Sec. 12. General Statement

Generally, the broker's authority to negotiate the sale or purchase of real estate, loans thereon, or the renting thereof, need not be in writing (Sec. 13-26), except that, -

(1) The statutes in some jurisdictions require written authority. (Sec. 14-22.)

(2) An authority to a broker which, by its terms, is not to be performed within a year, must be in writing. (Sec. 24-26.)

Sec. 13. Form Of Authorization

As a general rule, the broker's authority to negotiate a sale, a purchase or exchange of real estate, mortgage loan or lease, need not be in writing.1 The requirement of the Statute of Frauds in some states that a contract for the sale of real estate must be in writing, subscribed by the vendor or his agent thereunto authorized in writing,2 must not be confused with the proposition as to whether the agent's authority to negotiate a sale should be in writing. As was said in one case," a person may employ a broker or agent to negotiate a sale of real estate without giving him written authority so to do. As between the vendor and vendee, the authority of the agent of the vendor to sign the contract of sale must be in writing,3 but the rule goes no further." 4 But in some jurisdictions the statutes require written authority in the broker, either to negotiate the sale or exchange of real property, or to procure a loan upon it. There may, of course, also be local regulations where there are no state statutes, but with the extent or validity of such local regulations this chapter cannot assume to deal. The following sections contain the statute of each of several representative states.

1 Fisher Co. v. Woods, 187 N. Y. 90 (1907): Waterman R. E. Exchange v. Stephens, 71 Mich. 104 (1888); Griffith v. Woolworth. 28 Neb. 717 (1890) : (See also Sec. 20 as to present Nebraska statute); Jackson v. Higgins, 70 N. H. 637 (1900); Lamb v. Baxter. 130 N. C. 67 (1902); McLaughlin v. Wheeler. 1 S. D. 497 (1891). See also Sec. 24-26 infra as to agreements not to be performed within a year.

See Sec. 31-37 infra.

Sec. 14. New York; Authority To Negotiate Sale

Chapter 128 of the New York Laws of 1901, which went into effect September 1, 1901, and became Sec. 640d of the then Penal Code, provided that, "In cities of the first and second class,5 any person who shall offer for sale any real property without the written authority of the owner of such property, or of his attorney in fact, appointed in writing, or of a person who has made a written contract for the purchase of such property with the owner thereof, shall be guilty of a misdemeanor."

The lower and intermediate appellate courts of New York were divided as to the legality of this statute. Some held that the broker could not recover commissions unless his authority to sell was in writing,6 while others held that the broker could recover notwithstanding his authority was not in writing.7 Then, too, distinctions were drawn, and it was held that the statute did not apply where a broker was employed to sell the interest of an intending purchaser under a contract for the sale of real estate.8 Finally, however, the Court of Appeals of New York, which is the court of last resort in that State, declared the law unconstitutional,9 the law itself was repealed by Chapter 516, Laws of 1906, May 21, 1906, and, apparently, that there might be no question about it, the law was again repealed by the new Penal Law of 1909.10 Written authority to negotiate a sale is therefore no longer necessary in New York State.

This is a requirement of the Illinois statute of frauds which provides that an agent's authority to sign a contract must be in writing. See statute quoted in Sec. 36 infra.

* Monroe v. Snow, 131 111. 135 (1891).

5 The New York State Constitution defines such cities - Art. XII. Sec. 2.

6 Whiteley v. Terry, 39 Misc. 93 (N. Y. 1902); 83 App. Div. 197 ( N. Y. 1903); Cohen v. Boecuzzi, 42 Misc. 544 (N. Y. 1904).

7 Grossman v. Caminez. 79 App. Div. 15 ( N. Y. 1903); Cody v. Dempsey, 86 App. Div. 335 (N. Y. 1903).