Sec. 183. Rule As Affected By Broker's Bad Faith

Where a written agreement for an exchange was procured by the broker, but it turned out that the other party to the exchange did not own all the land which he agreed to convey and was not able to make a title at the appointed time, and the broker knew that the party he procured did not own the property he was to convey in exchange, and such party became financially irresponsible, and went into insolvency, the lower court refused the broker commissions. The Supreme Judicial Court sustained the judgment,28 but apparently only because of the exceptional facts, saying: "In view of the state of the evidence, we do not regard this as an abstract unqualified ruling that in all cases in order to entitle a broker to his commission, the contract of sale or exchange must be one which could be enforced specifically; we construe it rather as a ruling on the specific facts which the Judge expressly or probably found. We think that the Judge only meant to say that a broker does not earn his commission by bringing a person to his employer who assumes to contract as owner, when, in fact, he is not owner, as the broker knows and the employer does not know, and who, within the few days allowed for performance turns out unable to perform his contract and irresponsible.29 We regard this proposition as correct, and as consistent with the well-settled law that, in general, commissions are earned when a binding contract of sale is made." 30

26 See Sec. 181 supra. 27 See also Sec. 183 infra.

28 Bnrnham v. Upton, 174 Mass. 409 (1899).

29 Referring to Butler v. Baker, 17 R. I. 582; Grensel v. Dean, 98 Iowa 405; 4 Am. & Eng. Ency. of Law (2nd Ed.), 972-975, Sab. V, "Brokers."

°Citing Bice v. Mayo, 107 Mass. 550; Ward v. Cobb, 148 Mass. 518, 521.