As a general rule, the person who engages the broker is liable for the commissions. (Sec. 204.)
A mere promise to pay commissions may, under some circumstances, create no liability. (Sec. 205.)
Persons not owning the property may become liable for the commissions if they engage the broker. (Sec. 206.)
While generally it is the vendor who pays the commissions, the purchaser may become liable therefor by special agreement or where he engages the broker to buy. (Sec. 208-210.)
As a general rule, the person who engages the broker is liable for the commissions if the broker brings about a sale. While, generally, the owner of the property - that is, the vendor - either himself or through an agent engages the broker, and is, therefore, liable for the commissions,1 it is not at all necessary that the broker should show that the person he seeks to hold is the owner of the property.2 In all cases, the broker must, of course, show that the necessary prerequisites exist which entitle him to commission.3
¹ Downing v. Buck, 135 Mich. 638 (1904). ² See Sec. 206 infra.
Where the vendor, by means of fraud, secures the broker's release of his claim for full commissions, the broker may still recover the amount, less what he has already received.4 Where the question is as to which of a set of brokers is entitled to the commissions, the collusion of the principal with one set of brokers to defeat the commissions of the other, is material.5
Where the separate owners of distinct parts of an entire tract jointly employ a broker to sell the whole tract, an action may be maintained by such broker against all jointly, but, if such contract be not proved, the suit may fail upon the general issue.6
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.7 And 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.8
An admission by the owner that the broker is entitled to a commission may be considered as evidence.9 And 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.10 But a clause in the contract between vendor and vendee as to how and by whom the commission is to be paid, is not a contract with the broker for the payment of the commission.11 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.12 And so it has been said in New Jersey that in the absence of a written contract of employment, as required by the New Jersey statute, a subsequent promise to pay commission is without consideration.13
3 See Cb. IX. supra.
4 Bowe v. Gage. 112 N. W. 469 (Wis. 1907); 12 L. R. A. (N. S.) 205. 5 Haven v. Tarter, 124 Mo. App. 691 (1907). See also Sec. 97, 98 supra.
6 McGill v. Pressley. 62 Ind. 193 (1878). 7 Myers v. Dean, 132 N. Y. 71, 72 (1892).
8 Belleshelm v. Palm. 54 App. Div. 77 (N. Y. 1900). As to consideration for promise to pay broker though he is not successful, see Kimmel v. Skelly, 130 Cal. 555 (1900).
» Metcalfe v. Gordon, 86 App. Div. 370 (N. Y. 1903).
"By a written contract for the sale of real estate the vendee agreed 'to pay all commissions or brokerage arising by reason of the sale of said property. 'The title proved defective, and the contract was never performed. In an action against the vendee for commissions plaintiff alleged that the vendor employed him to sell the property on condition that the vendee should pay the commission, and that defendant, with knowledge of this fact, agreed to pay plaintiff's commission. Held, that plaintiff had no cause of action on the contract between the vendor and vendee; he could only recover on defendant's oral agreement with him; and testimony was admissible that defendant agreed to pay his commission only if the title proved good."14