Sec. 144. Broker Must Accept Largest Offer

An agent to sell stands in the place of and represents the vendor and is therefore bound to discard every feeling of friendship toward a proposed buyer, to know no self-interest, to act, as in his judgment the interests of the vendor would induce the vendor to act, if present in person instead of being present by an agent. It is his duty, of two offers, to accept the one which would most benefit his client.9 "In commenting on the relation of real estate brokers to their principals it was said in Rich v. Black et al., 173 Pa. 92, 99, that 'the relation which such agents bear is confidential and disarms the vigilance of their principals; it affords peculiar facilities for obtaining exclusive information in respect of the property entrusted to them for sale; their employment implies that they have superior advantages for making sales and that they will use every effort and means to obtain the highest price for the benefit of their principal.' See also Addison v. Wanamaker, 185 Pa. 536."10

8 See Sec. 59-71 supra, 151, 152 infra.

9 Dictum in Haydock v. Stow, 40 N. Y. 369 (1869), citing authorities. See also Plotner v. Chillson, 95 Pac. 776 (Okla. 1908); Bunn v. Keach, 214 111. 264 (1905).

"If, after receiving instructions to sell property on certain specified terms, the agent learns that other and more advantageous terms can be obtained, it is his plain duty and he is under every legal and moral obligation to communicate the facts to the principal, that he may act advisedly in the premises."11 Thus where a broker was authorized to sell for $105,000 or more, and he procured a purchaser at $105,000 when he might have procured a purchaser at $110,000, he is not entitled to recover commissions.12

Where the brokers secure a purchaser at the price asked by the seller, but, fraudulently concealing the fact that the purchaser has acceded to the terms, endeavor to beat the vendor down on the price, they cannot be said to have acted in good faith. And so it was held, even in a case where the broker finally submitted the offer originally asked for and the owner apparently accepted it but later refused to sign the contract.13 And where the broker retains part of the price he obtains, he is guilty of fraud and forfeits his commission.14

And while it may be bad faith for the broker to endeavor to get his client to pay more for the property than is really asked by the owner, yet that would not apply with the same strictness to an exchange in which the broker is acting for both parties with their knowledge, and he endeavors to have one party pay or allow more for the property he is to take in order to equalize the equities and thus bring about an exchange.15

10 Wilkinson v. McCullough. 196 Pa. St. 208. 209 (1900).

11 Holmes v. Cathcart. 60 L. P.. A. 734 (Minn. 1903).

12 Lichtenstein v. Case. 99 App. Div. 570 (N. Y. 1904).

13 Martin v. Bliss. 57 Hun 157 (N. Y. 1890).

14 Deter v. Jackson. 76 Kans. 568 (1907). See Sec. 145, 250 infra.

15 Featherston v. Trone, 102 S. W. 197 (Ark. 1907).

Sec. 145. When Refusal To Disclose Information Is Not Bad Faith

Where an owner of land agrees to pay another person as compensation for securing a purchaser for the land, all above a minimum sum per acre and a fixed sum in addition, and such person sells the land for an amount above the minimum, the fact that he refuses to tell the owner for how much he sold the land, or states to him that he sold it at the minimum, will not deprive him of his right to recover the additional fixed sum agreed upon. In such a case there is no such relation of trust and confidence between the parties as will require a disclosure to the owner of the terms of the sale. There is no principle of law that obliges one who has made an honest contract with another, to communicate to that other anything subsequently happening that might be an inducement to that other to repudiate his contract.16

16 Fulton v. Walters, 216 Pa. St. 66 (1906).