Sec. 219. Compensation In Absence Of Agreement

"Where a broker has been employed and no rate or special mode of compensation has been agreed on, the customary rate forms the proper rule of value for his services."17 Under such circumstances he is entitled to a reasonable compensation, evidence of which is the usual and customary charge for making such sale.18

It is not unusual for brokers to say nothing at all about the amount of their compensation when the property is placed with them for the purpose of selling or renting it. In such case, unless a fixed compensation is subsequently agreed upon, the broker relies on recovering the "customary" compensation. This customary rate may vary in different localities.19 Where no price is fixed and the broker is merely instructed to get an offer, the implied agreement is that the owner will pay commissions upon the sale price in the event the owner agrees upon a figure and sells to some person introduced by the broker.20

But it seems that in an exchange where the values of both properties have been purposely inflated, the broker's percentage should be based on the real value of the property.21

16 Reams v. Wilson, 147 N. C. 305 (1908), (citing Reed v. Reed, 82 Pa. St. 420; Ptaelan v. Gardner, 43 Cal. 306; Doty v. Miller. 43 Barb. 529; Bailey v. Chapman, 41 Mo. 537; Monroe v. Snow, 131 111. 136; Brackenridge v. Claridge, 43 L. R. A. 593).

17 Erben v. Lorillard, 2 Keyes 572 (N. Y. Court of Appeals, 1866) ; Monroe v. Snow, 131 111. 136 (1890).

18 Jones v. Moore, 30 Ky. Law Rep. 605 (1907).

19 See Schedules of Rates, Forms 1-16 infra, Part VIII.

20 Martin v. Fegan, 95 App. Div. 157 (N. Y. 1904).

Sec. 220. Custom As Part Of The Agreement

Parties are presumed to contract in reference to the custom or usage of the particular place or trade in or as to which they enter into agreement, when the custom or usage is so far established, and so far known to the parties that it must be supposed that their contract was made in reference to it.22

"Custom or usage relating to a particular business in order to be available for the purpose of determining the rights of the parties must be uniform, notorious and reasonable." 23 Every legal contract is to be interpreted in accordance with the intention of the parties making it. A custom or usage when it is reasonable, uniform, well settled, not in opposition to fixed rules of law, not in contradiction of the express terms of the contract, is generally deemed to form a part of the contract, and to enter into the intention of the parties.24

In Heistand v. Bateman, 41 Colo. 23 (1907), it was said: "Evidence of custom may be resorted to for the purpose of ascertaining the meaning and intent of parties to a contract where the terms employed are general in their nature. Experience has taught that men of affairs, in making contracts, are not always careful to express themselves with completeness and particularity, and that in dealing with one another, they leave part of their intention unexpressed, in silent reliance on the usages mutually understood, to enter into and form a part of their agreement.25 Hence, it follows, that when such a Contract becomes the subject of litigation, the presumption is indulged, if the parties have not expressed a contrary intention, that they intended to incorporate therein a usage known to them, and evidence of such is admissible, not to vary or contradict the terms of the contract, but to interpret it, as it was understood by the parties at the time it was made."26

21 Porter v. Helllngsworth, 30 Misc. 628 (N. Y. 1900); 62 N. Y. Suppl. 796.

22-Walls v. Bailey, 49 N. Y. 469 (1872); Steidtmann v. Lay Co., 234 111. 84 (1908).

23 Heistand v. Bateman, 41 Colo. 22 (1907), (citing Savage v. Pelton, 1 Colo. App. 148; Leach v. Perkins, 17 Me. 462).

24 Walls v. Bailey, 49 N. Y. 469 (1872).

25 Citing 29 Am. & Eng. Enc. Law (2d Ed.), 422.

A custom that where brokers negotiate a lease the owner pays the commission, cannot fasten upon a property owner any liability as the employer of a broker simply because he consents to rent his property to some one who is induced to lease it through the agency of the broker without any request, express or implied, on the part of the owner.27

A custom between brokers to divide commissions, gives no right of recovery in the absence of an agreement to divide or of facts from which such agreement may be implied.28