Sec. 332. Action Based Upon A Contract

"Where an action or defense is based upon a contract, the pleading in which it is set forth should allege all the material facts."13 A consideration is essential to all contracts not under seal, except so-called "contracts of record."14 The employment of a broker creates a contract of brokerage and a consideration is essential to the validity thereof. The employer gives his promise of payment, either express or implied, upon the performance of the broker's part of the brokerage contract.15 In other words, it is a promise for an act, which is recognized as a consideration.16

"Consideration is a material and indispensable element of every contract. 'In declaring upon a contract not under seal, it is in all cases necessary to state that it was a contract that imports and implies consideration, as a bill of exchange or promissory note, or expressly to state the particular consideration upon which it is founded.' "17 " 'Where a consideration is not implied, or a request is essential to the defendant's liability, it is of the gist of the action, and must be specially averred.' "18

12 National Citizens' Bk. v. Toplltz, 178 N. Y. 467, 468 (1904).

13 Id.

14Clark on Contracts, 153.

15 See Sec. 139 supra.

16 Clark on Contracts, 165.

17National Citizens' Bk. v. Toplitz, 178 N. T. 467 (1904), (citing 1 Chitty on Pleadings (13th Am. Ed.). 292 and cases cited; Moak's Van Santvoord's Pleading. 164; Bliss on Code Pleading (2nd Ed.), Sec. 268; Beach on Modern Law of Contracts, Vol. 2, Sec. 1691; Bailey v. Freeman, 4 Johns. (N. Y.) 280; Dolcher v. Fry, 37 Barb. (N. Y.) 152).

18 National Citizens' Bk. v. Toplltz, supra, (citing Spear v. Downing, 34 Barb. (N. Y.) 522; Gould on Pleadings, 176). As to promise to pay commissions which are held to be without consideration and unenforceable, see Sec. 121, 205. And see Sec. 208-210. The consideration must be legal. Therefore, a promise to pay commission if the broker will commit a fraud upon his employer in bringing about a deal is unenforceable. See |Sec. 140-145. 209 supra; also Clark on Contracts, pp. 441, 442.

Sec. 333. Facts To Be Stated

Where the broker, therefore, attempts to set forth his cause of action by alleging the facts as they existed, he must state all the essential facts, which are at least these, - that the broker performed the services at the defendant's request, express or implied, or was employed by the principal,19 or where original employment is wanting, that his acts were ratified by the principal;20 that he was the procuring cause of the sale, i. e., under the prevailing rule,21 procured a buyer, ready, willing and able 22 to purchase on the employer's terms,23 or procured an enforceable contract of sale;24 and the agreed or customary amount of the commissions,25 or the reasonable value of the services,26 and non-payment thereof.

While it is customary to allege demand and non-payment, it is not essential to allege a demand, and, were it necessary, the bringing of the action is a sufficient demand 27 and the failure to make a previous demand would affect only the question of interest and probably costs.28

19 See Chs. IX, X. supra; 8 Ency. of Pl. & Pr. 833; 19 Cyc. 274. An allegation of employment should be incorporated In the complaint, followed by sufficient averments of a compliance with the contract of employment. Yoder v. Randol, 83 Pac. 537 (Okla. 1905) ; 3 L. R. A. (N. S.) 576. Under an allegation that the broker was employed by a person who "was the owner of and had charge and control" of the land, the broker need not prove that such person owned the record title. Cook v. Piatt, 104 S. W. 1133; 126 Mo. App. 553 (1907).

20 See || 109-112 supra.

21 See Sec.| 117-119 supra.

22 Where the purchaser is accepted by the principal, the purchaser's financial ability is no part of the broker's affirmative case. See || 153-155 supra.

23 The complaint should allege that the broker sold the property or that he procured a purchaser who was ready, able and willing to consummate the sale upon the specified terms. 8 Eucy. of Pl. & Pr.. 832.

24 In some jurisdictions, it Is held that the broker's obligation Is performed when he produces a purchaser ready, willing and able to purchase on the principal's terms, while in other jurisdictions the broker is required to bring about an enforceable contract of sale. The conflicting views have been referred to In several preceding chapters, and principally in |Sec. 117-119 supra.

25 See || 211-226 supra. That the defendant had knowledge of a custom need not be pleaded. Whitehouse v. Moore, 13 Abb. Pr. 142 (N. Y. 1861). See Sec. 225 supra as to pleading rules of a board of brokers.

26 See Sec. 226 supra.

27 Maguire v. Durant. 1 Misc. 509 (N. Y. 1892).

28 De Carricarti v. Blanco, 121 N. Y. 230 (1890); Sweeny v. City of New York, 173 N. Y. 414 (1903). And see as to necessity of demand when plaintiff pleads the legal effect, Sec. 330 supra.

As to alleging non-payment, it may be said that whatever may be the law, it is better practice to allege nonpayment as it is a simple matter to prove prima facie in a broker's case. There are occasions, however, where the question may become of importance, as for instance, in an action to recover broker's commissions where one of the parties has died and the survivor is disqualified from testifying.

The law is in some confusion on the general proposition of alleging and proving payment. In an action upon contract for the payment of money only, the allegation and proof of the promise and of the fact that it has matured, creates the presumption of non-payment and throws the burden of proving payment upon the one who asserts it.29

Where the statute requires the broker's authority to be in writing, some cases hold that the complaint must allege written authority.30 In New Jersey, where the statute declares that no broker or real estate agent selling or exchanging land shall be entitled to commission unless his authority is in writing signed by the owner or his agent, and the rate of commission is stated,31 it has been held that the broker is not obliged to set out in his pleading that his authority was in writing, and that, so far as the declaration is concerned, since the right to bring an action for services in negotiating the sale of property was not created by this statute, but existed at common law, and since the statute only requires that evidence of the request and authorization must be in writing and the rate of compensation be fixed by the writing, the law would presume that the contract declared on, if required to be in writing by the statute, was in writing. In other words, that the statute introduces a new rule of evidence, and does not alter or affect the rule of pleading.32

29 Conkling v. Weatherwax, 181 N. T. 258 (1905). in which note the views of the Judges of the N. Y. Court of Appeals expressed in separate opinions and memoranda; see also the cases there cited. Other cases bearing on the point are: Lent v. N. Y. etc. R. R. Co., 130 N. Y. 504 (1892) ; Crawford v. Tyng. 10 Misc. 143 (N. Y. 1894) ; Cochran v. Reich, 91 Hun 440 (N. Y. 1895); Gruenstein v. Jablowsky. 1 App. Div. 580 (N. Y. 1896) ; Dry Dock R. R. Co. v. N. & E. R. R.. 3 Misc. 61 (N. Y. 1893) ; Hauxhurst v. Ritch, 119 N. Y. 621 (1890); Edson v. Dillage. 8 How. Pr. 273 (N. Y. 1853); Fitzmahony v. Caulfleld, 25 App. Div. 119 (N. Y. 1898).

30Covey v. Henry, 71 Neb. 118 (1904). See also Lelmbach v. Regner, 70 N. J. L. 608 (1904).

31 See Sec. 16 supra.