Sec. 206. Liability Of Persons Not Owning The Property

The fact that the party who employs the broker is not the owner of the property does not relieve him from liability for broker's commissions.15 "It is matter of common knowledge that in the business world men do frequentlyobtainwhat are termed options upon real property - that is to say, the right to purchase, and then employ brokers to negotiate a sale at an enhanced price, the title being all the while in others. * * * A may possess such knowledge as justifies him in his judgment in contracting to sell, or in contracting with a broker to sell for him, or to find a purchaser for property which he does not own. If he does so, without so guarding his agreement as to save himself in case of failure to secure title to the thing he has authorized to be sold, he cannot be heard to complain of the result of his own folly or lack of foresight."16

10 Redfleld v. Tegg, 38 N. Y. 214 (1868). 11 Barber v. Hildebrand, 42 Nebr. 405 (1894). 12 Wolverton v. Tuttle, 94 Pac. 963 (Ore. 1908). 13 Leimbach v. Regner. 70 N. J. L. 609, 610 (1904).

14 Headnote in Bab v. Hirschbein, 12 N. Y. Suppl. 730 (1891). See also Sec. 209 infra.

15 Sanchea v. Yorba, 97 Pac. 205 (Cal. 1908).

A broker is not required to search his customer's title to the property, but may assume that the customer's title thereto is perfect. He relies upon his employment, and his only duty is to comply with the terms thereof by producing a purchaser ready, willing and able to take the property upon the vendor's terms.17 Where title is in the wife, and the husband puts the property in the broker's hands for sale without disclosing the fact that he is acting as agent for his wife, the husband may be held for the commission.18 This is on the ground stated, that a person may become liable to the broker for his commission even though that person is not the owner of the property.

If a person places property in the hands of a broker for sale, and employs the broker to sell it without at the same time stating that he is not really the owner but only acting for the owner, that person becomes liable for the commission, even though the broker afterwards discovers that the person was only acting for the owner. Thus in Whiting v. Saunders, 23 Misc. 332 (N. Y. 1898), the wife of the defendant Saunders owned the property. The defendant placed it in the plaintiff's hands, a broker, for sale. There was some dispute as to whether the defendant told the broker at the time that his wife owned the property. The broker drew the contract when he secured a purchaser, and the contract appears to have been drawn "Thorndike Saunders, attorney for Emma Saunders, party of the second part," and it was claimed that this was evidence that the broker knew that Saunders was acting for his wife. In the lower court the jury had returned a verdict for the broker against Saunders on this conflicting proof.

16 Martin v. Ede, 103 Cal. 161 (1894).

17 Harrell v. Velth, 13 N. Y. St. Rep. 738 (1888). See Chap. XI. Sec. 117-119 supra, as to conflict of opinion as to when the broker's obligation is performed.

18 Jarvis v. Schaefer, 105 N. Y. 289 (1887); Bounds v. Alee, 116 Iowa 345 (1902).

In affirming this judgment, the court (Appellate Term of the Supreme Court) said in part: "There can be no doubt that plaintiffs were aware of defendant's agency before the contract of exchange or sale between Mrs. Saunders and Mrs. Boschen, by their attorneys, was executed or even drawn up; but we are of opinion that there is some evidence tending to show that plaintiffs did not know of defendant's agency until after they had undertaken the employment of finding a purchaser and had brought the transaction, practically, to a close. The subsequent disclosure of the principal came too late, for a person, contracting as agent, will be personally responsible, where, at the time of making the contract (of brokerage), he does not disclose the fact of his agency but treats with the other party as being himself the principal; for in such case it follows, irresistibly, that credit is given to him on account of the contract. He must disclose the fact that he is acting only as agent, in order that the other party may determine whether he will accept the responsibility of the principal in the transaction. See Ashner v. Abenheim, 19 Misc. 288; Story Ag., Sec. 266."

When a husband acts for his wife in the management or disposition of her property, and when his action naturally tends to accomplish her known wishes in regard to it, it needs but little evidence to warrant an inference that the action was authorized by her.19 "A wife may act as the agent of her husband, and if he permits her so to act in any particular transaction, he adopts and is bound by her acts and admissions, and they may be given in evidence against him; and a subsequent acknowledgment or ratification of her acts by the husband must be * * * evidence of and equivalent to an original authority."20