Sec. 175. General Statement

The same rules apply to an exchange of property as to its sale. (Sec. 176-178.)

Authority to sell does not imply authority to exchange. (Sec. 179.)

While under the general rule a broker cannot recover commissions from both sides, yet where both agree in the contract to pay the broker, their knowledge of the situation appears. (Sec. 180.)

If a contract of exchange is brought about by the broker, he is entitled to his commission even though one of the parties be unable to fulfill the contract. (Sec. 181-183.)

Sec. 176. Conflicting Decisions As To When Commissions Are Earned

Some decisions hold that the broker is not entitled to commissions until he has brought about a valid enforceable contract, and some that the contract must be actually performed, while others hold that the commissions are earned when the broker has produced a customer ready, willing and able to purchase on his principal's terms.1 There is the same conflict of decisions as to when commissions on an exchange are earned.

Save as to those sections dealing with failure to fulfill contract,2 the authorities presented in this chapter deal primarily with the situation as it is affected by the rule that commissions are earned when the broker produces a party ready, able and willing to meet the requirements of the broker's employer.

šSee Sec. 117-119. 157. 166 supra. ˛ See Sec. 181-183 infra.

Sec. 177. Commissions On Exchanges

The broker may, as in a sale, obligate himself to various conditions which will affect his claim to commissions.3 Under the ordinary employment, however, his commissions are earned when he produces a person ready, able and willing to perform his part of the agreement upon the terms named by the broker's employer.4

"To entitle a real estate broker to compensation," says the court in Mutchnick v. Davis, 130 App. Div. 419 (N. Y. 1909), "he must produce a customer not only willing but able to purchase his client's property upon the terms fixed by such client. The same rule applies to a proposed exchange of real estate." 5 Commissions are earned when a customer is procured ready to make an exchange on terms satisfactory to the employer.6

Sec. 178. Employment

We have already seen that one of the requisites to a broker's commissions, is employment.7 The same applies to an exchange.8 A volunteer has no claim to commission. Thus, where a person ascertained that A desired to sell or exchange, and presented A's card to B, which resulted in an exchange, it was held that the broker was not entitled to commission.9

3 See Sec. 113-119 supra.

4 Lockwood v. Halsey, 41 Kans. 170 (1889); Suydam v. Healy, 93 App. Div. 396 (N. Y. 1904); cf. Norman v. Reuther, 25 Misc. 161 (N. Y. 1898). See also Sec. 181-183 infra.

5 See also Schulte" v. Meehan, 133 111. App. 499 (1907).

6 Hannan v. Prentiss, 124 Mich. 419 (1900). Where a person refuses to enter into an exchange effected by the broker, see Mulhall v. Bradley, 50 App. Div. 179 (N. Y. 1900), as to whether the broker is entitled to recover as damages the commissions the other party to the exchange was to pay him.

7 See Ch. X supra.

8 See Form 38 infra, Ch. XL, "Authority of Broker to Exchange Property."

9 See Walton v. M'Morrow, 63 App. Div. 147 (N. Y. 1901); aff'd, 175 N. Y. 493 (1903), no opinion.