A broker is not entitled to a commission for procuring a party who enters into an option which gives him the right to purchase but does not obligate him to do so, even though a deposit is paid on such option.12 And so, if the broker merely produces a person who, without himself agreeing to buy, obtains a written agreement from the owner to sell and afterwards refuses to take title, this does not entitle the broker to commissions.13
If the purchaser enters into a contract which, as one of its conditions, reserves to him the privilege of annulling the contract under certain contingencies, there is no completed transaction.14 Where the proposed purchaser insists on a clause in the contract that in case he rejects title on account of encroachments, which would not otherwise constitute ground of rejection, his deposit shall be returned, the broker is not entitled to commissions, as the contract is thus rendered a mere option.15
If the broker is employed by a prospective purchaser to obtain an option, the above rule does not, of course, apply, and the broker is entitled to compensation for his services if he accomplishes the object of his employment.16
12 Milstein v. Doring, 102 App. Div. 349 (N. T. 1905); Runck v. Dimmick. Ill S. W. 779 (Tex. 1908) ; Wilson v. Ellis, 106 S. W. 1152 (Tex. 1908) ; Block v. Ryan. 4 App. Cas. D. C. 283 (1894). See also Lawrence v. Rhodes, 188 111. 100 (1900). where are cited Aigler v. Carpenter Co., 51 Kans. 718; Kimberley v. Henderson, 29 Md. 512; Zeidler v. Walker, 41 Mo. App. 118; Dwyer v. Raborn, 6 Wash. 213. And see Sec. 103, 351 infra.
13 Kampf v. Dreyer, 119 App. Div. 134 (N. Y. 1907) ; Runck v. Dimmick, supra.
14 Crockett v. Grayson, 98 Va. 354 (1900). See also Ch. XV, "Transaction Must be Complete."
15 Hough v. Baldwin, 53 Misc. 284 (N. Y. 1907).
Wilful, arbitrary, capricious or fraudulent refusal of the vendor to sell when a purchaser is produced, does not deprive the broker of his right to commissions.17 " The production of a responsible purchaser on terms which are satisfactory to the employer at the time the contract of brokerage is entered into, is sufficient to entitle the broker to his commissions, and he cannot be deprived of his right to them by a mere change of mind on the part of the vendor."18
But where there is no time fixed, the vendor, before his proposition is accepted, may change his mind and withdraw his proposition if he does it in good faith.19
The broker must produce the purchaser to his principal. The principal is entitled to know who the proposed purchaser is and with whom he is expected to enter into a contract, and as long as there is uncertainty as to the purchaser the broker cannot claim performance of his contract and demand his compensation.20 But it is held in Young v. Ruhwedel, 119 Mo. App. 242 (1906) that the production by the broker of a contract of purchase signed by the purchaser is legally equivalent to the production of the purchaser himself.
The true identity of the purchaser may be sometimes a material fact which ought to he known to the principal, since such knowledge might affect his action.21 "Obviously a broker cannot keep his customer in the dark and allow him (the principal) to fall into the trap of agreeing to pay another broker, or of taking a less price for the property in the belief that no commissions are to be paid, and then recover his commission." 22
16 See Boardman v. Hanks, 185 Mass. 555 (1904).
17 Flower v. Davidson, 44 Minn. 48 (1890).
18 Martin v. Werman. 107 App. Div. 482 (N. Y. 1905). See also SIbbald v Beth-letaem Iron Co.. 83 N. Y. 378 (1880): Hancock v. Stacy. 116 S. W. 177 (Tex. 1990).
19 Arthur v. Porter, 118 S. W. 611 (Tex. 1909). See also "Time of Performance. Sec. 138 supra.
20 Gerdlng v. Haskln, 141 N. Y. 514 (1894).
Where the broker misleads his principal and gives him a false name as that of the prospective buyer, the principal is not liable to the broker for commission if he sells, either directly or through another broker to the very customer who was in fact the customer of the broker, but whose real identity was concealed.23