Sec. 338. General Statement

When two or more brokers are employed on the same property, the circumstances may be such that both brokers claim the commission and the owner be unable to determine which of the two was the procuring cause of the sale. (Sec.339.)

A bill of strict interpleader is one in which the complainant asserts his possession of something in which he claims no personal interest, but in which other persons whom he makes defendants set up conflicting claims and the complainant cannot safely determine to which he shall yield. (Sec. 340.)

Interpleader has been held proper where two brokers claim commission on the same sale (Sec. 341) but even in such circumstances the right to interplead is not universally recognized. (Sec. 342.)

The procedure with respect to interpleader is in most places regulated by statute. (Sec. 343.)

When two brokers claim the same commission and one sues in a court without jurisdiction to accord the right of interpleader, the vendor may bring an action of interpleader in another court having jurisdiction. (Sec. 344.)

Sufficient grounds for interpleader must be shown. (Sec. 345.) Interpleader makes actions at law equity suits. (Sec. 346.)

Sec. 339. Double Claims For Commission

That the principal may employ as-many different brokers as he pleases to sell his property, and is liable for commissions only to that broker who is the procuring cause of the sale, has already been discussed.1 Under such circumstances it not infrequently occurs that two different brokers claim to have been the inducing cause in the same sale and each claims the commission.

The existence of such complications is mainly due to the purchaser's efforts to secure the property on the best possible terms. A prospective purchaser may be shown the property by a broker and learn from him the terms of sale. The broker may or may not report the pending negotiations to his principal. Even if he informs the principal of the negotiations, he rarely, at this stage, discloses who the proposed purchaser is, for fear the principal may be tempted to deal direct.

Meanwhile the proposed purchaser, looking for other property, comes into contact with other brokers in the same vicinity, and is perhaps shown the same property which the first broker has already shown him. In many cases the prospective purchaser does not disclose to this second broker the fact that another broker has already shown him the property, but gets the best terms he can from the second broker, who, in his turn, fails to disclose the name of the prospective purchaser to the principal.

Sometimes the purchaser deals at once with the second broker if this latter holds out any hope of obtaining the property on more favorable terms. Sometimes, however, the purchaser returns to the first broker, either because the first broker held out better hopes or because the purchaser desires to inform this first broker that he, the purchaser, has been offered the property under more favorable terms. He does this expecting the first broker to do even better for him.

The contest is then on. The principal is besieged by both brokers, and, not knowing that both have the same buyer, imagines that two prospective purchasers are all at once very anxious for his property. This sometimes makes him quite independent.

1 See Sec. 97, 98, 237 supra.

When a sale is finally brought about, the principal finds that he has on his hands a difficult proposition. He does not want to pay two commissions for the one sale. If, however, he undertakes to determine the question and pays the commission to the broker whom he decides to have been the procuring cause of the sale, a court or a jury may subsequently, on the suit of the other broker, decide that his decision was in error, and then the principal, though wholly innocent of any wrong, is obliged to pay the judgment obtained by the second broker or take an expensive appeal.

Even if he takes the second course he would undoubtedly be informed by the appellate tribunal that while it deplores a situation which subjects the principal to double payment, yet the whole matter was a question of fact, and as there was evidence upon which the jury could have reached the verdict it rendered, the appellate court did not feel inclined to disturb the verdict.

The principal may go still further and ask the first broker to whom he voluntarily paid the commission, to return it. The first broker replies that he feels that he earned the commission, and adds that as he was not a party to the litigation already had, he was not given an opportunity to show in court that he had earned the commission. The principal may now sue the first broker. The result is not always certain. The first broker may even be successful in establishing before another court or jury that he is the party who is actually entitled to retain the money.

When the principal has thus dragged himself through the court proceedings, he finds that it has cost him two commissions, and in addition, several times the amount of an ordinary commission in the cost of the litigation, and that he is worse off than if he had voluntarily paid both commissions in the beginning.

In such circumstances, may the principal avoid all this expense and trouble by resorting to the remedy known as interpleader?