Sec. 119. General Rule As To "Procuring Cause."

As will be noted, there is some conflict of opinion as to when the agent's commission is earned; in other words, as to when he is the "procuring cause," some of the authorities holding that the procuring of an enforceable contract of sale is requisite to recovery. In some instances the authorities cited for the latter proposition do not sustain it, but are based on the particular nature of the employment, or relate to an exchange of property, or the procuring of a lease and not to a sale.

A suggestion will, in connection with what has been already said, assist in giving the proper emphasis to the point really decided in these cases. Some of them sustain the proposition that the broker is not the procuring cause unless he secures an executed contract of sale. But it is not true that the authorities cited for the proposition all sustain it. On the contrary, it will be found that some do not and that the text writers and even the judges who do, stumble to their conclusions.

The cases do say with one accord that the broker is entitled to commissions when he procures a contract of sale, but they do not mean that the broker must procure a contract of sale before he is entitled to commissions. The emphasis should be on this, that if he does procure such a contract his commissions are earned. But by weight of authority they would have been earned also had he not procured the contract, but instead produced a purchaser ready, willing and able to purchase.

27 Ormsby v. Graham, 123 Iowa 213, 216 (1904).

One illustration will suffice to show how easily errors are made in this matter. In a comparatively recent case, already cited, but which we refrain from now singling out, the court said that some cases hold that the broker must procure the contract to earn his commission, and cited authority for the statement. Yet the very first supporting citation does not really sustain the proposition. In this cited case the fact was that the broker had procured a contract of sale and the court very rightly said that this entitled him to his commission, but nowhere in the entire opinion was it said that the procuring of the contract was essential. There are not a few cases cited in support of the statement that an executed contract of sale is required for recovery of commissions, which are as inadequate.

The statements of the present chapter have been purposely confined to the discussion of a sale or exchange. Some authorities hold that the case of a broker negotiating a loan or a lease is the same as that of a broker negotiating a sale, while others apply a somewhat different rule to a loan or lease. There are states - Illinois, for example - where, as has already been indicated, even the decisions of the same court conflict on the question as to when the broker is the procuring cause of a sale. So there are instances - New York, for example - where the rule applied to loans is somewhat different from that applied to sales. The subject of commissions on exchanges, on loans and on leases is discussed in Chapters XVIII-XX of the present volume.