing. 702; Hearshy v. Hichox, 7 English, 125. In Baring v. Corrie, Mr. Justice Holroyd said: "A factor, who has the possession of goods, differs materially from a broker. The former is a person to whom goods are sent or consigned, and he has not only the possession, but in consequence of its being usual to advance money upon them, has also a special property in them, and a general lien upon them. When, therefore, he sells in his own name, it is within the scope of his authority, and it may be right, therefore, that the principal should be bound by the consequences of such sale; amongst which the right of setting off a debt due from the factor is one. But the case of a broker is different; he has not the possession of the goods, and so the vendee cannot be deceived by that circumstance; and, besides, the employing of a person to sell goods as a broker does not authorize him to sell in his own name. If, therefore, he sells in his own name, he acts beyond the scope of his authority, and his principal is not bound. But it is said that, by these means, the broker would be enabled by his principal to deceive innocent persons. The answer, however, is obvious, that that cannot be so, unless the principal delivers over to him the possession and indicia of property. The rule stated in the case in Salkeld must be taken with some qualifications; as, for instance, if a factor, even with goods in his possession, acts beyond the scope of his authority, and pledges them, the principal is not bound; or if a broker, having goods delivered to him, is desired not to sell them, and sells them, but not in market overt, the principal may recover them back. The truth is, that in all cases, excepting where goods as sold in market overt, the rule of caveat emptor applies. I think, therefore, that this case differs materially from the cases cited, which are those of principal and factor, and that therefore this claim of set-off cannot be allowed."

3 1 Bell Comm. B. 3, pt. 1, ch. 4, art. 409, p. 386, 4th ed.; ib. p. 477, 478, 5th ed.; Brown v. Boorman, 11 Cl. & Finn. 1, 44; Story on Agency, § 32 a.

§ 428. In respect to the commission of a broker, the rule is, that he has earned his commission when he has procured a party with whom his principal is satisfied; 4 though the bargain be not consummated.5 But he is not entitled to it, nor even to a compensation for his trouble, if he execute his duties so bunglingly that no benefit results from them.6 Nor is he entitled to a commission, where he has been guilty of gross misconduct in selling goods.7 So, also, if the negotiation be broken off by the broker,8 and the contract be not completed, the broker will not be entitled to recover commissions. So, if the broker's commission depend on custom, he must prove the usage clearly; and this, too, though the negotiations be broken off without his fault.9 But, where a negotiation is commenced by the broker, the parties cannot afterwards, by agreement between themselves, withdraw the matter from his hands, and deprive him of his commission, but he will be entitled thereto, provided he was, up to a certain time, the middle-man, although the. contract be afterwards completed without his instrumentality.1 A broker employed to purchase real estate earns his commissions when he has in good faith brought to his employer a vendor who makes a written contract with the vendee for the sale, although such vendor is unable to carry out his contract by giving a good title.2 And he is entitled to his commissions if he successfully negotiates an exchange of property put into his hands for sale3