LIABILITY TO A REAL ESTATE BROKER FOR A COMMISSION ON A SALE WHICH FAILED.

Court of Appeals for Franklin County.

#### Thomas C. Jamison v. Richard A. Harrison, Jr.*

Decided, February 19, 1919.

*Broker’s Commission*— Owner *Liable Therefor*— Where *Sale Fails Through Inability to Give Title*— Presumption *Upon Which the Broker May Rely.*

1. A real estate broker who undertook to procure for a property owner “a purchaser who would be ready, willing and able to buy” the property in question at a specified price, is' entitled to his commission upon producing such a purchaser, notwithstanding the sale failed through inability of the party. with whom he contracted to give title.

2. The broker in such a case has a right to rely on the presumption that the party contracting with him will be able to perform his part of the contract and furnish title to a prospective purchaser.

*Wilson & Sector,*attorneys for plaintiff in error.

*James A. Allen,*contra.

*

Reversing *Jamison*v. *Harrison,*21 N.P.(N.S.), 266.

Kunkle, J.

This is an action to recover a broker’s commission. The case was submitted to the lower court upon a demurrer to the petition of plaintiff in error. The demurrer was sustained and final judgment rendered. From such ■ judgment plaintiff in error prosecutes error to this court.

The petition alleges that on or about the first day of May, 1918, the plaintiff entered into a contract, not in writing, with filie defendant, by the terms of which plaintiff agreed to procure for defendant a purchaser who would be ready, willing and able to pay at the rate of $175 per acre for certain real estate in which the defendant had an undivided one-fourth interest and which real estate is described by metes and bounds.

*482The petition further states that defendant agreed to pay plaintiff for his service in procuring such purchaser the sum of $2,115.75, said sum being three per cent, of said sale price of the farm; that on or about June 15, 1918, the plaintiff procured a purchaser for said farm who was ready, willing and able to buy the same and to pay therefor at the rate of $175 per acre; but the defendant upon being notified by plaintiff that such purchaser had been procured, failed, neglected and refused to contract with said purchaser for the sale of said farm or cause the same to be sold or conveyed to him for said consideration.

Plaintiff therefore asks judgment in the sum of $2,115.75.

This ease must be determined from the particular contract alleged to have been entered into by the said parties.

The plaintiff agreed: “To procure for defendant a purchaser who would be ready, willing and able to buy at the rate of $175 per acre the real estate in question.”

The petition alleges that the plaintiff “Did procure a purchaser for the said farm who was ready, willing and able to buy the same and to pay therefor at the rate of $175 per acre.”

It is in effect admitted that the averments of the petition are sufficient to charge the defendant with liability if the defendant had been the sole owner of the real estate in question.

It is contended, however, by defendant that plaintiff is not entitled to recover, because the plaintiff knew that the defendant was not the sole owner of the property, but owned only a one-fourth interest therein, and because it does not affirmatively appear from the petition .that the defendant was authorized by his co-tenants to employ the plaintiff as a broker to find a purchaser for the entire property in question and to complete a sale in the event such purchaser was secured.

Counsel for defendant in error among other authorities cites Sections 183, 186 and' 256 of Mechem on Agency and quotes therefrom as follows:

> “Where several persons having common interests desire to be represented by an agent, it is, in general, true that one of such persons has no implied power to appoint an agent for all, and that all must unite in making the appointment. Each may *483appoint for himself or all unitedly may appoint for all, but one has no implied power to appoint for another or for all.

> “In the case of co-tenants, there is no implied authority in each to act for all so as to bind them personally, and the act of one, or the appointment of an agent by one will, therefore, bind that one only.

> “In the first place it is to be recalled that, except in the few eases already referred to wherein the law confers authority, the law itself makes no presumption of agency; it is always a fact to be proved; and the person who alleges it has the burden of proving it by a preponderance of the evidence. ’ ’

We think the above citations would apply in a case where the contract was sought to be enforced against third persons, but would have no application in the present case where the plaintiff does not seek to hold anyone except the person with whom he made the contract.

AVe think it is well established that where a party employs a real estate broker to find a purchaser for certain real estate upon certain terms, and the broker secures such a purchaser and the sale is not completed because of the fault or inability of the party so contracting with the broker, then the broker would be entitled to recover. This doctrine is applied in cases such as where the party so contracting with the broker does not own the property or where there is a defect of title. 202 N. Y. Reports, p. 293; 202 N. Y. Reports, p. 423; Vol. 19, Cyc., pp. 246-7-8, etc.; Vol. 4, Ruling case Law, Section 51; 41 N. Y., p, 477.

The broker has a right to rely upon the presumption that the party contracting with him has the ability to perform the contract and furnish a title to the prospective purchaser.

This rule is well stated in the ease of *Arnold*v. *National Bank of Waupaca,*126 Wis. Reports, page 368, namely:

> “It is entirely clear, as already stated, that, if an individual employs an agent to find a customer for certain lands, he becomes liable for the agreed compensation, whether he owns them or not, although he may have acted on the mistaken supposition that he had title. He impliedly represents that he does own them.” See also 16 Oklahoma Reports, p. 308.

In the case of *Martin*v. *Ede*in 103 Calif. Reports, at page 160, the following rule is announced in the syllabus viz:

> *484“Under a written authority to a real estate broker to obtain a purchaser for land at a stated sum, within a specified period, for an agreed commission, in order to entitle the broker to recover the commissions agreed upon, it is only necessary to show that, in pursuance to the employment, and within the time specified therein, he found a purchaser ready and willing to purchase the property upon the terms specified in the authorization.

> ‘ ‘ A real estate broker has nothing to do with the title or ownership of the property, and his knowledge as to the title, or the equitable estate of a third person therein, is of no consequence; and his right to the compensation contracted for does not in any way depend on the validity or invalidity of the defendant’s title to the property.”

The judge, in announcing the opinion of the court, says:

> “To entitle plaintiff to recover his commissions under the agreement, it was only necessary to show that in pursuance of his employment, and within the time specified therein, he found a purchaser ready and willing to purchase the property on the terms specified in the authorization. This he did beyond dispute.

> “With the title or ownership of the property he had nothing to do, and his knowledge as to the title or the equitable estate of Josephine Cory therein was of no consequence. These were questions for the defendant to determine when he made the agreement.

> “It is a matter of common knowledge that, in the business world, men do frequently- obtain what 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.

> “Brokers sell tons of wheat for future delivery on account of principals who do not or may not own a kernel of that commodity; yet in the absence of law prohibiting knowledge of the non-ownership of their principals does not defeat their right to recover.

> “A may possess such knowledge as justifies him in this 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 ease of failure to secure title to the thing he has authorized to be sold, he can not be heard to complain of the result of his own folly or lack of foresight.

> “If A is employed by B to labor at a monthly stipend upon land which they both know B does not own, and the services are *485performed in consonance with the contract,- a recovery can not be defeated by such knowledge on the part of A. ’ ’

If the correct rule in such cases does not favor the broker to the extent announced in the above case, nevertheless it does not appear from the petition in the case at bar that plaintiff had knowledge that the defendant would be unable to convey or secure the conveyance of the property in question to the prospective purchaser.

It does appear from the petition that the plaintiff knew that the defendant merely owned a one-fourth interest, but nevertheless we think the plaintiff had a right to assume that the defendant had or would secure authority from his co-tenants, which would enable him to carry out the provisions of the contract which he himself made with the plaintiff, and we also think the plaintiff had a right to act upon the assumption that the defendant had or would secure from his co-tenants authority to carry out the contract if a purchaser was secured upon the terms specified in the contract.

There are some cases which hold that where a broker has knowledge of defective title, and the sale is defeated because of such defect, the broker can. not recover, but without expressing any opinion upon that question, we think the same would be a matter of defense. 16 Oklahoma Reports, 308.

We have carefully considered the authorities cited and have also examined a number of additional authorities relating to the subject of brokers’ commission, but as there is such a difference in the terms of employment many of the cases so examined are of no special benefit in determining the rights of the parties in the case at bar.

We think the plaintiff has stated a cause of action in his petition and that the demurrer should have been overruled.

The judgment of the lower court will therefore be reversed and cause remanded.

Allread and Ferneding, JJ., concur.