A broker engaged by a prospective purchaser to purchase property must, in order to entitle himself to a commission from the prospective purchaser, either procure from the owner and deliver to the purchaser a valid contract for sale which could be enforced by the purchaser, or obtain from the owner a verbal agreement to make the sale, and bring the owner and prospective purchaser together so that the latter may have an opportunity to procure such a contract.28
Where the broker represents the purchaser and has authority to buy at a fixed price, the broker earns his commission when he produces a vendor and his principal makes a valid, binding agreement with this vendor, and the broker's right to his commission is not affected by the inability or refusal of the vendor to deliver the property. In such a case, the broker has not produced a vendor able to deliver the property, and would not have earned his commission had it not been that his principal, by contracting with the vendor, had accepted him.29
Acknowledging in the contract an indebtedness to the broker to the amount of his customary commission, may be taken as an admission that the sale was effected through the agency of the broker.30
But even where the owner actually promises to pay the broker commissions, under the belief that the broker was the procuring cause of the sale, he may nevertheless resist payment, and successfully too, if in fact the broker was not the procuring cause.31
Without an employment, or the performance by the broker of some service at the request, express or implied, of the principal, a promise by the latter to pay commissions has no consideration for its support and no liability to pay is created by it.32 And so it was said that in the absence of a written contract of employment, as required by the New Jersey statute,33 a subsequent promise to pay commission is without consideration.34 And where the promise to pay commission is made after the sale is already consummated, there is said to be no consideration for the promise.35
28 Logan v. McMnllen, 87 Pac. 285 (Cal. 1906). See also Sec. 117 supra.
29 Roche v. Smith, 176 Mass. 595. at 597, 598; 51 L. R. A. 510 (1900).
30 Redfleld v. Tegg. 38 N. Y. 214 (1868).
31 Bellesheim v. Palm, 54 App. Div. 77 (N. Y. 1900).
32 Myers v. Dean, 132 N. Y. 71, 72 (1892).
In one of the leading cases,36 the New York Court of Appeals says: "A broker is never entitled to commissions for unsuccessful efforts.37 The risk of failure is wholly his. The reward comes only with his success. That is the plain contract and contemplation of the parties. The broker may devote his time and labor, and expend his money with ever so much of devotion to the interests of his employer, and yet if he fails; if without effecting an agreement or accomplishing a bargain, he abandons the effort, or his authority is fairly and in good faith terminated, he gains no right to commissions. He loses the labor and effort which was staked upon success. And in such event it matters not that after his failure, and the termination of his agency, what he has done proves of use and benefit to the principal. In a multitude of cases that must necessarily result. He may have introduced to each other parties who otherwise would have never met; he may have created impressions which, under later and more favorable circumstances, naturally lead to and materially assist in the consummation of a sale; he may have planted the very seeds from which others reap the harvest; but all that gives him no claim. It was part of his risk that failing himself, not successful in fulfilling his obligation, others might be left to some extent to avail themselves of the fruit of his labors. As was said in Wylie v. Marine National Bank, 61 N. Y. 416, in such a case, the principal violates no right of the broker by selling to the first party who offers the price asked, and it matters not the sale is to the very party with whom the broker had been negotiating. He failed to find or produce a purchaser upon the terms prescribed in his employment, and the principal was under no obligation to wait longer that he might make further efforts. The failure, therefore, and its consequences, were the risk of the broker only." 38
33 See Sec. 16 supra.
34 Leimbach v. Regner, 70 N. J. L. 609, 610 (1904). See also Sec. 330, 333.
35 Wolverton v. Tuttle, 94 Pac. 963 (Ore. 1908).
36 Slbbald v. Bethlehem Iron Co., 83 N. Y. 383 (1880).
37 See Patten v. Willis, 134 111. App. 649 (1907); Newton v. Conness, 106 S. W. 893 (Tex. 1908); Raleigh R. E. & T. Co. v. Adams, 145 N. C. 166 (1907); Smith T. Kimball, 193 Mass. 585 (1907). As to consideration for promise to pay commission though the broker is unsuccessful, see Klmmel v. Skelly. 130 Cal. 555 (1900). See also Sec. 80-84.
In Garcelon v. Tibbets, 84 Me. 148 (1891), the court said: "It is now the well-settled doctrine, that in the absence of any usage, or contract, express or implied, or conduct of the seller preventing a completion of the bargain by the broker, an action by the broker for his commissions will not lie until it is shown that he has effected or procured a sale of the property. It is not enough that the broker has devoted his time, labor or money to the interests of his employer. Unsuccessful efforts, however meritorious, afford no ground of action. Where his acts effect no agreement or contract between his employer and the purchaser, the loss must be his own. He loses his labor and effort which he staked upon success. If no contract, then no reward. His commissions are based upon the contract of sale.39 Of course, there may be contracts between the broker and his employer, by the terms of which the broker may become entitled to his commissions, even though a bargain or sale may not be effected. In such cases the terms of the contract must govern, as in Chapin v. Bridges, 116 Mass. 105, and Rice v. Mayo, 107 Mass. 550."
38 See Sec. 158 infra; also Sec. 242 infra.
39 Citing Vlaux v. Old South Society, 133 Mass. 1, 10; Loud v. Hall, 106 Mass. 404, 407: Tombs v. Alexander, 101 Mass. 255; Koch v. Emmerling, 22 How. (U. S.) 69; Glentworth v. Luther, 21 Barb. (N. Y.) 147; Drurv v. Newman. 99 Mass. 256; Sibbald v. The Bethlehem Iron Co., 83 N. Y. 383; Cook v. Welch. 9 Allen (Mass.) 350; Veazie v. Parker, 72 Me. 443; Rockwell v. Newton, 44 Conn. 337.