Sec. 1. Definition Of Real Estate Broker

"Real estate brokers are those who negotiate between the buyer and seller of real property, either finding a purchaser for one desirous to sell, or vice versa; they also manage estates, lease or let property, collect rents, and negotiate loans on bonds and mortgages." 1

Sec. 2. Application Of Term

While in one case2 it was said that the class of persons who are employed by owners of lands to find a purchaser for them, or, by those desirous of purchasing, to procure a vendor for them, are not in any legal or proper sense brokers, it has been stated, more recently, that the term broker is properly applied to a middleman.3 But whatever technical objection there may be to the use of the word "broker" in such case, it remains the actual fact that the term "real estate broker" is now used by jurist, lawyer and layman alike, to denote the agent who acts either for the purchaser or seller, or both, in negotiating the sale of real estate, or in any of the capacities embraced within the above definition.

1 4 Am. & Eng. Ency, of Law (2nd Ed.), 962.

'Howe v. Stevens, 35 N. Y. Super. Ct. (3 J. & S.) 189 (1873); aff'd, 53 N. Y. 62l (1873).

3 Souttaack v. Lane, 23 Misc. 515 (N. Y. 1898).

Sec. 3. Functions Of A Broker

"A broker is an agent primarily to establish privity of contract between two parties."4 "A broker is, in general, one who buys or sells property for another. Real estate brokers are agents for the sale and purchase of real property."5 As stated in one of the leading cases on the subject of brokers,6 quoting from Story:" ' The true definition of a broker seems to be that he is an agent employed to make bargains and contracts between other persons in matters of trade, commerce or navigation for a compensation commonly called brokerage.' Story Agency, Sec. 28, p. 25. In Pott v. Turner, 6 Bing. 702, 706, a broker is more tersely and quite accurately described as 'one who makes a bargain for another and receives a commission for so doing.' "7

And so it is said that the ordinary principles governing the relation of principal and agent apply to real estate brokers.8 In one case9 it was said, however, that "a broker is regarded as a middleman, and not as an agent in whom peculiar trust and confidence are placed."10

4 Clark on Contracts, 736.

5 Law of Contracts, Special Topics, West Pub. Co. (1896), Topic "Brokers," p. 2.

6 Slbbald v. Bethlehem Iron Co., 83 N. Y. 378 (1880).

7 See also Little Rock v. Barton, 33 Ark. 444-449 (1878); Kramer v. Blair, 88 Va. 463 (1891); McCullough v. Hitchcock, 71 Conn. 404 (1899).

As to whether a person making an isolated sale is a broker, see O'Neil v. Sinclair, 153 111. 525 (1894).

8 Martin v. Bliss, 57 Hun 157 (N. Y. 1890) ; Low v. Woodbury, 107 App. Div. 298 (N. Y. 1905); Kingsley v. Wheeler, 95 Minn. 362 (1905). See also Wilkinson v. McCullough, 196 Pa. St. 208-209 (1900).

9 Vinton v. Baldwin, 88 Ind. 105 (1882).

10 Citing Alexander v. Northwestern Un., 57 Ind. 466; Rowe v. Stevens, 53 N. Y. 261; Rupp v. Sampson, 16 Gray 398; Redneld v. Tegg, 38 N. Y. 212; Barry v. Schmidt, 27 Alb. L. J. 297.

Sec. 4. Definition Of Terms

The "principal" is one for whom the agent acts, and the term "principal" is hereinafter used interchangeably with "owner," "seller," and "vendor." The word "vendor" signifies the seller, while "vendee" signifies the purchaser.