Sec. 235. Commissions On Instalment Sales

Lots in the suburbs are frequently sold on the instalment plan. Urban property is sometimes also so sold. Where land companies are engaged in selling suburban property on the instalment plan, they usually have an agreement, or at least an understanding with their selling agents as to how the commissions shall be paid.43

In the absence of any agreement, the broker need not wait for his commissions until collection of deferred purchase money payments.44 He is not a guarantor of deferred payments or covenants, and is entitled to his commission when he has brought about a sale on his principal's terms or upon terms satisfactory to the principal. The broker does not therefore have to wait until all deferred payments are paid and all covenants on the part of the purchaser are complied with.45

But where the broker brings a purchaser who agrees to pay for the land in instalments, and the vendor agrees with the broker that the latter is to receive his commissions as each instalment of the purchase price is paid, the broker is entitled to commissions only on the amounts of the purchase price actually paid. 46

On the other hand, where commissions were to be paid out of the purchase money as it was paid to the vendor in instalments and some of the payments were made, but before all were made the purchaser became insolvent and the vendor foreclosed and bought in the land at a price equal to the amount still due him, it was held that the broker was entitled to recover the balance of his commission.47 The same would be true had someone else bid in the property at the foreclosure sale, and the original vendor thus received the balance of the purchase price. So long as the original vendor received the balance of the purchase price, in any of the ways contemplated by the contract of sale, the broker could recover the balance of commissions remaining unpaid.48

43 See Form 39 infra. Part VII. for a comprehensive agreement of this nature. 44Hancock v. Dodge, 85 Miss. 228 (1904). 45Morgan v. Keller. 194 Mo. 680 (1905).

46 Murray v. Rickard. 103 Va. 132 (1904). See also Moore v. Irvin, 20 L. B. A. (N. S.) 1172 (Ark. 1909).

47 Crane v. Eddy, 191 111. 645 (1901). 48 Id.