Sec. 98. Rule As To Commissions When Several Brokers Are Employed

The fact that a person is the first broker who calls the attention of the purchaser to the property, in itself, gives no claim to commissions. The right to commissions depends upon the performance of the broker's obligation to bring the buyer and seller to an agreement.13

Where the owner does not know that the purchaser produced by the second broker is the same purchaser which the first broker is working with, the owner is not liable to the first broker in the absence of bad faith, or of such facts as should have prompted inquiry.14 Although the parties are originally brought together by the broker, but no terms are agreed upon, and some weeks later the matter is taken up by another broker who finally consummates the sale by bringing the parties to terms, the first broker is not entitled to commissions. To earn his commission the broker must do something more than get authority from the owner to negotiate the sale. He must be the effectual cause of the sale. He must find the purchaser, or at the very least induce a purchaser to buy the property at a price acceptable to the owner.15 " The fact that a sale or exchange of the property is finally brought about by the efforts of the principal or another broker with a person with whom the first broker had previously negotiated without success, will not furnish a legal basis for a claim for commissions by the first broker, especially when it appears that the first broker has for a long time ceased negotiations with the purchaser and abandoned all efforts to induce him to take the property on the proposed terms."16 While the statement of the law is plain, it is a matter not always free from difficulty to determine which broker's efforts were the inducing cause of the sale.17

11 Also citing Day v. Porter, 60 111. App. 386, 389. 12 Hobbs v. Edgar. 23 Misc. 618 (N. Y. 1898). 13 Haines v. Barney, 33 Misc. 748 (N. Y. 1900). 14 Quist v. Goodfellow, 99 Minn. 511 (1906).

In Edwards v. Pike, 107 S. W. 586 (Tex. 1908), it was said: "The general rule is that a real estate agent having a contract authorizing him to effect a sale is entitled to the commissions agreed upon where he procures a buyer who consummates the purchase of the property on terms satisfactory to the owner. Ordinarily the application of this rule to the facts of a given case is not difficult; for, when it is shown that the agent was instrumental in bringing the buyer and seller together, the fact that the agent was the procuring cause of the sale afterwards consummated is sufficiently established. But when each of two or more brokers within the knowledge of the other has a contract authorizing him to effect a sale of the same property, the fact that one was instrumental in bringing the parties together fairly cannot be made the test of the liability of the owner of the property for commissions claimed. The owner has a right to authorize more than one broker, each independently of the other, to effect a sale of his property; and, so long as he remains neutral, he ought to be permitted without incurring liability for commissions to more than one of them to consummate the sale of the property through the one who first produces a person ready to buy it, whether the agent producing the purchaser is the one who first brought him and the buyer together or not. The practical test which ought to control in fixing the liability of the property owner on the facts of a case like this is: Within the knowledge of the owner at the time, was the sale consummated on terms agreed upon between the buyer and the broker who brought the parties together; or was it consummated on other terms as the result of negotiations between another broker and the buyer, and after the latter had abandoned the contract made by him with the other broker? In the absence of special circumstances which would make it proper to so charge him, the owner ought not to be held liable for commissions to more than one broker, and, after actually selling his property to a purchaser produced by one broker on terms negotiated by such broker and not by another, he ought not before paying him the commissions be required * * * at his peril to determine whether some other broker was not, in fact, the procuring cause of the sale.18 In such a case, the risk of finally effecting by his agency, on terms agreed upon between him and the buyer, a sale of the property, ought to be borne by the broker. His services towards effecting one are performed with a knowledge on his part that another broker has authority similar to that conferred upon him; and, if before a sale is completed the buyer quits him and on other terms consummates it through another agent, it is a contingency he should be held to have contemplated at the time he undertook the service, and about the happening of which he has no right to complain.19 The broker who undertakes a sale of property with full knowledge that another broker has also undertaken to sell it ought not to expect more of the owner than that he will not interfere in favor of the one or the other. It is then an even contest between them, where the chances of success in contemplation of the competition to be expected should be presumed to have been duly weighed by each; and, if as a result of such competition, without interference or fault on the part of the owner, the sale is actually consummated by his competitor the broker who brought the prospective purchaser and the owner together, but failed to consummate a sale upon the terms agreed upon between him and the buyer, ought not to be permitted to charge against the owner the loss sustained by him, not by the owner's fault but as a result of acts of his competitor and conduct of the purchaser which he reasonably should have contemplated might ensue when he undertook and performed the service. Such a case is not at all like the one where the broker, having the exclusive right to sell, or ignorant of the fact that another broker has a right equal to his own, brings the purchaser and the owner together, when the sale is consummated by the owner himself or by the direct agency of another broker. There the broker bringing the parties together should be held to be entitled to his commissions if the sale is consummated by the owner himself, because he is entitled to same by the terms of his contract; and if the sale is consummated by another broker, because his services were performed on the faith of his contract and without reference to risks of failure which a knowledge that he had a competitor would have caused him to weigh and perhaps provide against."

15 De Zavala v. Rogallner, 45 Misc. 430 (N. Y. 1904).

16 Davis v. Gassette, 30 111. App. 45 (1888). (citing Lipe v. Ludewick, 14 111. App. 372; Sibbald v. Bethlehem Iron Works, 83 N. Y. 378). 17 See also Sec. 173 infra.

18 See Ch. XXXV, " Interpleader." Sec. 339, as to conflicting claims for commission.

19 Citing Vreeland v. Vetterlein, 33 N. J. L. 247; Scott v. Lloyd, 19 Colo. 401; 35 Pac. 733; Farrar v. Brodt, 35 111. App. 617; McGuire v. Carlson, 61 111. App. 295.