"It is not per se unlawful for one to act as the broker for the buyer and seller without disclosing the fact. The broker may be a mere middleman. It is only when his employment is that of an agent with discretionaiy authority from his principal in the matter of such employment that he cannot accept payment from another whose interests conflict with those of the first principal."16
As stated, a broker employed to buy or sell, who is vested with any discretion, or upon whom his employer has a right to rely for the benefit of his skill or judgment, loses his right to compensation if he agrees to act in a similar capacity for the other party, but this does not apply to one simply employed to bring the parties together.17
13 Bonwell v. Auld, 9 Misc. 65 (N. T. 1894). See Sec. 67, 109-112 infra.
14 Geery v. Pollock, 16 App. Div. 321 (N. Y. 1897). See also Sec.51 supra.
15 Evans v. Rockett, 32 Pa. Super. Ct. 365 (1907).
16 Pollatschek v. Goodwin. 17 Misc. 591 (N. Y. 1896); M'Lure v. Luke, 154 Fed. Rep. 650 (1907), (citing Farnsworth v. Hemmer. 1 Allen (Mass.) 494; 79 Am. Dec. 756; Rupp v. Sampson, 16 Gray (Mass.) 401; Knauss v. Krueger Brewg. Co., 142 N. Y. 75; Empire St. Ins. Co. v. American Central Ins. Co., 138 N. Y. 449) ; Clark v. Allen, 125 Cal. 278 (1899), (citing Manders v. Craft, 3 Colo. App. 239).
"A broker who is employed to sell property, and whose duty it is not only to find a purchaser but to negotiate the sale, cannot accept any compensation from any other person than his employer; and if he does make an agreement to be paid by the purchaser, or if he assume a position with reference to the transaction where his duty and interest might clash, he loses all right to his commissions from his employer. But that rule applies only to a case where the duty of the broker to his employer calls for the exercise of his judgment or discretion, when he must confine himself to acting for the person who employed him, and look solely to him for his reward. But when he is employed simply to find a purchaser upon terms fixed by his employer, his duty is performed by bringing to the seller one who is willing to purchase upon such terms. He has no discretion to exercise, and there is no reason why he should not be permitted to take from the purchaser such compensation as he may see fit to give for the benefit he has received by being informed of the fact that he would be able to make such a purchase."18
Where one acts as a middleman, merely bringing vendor and vendee together to make their own contract without aid, advice or interference to or on behalf of either, he may obtain compensation from both, even without knowledge of one of such arrangement with the other.19 The court in Harten v. Loftier, 31 App. D. C.
17 Knauss v. Krueger Brewing Co., 142 N. Y. 70 (1894); Lamb v. Baxter, 130 N. C. 67 (1902).
18 Grnoie v. Stevens. 56 App. Div. 203 (N. Y. 1900). As to when broker's duty is performed, see Sec. 117-119 infra.
19 Harten v. Loffler, 31 App. D. C. 370 (1908), (citing Ranney v. Donovan, 78 Mich. 318, 329; 44 N. W. 276; M'Lure v. Luke, 154 Fed. 647; Manders v. Craft, 3
370 (1908) stated that whether this doctrine be sound to the full extent of want of knowledge by the respective parties it was unnecessary to inquire, as there was nothing in the facts of that case to which it could be applied.
Where the broker represents the purchaser and is to be paid by him, and he asks no commission from the vendor until after the vendor has accepted the offer submitted by the vendee, but the vendor then promises to pay a commission, the interests of the vendee are not affected by the commission from the vendor, and the broker may recover accordingly.20
In Davis v. Weber, 46 Misc. 590 ( N.Y.1905), the owner paid the broker a commission for obtaining her tenant, and then, giving the tenant an option to purchase the property at a fixed price within a certain time, it was agreed that if the tenant exercised the option and bought, the owner was to pay the broker a commission on the sale. The tenant was later offered a price in excess of his option, and through the efforts of .the broker obtained a purchaser at still higher figures and paid the broker a commission therefor. The tenant having exercised his option, it was held that the broker was entitled to recover his commission from the owner, although he also received a commission from the tenant, since the owner, by the execution of the lease and option, had debarred herself from selling to any one but the tenant, and thereby terminated any fiduciary relations between herself and the broker.