EDITORIAL COMMENT

BULGARIA AS A REAL MOSES

The Bulgarian Government has introduced a bill in the Sobranje that will warm the heart of every consumer of foodstuffs in the United States, of whom there are still very large numbers. The bill provides, according to the Associated Press, that profiteers in food shall be subject "to public beatings, confiscation of their property and permanent disbarment from business. * * Judgment of what constitutes profiteering or illegitimate speculation is placed in the hands of the communal councils."

This distinctly is the proper method of dealing with offenders who vio late every rule of humanity in their greed for gain. No fussing with the courts and appeals, but just telling the petty profiteers what is what. We are lost in golden reveries of what might be done with food profiteers in parts outside the Balkan Peninsula. The Bulgarians are not Turks now, as Edward Freeman will tell you in his paper on race and language, but they are able-bodied Turks in action when it comes to dealing with a heartless, cruel, scoundrelly squeeze of this sort and we almost wish that the late Mr Stambulisky had sent us over a committee who could show us how to deal with these gentlemen in a really workmanlike and satisfactory way.

DRY LAWS AND NATIONAL RIGHTS

The vast reach of the recent United States Supreme Court decision forbidding foreign ships that touch American shores to carry any liquor even under seal goes far beyond the alcohol question. If one country can, in a one sided way, interfere in the shipping relations of other countries, by means of provisions which apply within the territory under the naval jurisdiction of the former country, the door has been opened to each and every country enforcing each and every regulation it chooses to promulgate, on each and every other country, under the penalty of all the other countries being excluded from its ports. For instance working hours or disciplinary points may form the subject of such laws, and soviet Russia could quite consistently order all foreign ships to stop, in order to establish a four hour workday and enforce the soviet constitution on board of those ships within the territorial waters of Russia.

While the United States has the full judicial and moral right to decree that not a drop of alcohol shall pass through on foreign ships landing in America, yet to go beyond this point and exclude ships which are following the laws of their own countries, when such laws differ from the American ones, means chaos in international relations.

The seizure of the liquor stores of the British ship Berengaria in New York harbor raises in an acute form a question of perennial difficulty, showing at the same time how great is the discrepancy in the views of international law taken by different states. The right of the territorial sovereign over merchant vessels in his waters has arisen for consideration chiefly in regard to jurisdiction over criminal offences committed on board. Thus, in the cases of the Sally and the Newton (see Westlake, vol. I, p. 261), which were private vessels of the United States in French ports, the French authorities claimed, in the face of the protests of the United States Govern

on

ment, jurisdiction over the vessels in respect of offences committed board. Here the United States is found asserting the right of the flag. On the other hand, in the later case of Wildenhas, 120 U. S. Reports, I, the Supreme Court refused to deliver to his consul on habeas corpus a Belgian who had killed a fellow seaman on board a Belgian steamer. The case would seem to be a fortiori where the offence committed is against specific local legislation passed by the territorial sovereign, who is entitled to see his law observed within his jurisdiction. In criminal matters, the British Government has made similar claims to that of the United States (see Reg. v. Cunningham, reported in Bell's Crown Cases, p. 86). In this case three American mates of an American vessel, anchored at Penarth Roads in the Bristol Channel, murdered a fellow seaman on board. They were tried and convicted at Glamorgan Assizes, and there is no record of any protest by the Government of the United States.

SHAM DEMOCRACY

If it is true that the lesson of history is that nations and men learn nothing from history, there are plenty of people who have not given up hope where they think the historic parallel suits them. A New York maga.

zine devoted considerable space recently to an editorial setting forth not merely the success, but the permanency of the "democracies" of Greece and Rome. Its arguments were based upon two assumptions, both wrong. One of them was that anything constitutes a democracy where the ruler is not a hereditary monarch. The other was that the democracies of Greece and Rome were based upon universal suffrage, or something like it.

This is not a case of failure to learn anything from history. It is a case of knowing nothing about the history discussed. It is true that a form of government without a monarch obtained in Rome for something like four centuries between the last of the Tarquin kings and the first of the emperors who followed Julius Caesar shortly before the Christian era. But both the Greek and Roman governments were based upon slavery. All the heavy work and much of the skilled work, which is the greatest problem of democracy today, was done by slaves whose prices varied with their technical ability. There were no unions and the slave had no rights, even those we are accustomed to call inalienable.

The result was a government far less democratic than that of our Southern States before the Civil War, with a parallel condition of slavery. History has called those Southern state governments aristocratic, and anybody who will read Mommsen will find that the Roman government was much more aristocratic, even when in the last half century before the Caesars, the demagogue was so greatly in evidence and so powerful in rule. But he never interfered in the interest of the slaves. Their protection con

sisted only of laws to conserve their economic value. Simon Legrees were scarce in the South, whatever Harriet Beecher Stowe may have said, and the man who abused a valuable piece of property was effectually condemned by public opinion.

REAL ESTATE BROKERS'

COMMISSIONS

By Oscar J. Smith of the New York Bar.

A broker is entitled to a commission when,1 and only when,2 he is the procuring cause of the sale,3—a question of proximate causation.4 Since that is a question of fact,5 subject to guiding rules of law laid down by the court, close and seemingly conflicting cases are bound to arise. Thus, although ordinarily it is not enough that the broker merely introduce the purchaser to the principal, it is easily conceivable that introduction might be sufficient. Although an actual sale might seem necessary, nevertheless in the absence of express provision to the contrary it is settled that the broker has earned his commission when he has procured a contract of sale," or "found"10 purchaser who is willing and able to buy on the principal's terms.11 It is immaterial usually that the contract is not ultimately performed.12

a

In a line of cases the principal, ignorant of the intervention of a

1 Gelatt v. Ridge, 117 Mo. 553, 23 S. W. 882 (1893); Lloyd v. Matthews, 51 N. Y. 124 (1872).

2 Sibbald v. Bethlehem Iron Co. 83 N. Y. 378 (1881); Jackson v. Parrish, 157 Ala. 584, 47 So. 1014 (1908).

3 There is no quasi-contractual recovery for work and labor because the parties intend that there shall be no compensation unless a bargain is completed. Mere strenuousness is unavailing. McCloskey v. Thomspon, 26 Misc. 735, 56 N. Y. Supp. 1076 (1889); Sibbald v. Bethlehem Iron Co., supra.

4 See Bowstead, Agency, 6 ed., 195. Consistent with the fact that there may be more than one proximate cause, the principal may be liable to two brokers for the same sale. Crilly v. Roung, 152 Ill. App. 72 (1909).

5 Rounds v. Alee, 116 Iowa, 345, 89 N. W. 1098 (1902). See Walker, Real Estate Agency, 2 ed., § 746. It is to be noticed that many appellate decisions merely affirm the reasonableness of the result below. See Mansell v. Clements, L. R. 8 C. P. 139 (1874); Lumley v. Nicholson, 34 W. R. 716 (1866).

6 See Thayer, Evidence at Common Law, 183 et seq.

7 See Brandon v. Hanna (1907 2 I. R. 212, 233.

8 Smith v. Sharpe, 162 Ala. 433, 50 So. 394 (1909).

54 Pa. St. 394, 397 (1867).

9 See Gross, Real Estate Brokers, § 117.

Tenn. 569 (1888).

10 See Mecheim, Agency, 2 ed., § 2431.

See Earp v. Cummins,

Contra, Parker v. Walker, 86

11 Wray v. Carpnter, 16 Col. 271, 27 Pac. 248 (1891); Riggs v. Turnbull, 105 Md. 135, 66 Atl. 13 (1907); Butler v. Baker, 17 R. I. 582, 23 Atl. 1019 (1892); McFarland v. Lillard, 2 Ind. App. 103, 28 N. E. 228 (1891); Humphries v. Smith, 5 Ga. App. 342, 63 S. E. 248 (1909). See note 12, infra.

12 Thus, where the fault lies with the principal, through misrepresentation, lack of title or wrongful refusal to go on, the broker's right to commissions is not prejudiced. Sturgeon v. Culver, 87 Kan. 404, 124 Pac. 419 (1912). The same should be true if the purchaser refuses to go on, since the principal still has a contractual right. Roche v. Smith, 176 Mass. 595, 58 N. E. (1900), Moore v. Irvin, 89 Ark. 289, 116 S. W. 662 (1909); Scully v. Williamson, 26 Okla. 271, 108 Pac. 395 (1910). As before intimated, the rule is generally stated that the purchaser must be able to buy. It is submitted that ability is irrelevant if the contract is actually made, since the principal should determine that fact before closing the contract. Wray v. Carpenter, supra; Ward v. Cobb, 148 Mass. 518, 20 N. E. 174 (1889); Francis v. Baker, 45 Minn. 87, 47 N. W. 452 (1890). But see Snyder v. Fidler, 125 Iowa, 378, 101 N. W. 130 (1904); Riggs v. Turnbull, supra; Butler v. Baker, supra. More accurately, then, the rule is that the principal may refuse to contract with a purchaser who is not able to buy, without subjecting himself to liability for a commission.

troker, sold to a purchaser at a figure reduced by the approximate amount of a broker's commission which he believed he was saving. It is generally held that the broker is entitled to a commission.13 In a recent case14 B procured a customer C, who was unable to agree on terms with the principal. C thereupon sent around a dummy, who in the guise of a direct purchaser secured a contract at a lower price. The dummy, still unrevealed as such to B and the principal, thereafter assigned the contract to C, to whom the land was conveyed. The court held, reversing the lower court on the question of fact, that B was not the procuring cause.

The decision proceeds on the theory that the "sale" was to the dummy, and that C's rights became operative solely through the assignment. Conceding this arguendo, there would still seem at least reasonable grounds on which a court could hold on the question of fact that B was the procuring cause of the sale to the dummy. But in any case, C was entitled as undisclosed principal to full rights under the contract, regardless of and prior to the actual assignment.15 Thus, B is entitled to the commission as the procuring cause of a sale to C,16 and on the basis of the cases holding liable a principal ignorant of the broker's procurance-even where the sale is at a reduced figure on that account17—it will not aid the principal that he may have sold at a lower figure due to the supposed absence of a broker. These cases clearly reach the correct result, since the principal's knowledge is immaterial on the question of proximate causation of the sale.18 There is, however, ample protection for the principal. If C is fraudulent in inducing the sale by the representation that no broker is involved, the principal may refuse to convey,19 or, where the conveyance has been executed, he may rescind it together with

13 Hight v. Marshall, 124 Ark. 512, 187 S. W. 433 (1916); Bound v. Simkins, 151 S. W. 572 (Tex. Civ. App., 1912); Lane v. Cunningham, 171 Mo. App. 17, 153 S. W. 525 (1913); Sussdorff v. Schmidt, 55 N. Y. 319, 327 (1873); Lloyd v. Mtathews, supra. Contra, Quist v. Goodfellow, 99 Minn. 509, 110 N. W. 65 (1906); Fawley v. Sheldon, 180 Iowa, 795, 163 N. W. 686 (1917). Iowa allows recovery if the sale was ata the price quoted to the broker. Rounds v. Alee, supra. Cf. McDonald v. Boeing, 43 Mich. 394, 5 N. W. 439 (1880).

14 Resky v. Meyer, 119 Atl. 97 (N. J., 1922). For the facts of this case, see Recent Cases, infra, p. 880.

15 Taintor v. Prendergrast, 3 Hill (N. Y.) 72 (1842); Ford v. Williams, 21 How. (U. S.) 287 (1858).

16 Failure to disclose that the nominal purchaser is merely an agent will not affect the broker's right to commission, if the undisclosed principal or the agent is financially able to carry out the contract. Lawler v. Armstrong, 53 Wash. 664, 102 Pac. 775 (1909).

17 See note 13, supra.

18 See note 13, supra.

19 See Clark, Equity, § 159; Tiffany, Agency, § 282. But if he does convey, knowing of the fraud, he may not rescind. See Clark, op. cit., § 393.

the previous contract.20 Such action would necessarily avoid liability for a commission.21 In the alternative the principal may have an action of deceit against C.22 If the broker is fraudulent, he clearly cannot recover commission.23

Since a broker who fails in his efforts to consummate a contract of sale is not entitled to a commission when the principal later sells by his own efforts, 24 the best ground upon which to support the principal case is that the agency had expired.25 But the facts on this issue would not seem sufficiently clear to warrant a reversal of the lower court.26

20 Panama, etc. Co. v. India Rubber Co., 10 Ch. App. 515 (1872); Condit v. Blackwell, 22 N. J. Eq. 481 (1867); Brett v. Cooney, 75 Conn. 338, 53 Atl. 729 (1902). Cf. Robinson v. Richards, 209 Mass. 295, 95 N. E. 790 (1911). See 2 Pomeroy, Equity Jurisprudence, 2 ed., § 899.

21 This does not conflict with the principle that where an agent procures a purchaser willing and able to buy on the seller's terms he is entitled to a commission regardless of ultimatae performance. Securing for the seller a purchaser, not at his desired net price, but at his desired net price minus a commission, is not securing a purchaser on the seller's terms.

22 See 2 Mechem, Agency, 2 ed., §§ 1995, 1996. But if the principal elects to rescind he may not have an action for deceit, at least in the absence of special dainage. See 3 Williston, Contracts, § 1528.

23 Jeffries v. Robbins, 66 Kan. 427, 71 Pac. 852 (1903), See Walker, Real Estate Agency, 2 ed., § 314.

24 Earp v. Cummins, supra; Jackson v. Parrish, supra; Corse v. Kelly, 80 Kan. 115, 101 Pac. 1016 (1909); Tracey v. Gilman, 161 Ky. 513, 171 S. W. 153 (1914). See J. K. F. Cleave, "Letting and Subsequent Sale: Estate Agents' Commissions," 33 L. Mag. & Rev. 48.

25 Several cases seemingly in conflict with the principles herein approved are explainable on the ground of a termination of the agency. Goldstein v. Walters, 15 Daly, 397, 7 N. Y. Supp. 756 (1889); Stone v. Kreis,. 202 Ill. App. 43 (1916); Tracy v. Gilman, supra. But the mere fact of termination of the agency will not defeat the broker if he is nevertheless the procuring cause of the sale. Termination of the agency, or prior failure of the broker to effect a sale are merely circumstances in determining this question of causation.

26 See in accord with th eprincipal case, Ritch v. Robertson, 93 Conn. 459, 106 Atl. 509 (1919). Contra, Schultz v. Zelman, 111 S. W. 776 (Tex. Civ. App., 1908). Cf. Glade v. Eastern Ill. Mining Co., 129 Mo. App. 443, 107 S. W. 1002 (1908). Compare Locators v. Clough, 17 Manitoba, 659 (1908), with Stratton v. Vachon, 44 Can. 395 (1911).