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.
A real estate broker employed to find a purchaser of land at a designated price, under an agreement whereby the owner is to furnish a perfect abstract of title on a deposit of ten per cent. of the price by the purchaser has earned his commissions when he produces a purchaser willing to buy on the prescribed terms, and where the owner afterwards induces his title to be rejected for the purpose of defeating the sale, the broker's return of the deposit in compliance with the contract of sale, though without the owner's knowledge, does not affect his right to his commission. Phelps v. Preuesch, 88 Cal. 626, 23 P. 1111. A real estate broker acting for a vendor is entitled, in the absence of a contract to the contrary, to a commission on a deposit made by the prospective purchaser and forfeited by him. Pierce v. Powell, 57 I11. 323; Gilder v. Davis, 137 N. Y. 504, 33 N. B. 590, 20 L. R. A. 398; Bowersox v. Hall, 73 Kan. 99, 84 P. 557.
See also Secs. 470, 570, 506.
Under a contract of sale requiring earnest money payment to be placed in escrow until title was approved, check by broker was deposited; held, sufficient deposit if drawn on a fund on which he had the right to draw a check, and that it was a payment of the amount thereof. Henderson & Grant v. Gilbert, 171 S. W. 304, - Tex. Civ. App. - .
A broker's receipt for earnest money reciting payment of $1,000 as earnest of purchaser's intention to purchase real estate described at the agreed price of $45,000, balance payable, cash on delivery of clear deed and abstract, purchaser to pay taxes, assessments and costs, and in case of failure to forfeit deposit money, signed by owner only, by the broker as agent, was not an enforceable contract of sale sufficient to constitute performance of the broker's contract of employment. Henry v. Harker, 118 P. 205, 61 Or. 276, judg. aff. on re., 122 P. 298, 61 Or. 276.
Release of both parties to a contract for a sale of land secured by plaintiffs as brokers, which contract had never become effective by reason of the buyer's failure to deposit earnest money required as a condition precedent thereto; the contract of release did not so affect the broker's rights as entitled them to recover commissions. Oswald Realty Co. v. Broussard, 159 S. W. 385, - Tex. Civ. App. - .
Where a contract between intending purchaser and brokers provided for refunding of the earnest money if the title should not be perfect, and for forfeiture to the seller if the purchaser failed to comply with the terms of sale, and that the sale was subject to the approval of the owner, and that it would be approved within ten days or the earnest money refunded. The owner, on executing the contract, became entitled to the earnest money payment constituting part of the price, and the purchaser could not thereafter recover such payment from the brokers, whether he knew prior to such approval or not, and whether the brokers were his agents or the owner's agents. Massey v. Butts, 221 S. W. 153, - Mo. App. - .
 
Continue to: