A broker who procures a mortgage loan as requested, is entitled to his commissions even though, on account of defects in the title to the property, the loan is not finally made.22
Where the proposed borrower agreed that his title was free and clear of incumbrances, and the broker procured a person ready, willing and able to make the loan, but on examination of the title it developed that the same is not free and clear, and the proposed lender therefore refuses to complete the loan and advance the money, the broker is entitled to his commissions.23
In addition to the broker's commissions, the applicant for the loan may incur further expenses, such as fees for examination of the title. In fact it has been held that when a contract provides that compensation for services in searching a title is payable, whether the title be accepted or not, the owner is liable for such services.24
■ Referring to Cook v. Welch, 9 Allen 350; Desmond v. Stebblns, 140 Mass. 339, 342; Middleton v. Thompson, 163 Penn. St. 112; Keys v. Johnson, 68 Penn. St. 42, 43; Duclos v. Cunningham, 102 N. Y. 678.
20 Green v. Lucas, 83 L. T. (N. S.) 584; Sweeney v. Ten Mile Oil & Gas Co., 130 Penn. St. 193; Middleton v. Thompson, 163 Penn. St. 112; Holly v. Gosling, 3 E. D. Smith (N. Y.) 262; Peet v. Sherwood, 43 Minn. 447; Cheatham v. Yarbrough, 90 Tenn. 79.
21 See Sec. 185 supra.
22 Hevla v. Lopardo, 127 App. Div. 189 (N. Y. 1908); Peet v. Sherwood, 43 Minn. 448 (1890), (citing Vinton v. Baldwin, 88 Ind. 104; Holly v. Gosling, 3 E. D. Smith 262; Doty v. Miller, 43 Barb. 529; Knapp v. Wallace. 41 N. Y. 477; Gonzales v. Broad, 57 Cal. 224; Green v. Reid, 3 Frost & F. 226; Green v. Lucas, 31 Law T. (N. S.) 731; Mechem on Ag., Sec. 970). See also Sec. 168, 172 supra.
23 Flnck v. Bauer, 40 Misc. 218 (N. Y. 1903).
But where the refusal to finally make the loan was because the application for the loan incorrectly stated the width of the lot, and the broker who made out the application was aware that the owner at the time he signed the application was uncertain as to the dimensions, the broker is equally at fault with the owner in not disclosing such situation to the proposed lenders, and is not entitled to commissions.25 And where the agreement is not the ordinary employment of a broker to procure a person able and willing to make a loan, but is that the principal will accept a loan from a certain company and pay the broker his commission by deducting it from the amount of the loan, the broker is not entitled to commission if the proposed lender refuses to make the loan on account of alleged defects of title.26
That the broker is not a guarantor of the title offered, and broker's commissions cannot be defeated because of a defect in the principal's title, has already been shown.27
There must, of course, have been an employment of the broker by the principal, either express or implied. The subject of employment is presented in another chapter.29 Whether the broker's authority to negotiate a loan must be in writing or not, depends upon local statutes and ordinances and the inclination or disinclination of the courts to sustain such statutes and ordinances. The matter has already been presented at some length.30 The same is true with respect to whether or not the broker must obtain a license or pay a tax in order to carry on the vocation.31
24 Title Guarantee & Trust Co. v. Sternberg. 119 App. Div. 28 (N. Y. 1907).
25 Shropshire v. Frankel. 45 Misc. 616 (N. Y. 1904).
26 Hess v. Eggers. 37 Misc. 845 (N. Y. 1902). 27 See Sec. 167, 168, 170 supra.
28 See Sec. 185 supra. 29 See Ch. X supra.
Various forms of applications for loans are also given in Part VII of the present volume.32 Including the amount of the broker's commission in the statement of the expenses the borrower is to be at in obtaining the loan, does not convert a written application for a loan into a special stipulation that the broker shall not be entitled to commission in accordance with the general rule.33