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 broker is employed to buy real estate he is the agent of the vendee. Marsh v. Buchan, 46 N. J. Eq. 595, 22 A.
128. Where a vendor under a contract for the sale of lands, which is within the statute of frauds because not in writing, is nevertheless willing and offers to perform on his part, but the vendee refuses to fulfill and repudiates the contract, the latter is not entitled to recover any installments of purchase money paid. McKinne v. Harvie, 38 Minn. 18, 35 N. W. 668. Where an agent is authorized to sell and convey lands, and enters into a contract with the vendee, his receipts bind the principal. Peck v. Harriott, 6 Serg. & R. (Pa.) 146.
The owner of land authorized a broker to make a sale thereof, "commissions to be paid out of payments as made," and a letter in setting forth the terms of the sale provided that on default by the purchaser all prior payments should be forfeited and neither party have any claims on the other; the broker found a purchaser, who gave a deed of trust to secure the payments and subsequently defaulted; thereafter, the vendor released the vendee from his obligations and conveyed to another, and the broker sued for commissions on the entire price. Held, that the contract between the parties did not entitle the broker to commissions except on those payments actually made by the vendee. Murray v. Rickard, 103 Va. 132, 48 S. E. 871. Compare Seymour v. St. Luke's Hospital, 50 N. Y. S. 989, 28 App. Div. 119.
A vendee, defrauded by the agent of the vendor, may rescind the contract and reclaim the money paid, and if not repaid may sue the vendor in assumpsit for it, or he may sue the agent for the deceit. Kennedy v. McKay, 43 N. J. L. 288; Farris v. Wilder (Tex. Civ. App. '09), 115 S. W. 645. Where the vendee knows that the vendor is a broker, and though there is reason to believe he is selling the property for some principal, yet if he does not see fit to bind his principal by the form of the contract made, by contracting in his own name, he may become liable as a vendor. Scaling v. Knollin, 94 I11. App. 443. A broker to purchase real estate for a vendee can not call on his principal to go to the place of business of the vendor to make the contract or negotiate as to its terms. Logan v. McMullen, 4 Cal. App. 154, 87 P. 285. If the contract requires the price to be paid in cash, the purchaser must have the cash at the time available for the purpose. Neiderlander v. Starr, 50 Kan. 766, 32 P. 359; Watters v. Dancy, (S. D. Sup. '09), 122 N. W. 430. It is not sufficient that the purchaser has property from which the price might he realized by suit. Dent v. Powell, 93 Iowa, 711, 61 N. W. 1043.
If at the time of signing the contract the purchaser is ready to make the payment then due, the broker is not required to show that he has funds available to make the final payment. Levy v. Ruff, 23 N. Y. S. 1002, 4 Misc. 180. Mere insolvency of the purchaser does not defeat the broker's right to commissions where the sale contemplated being secured by a bond and deed of trust, which the purchaser is prepared to deliver. Ross v. Fickling, 11 App. Cas. (D. C.) 442. The fact that the purchaser procured was representing a concealed principal does not affect the broker's right to commissions, if the produced purchaser was able, ready and willing to buy on the terms authorized by the principal and no binding written contract of sale is required. Gellott v. Ridge, 117 Mo. 553, 23 S. W. 882.
"Where land is intrusted to a broker to sell and collect the purchase money, a purchaser is entitled to credit for payments made to the broker before the receipt by the purchaser of a notice of the withdrawal of the broker's authority. Meeker v. Mannin, 162 I11. 203, 44 N. E. 397; Lawler v. Armstrong (Wash. Sup. '09), 102 P. 775. A purchaser who makes a parol contract and repudiates it before it is reduced to writing, bars the right of the broker to recover commissions. Gilchrist v. Clarke, 86 Tenn. 583, 8 S. W. 572; Sloman v. Bodwell, 24 Neb. 790, 40 N. W. 321. A purchaser buying real estate of an agent must, at his peril, ascertain the extent of the agent's powers. Milne v. Klel, 14 A. 646, 810, 44 N. J. Eq. 378. See also Sec. 18. After concluding the contract of sale a broker may become the agent of the purchaser, when he puts money into the hands of said agent to pay for the land. Small v. Collins, 6 Houst. (Del.) 273.
A complaint in an action to recover a real estate broker's commission is not demurrable because of failure to allege that the agent disclosed to defendant the identity of the purchaser, where it does not appear that he refused to do so, or that the defendant made demand therefor, or suffered any injury from the fact of concealment. Bertleson v. Hoffman, 35 Wash. 459,
77 P. 801. A broker who conceals the name of the real purchaser, and puts forward a fictitious purchaser, commits a legal fraud and can not recover commissions. Pratt v. Patterson, 12 Phila. (Pa.) 460, 112 Pa. St. 475. An owner of real estate who offers to pay a certain sum to another if he finds a purchaser at a named price, may, nevertheless, sell the property himself, at any time before the other has acted upon the offer and secured a purchaser, and securing a party who will purchase on different terms from those proposed by the owner in his offer is not securing a purchaser within the meaning of the contract so as to entitle the broker to a commission. Darrow v. Harlow, 21 Wis. 306.
A land agent is not entitled to commissions or compensation for procuring a purchaser of a plantation, when it is shown that the intended purchaser declined to complete the contract, without fault or negligence on the part of the principal, on account of a supposed defect in the title. Blankenship v. Ryer-son, 50 Ala. 426. Where a real estate agent, for an agreed compensation, undertakes to find a purchaser satisfactory to the owner, he alone has the right to determine the consideration for which he will sell and the details governing the payments. Kilham v. Wilson, 112 Fed. 565, 50 C. C. A. 108.
 
Continue to: