Towards the end of the prior lesson, we discussed the owner not giving the broker a price to obtain for the real estate of personal property to be sold.
If the owner does not set a price but gives the broker discretion to sell at a price he thinks reasonable, then the owner is bound by such sales price.

Assume that the owner instructs the broker to sell wheat at 80 cents a bushel. The broker is not permitted to purchase the wheat for himself at 80 cents a bushel. If the broker sells the wheat to himself, the acquisition is not binding on the owner. Assume, however, that the broker notifies the owner, even some time after he has obtained possession of the wheat to sell, that he is buying the wheat for his own account and the owner consents. The broker obtains title to the wheat although, and both parties are bound to the sale. When the wheat was taken by the broker to be sold it was still considered to be in the domain of the owner, although situated in the broker's domain. But once the owner tells the broker that he can acquire the wheat, then the domain of the broker acquires the wheat for the broker. The instructions of the owner and the fact that the goods are in the broker's domain combine to transfer title to the broker. If the owner remains silent when the broker tells him he is buying the wheat for himself, then it is for Beth Din to determine if the silence could be taken by the broker as a sign of assent. If thereafter the broker makes a large profit by reselling the wheat to a third party, the entire profit belongs to the broker. However, if the owner does not acquiesce in the broker buying the wheat for his own account, the wheat still belongs to the owner.

In the prior lesson it was stated that many communities frown on the following procedure, yet if done it will be upheld unless there are rules or regulations to the contrary. If the owner tells the broker that he wants 80 cents a bushel and any overage over the 80 cents that the broker will obtain will belong to the broker, such arrangement is binding on both parties, although the broker was silent when the owner gave him these terms.

Assume that the owner pleads that he instructed the broker to sell one hundred bushels of wheat at 90 cents a bushel and the broker pleads that the owner's instructions were to sell at 70 cents a bushel, which was the price he obtained. (Or the owner pleads that he instructed his stockbroker to sell one hundred shares of a certain corporation's stock for $10 a share.

The broker pleads that the instructions were to sell the shares at $9 a share, and it was this price for which he sold the shares.) Regarding the wheat case, the broker takes a Torah oath and he wins the case and needs to turn over to the owner $70, representing one hundred bushels of wheat at 70 cents a bushel. The reason that the broker takes a Torah oath is that he admits part of a claim and denies the balance of the claim. The broker admits he must turn over to the owner 70 cents per share and denies that he owes another 20 cents a share. If the broker had already turned over to the owner the 70 cents per bushel or stated to the owner, "Here, take it" then the broker is absolved from taking a Torah oath and need only take a hesseth oath. (For a full discussion of Torah oaths, see my Volume III, “A Restatement of Rabbinic Civil Law”, especially chapter 87.) The actual true market value is not controlling, since the broker either followed the owner's instructions or he did not. In those situations where the course of commerce will not be affected by the owner rescinding the sale as above stated, he can rescind the sale. There is also a dissent that does not permit rescission on the part of the owner against the third party, since there may be collusion between the owner and the broker to deprive the third-party purchaser of his bargain.

As soon as the owner of the thing to be sold, either personal property and/ or real estate enter in their arrangement, there arises certain responsibilities between the owner and the broker. The broker is to be paid even if there is no formal agreement between the owner and the broker.

Absent agreement, he will be paid for the value of his services or according to the community standards for payments to brokers for the services rendered.

Since the broker is paid for his services, if he loses the item entrusted to him, or the money he receives from the purchaser of the item, he is liable for any losses. He is liable, whether it is stolen, lost, or broken; however. he is not liable for loss caused by an act of God. He is liable even if he will end up not being paid because the item is not sold. The broker’s potential for earning the wages makes him a paid bailee, and he assumes all of the responsibilities of a paid bailee, (a topic that will IYH be discussed some time in the future).

In those situations where the broker must make restitution to the owner as when the object is no longer available as previously stated, the broker will take an oath as to the value of the lost or stolen item and that is the payment he will make to the owner. The oath of the broker must also include an oath that he does not have under his control or possession the item he alleges was stolen or lost. For example, Reuven gave the broker a diamond ring to sell and the diamond fell out of the ring while in the possession of the broker. The broker must take an oath as to the value of the lost diamond and that it is not in his possession or control and he will pay to Reuven the value as stated in the broker's oath. The broker does not have to pay more than the value as stated in his oath.

There is a case related in which a Gentile gave Reuven a ring to have sold for him. Reuven gave a broker the Gentile's diamond ring to sell. The broker lost the ring and Reuven demanded the oath of the broker who swears that the ring is not in his possession nor under his control and that the diamond ring was worth $300. The Gentile pleads that the ring was worth $400. The broker need pay to Reuven only $300.

Assume that Reuven gives a ring to the broker to pawn for him. The broker then pleads that he does not remember where he pawned the ring. The broker is liable to the owner for the value of the ring according to the oath the broker has to take. Not remembering to which pawnshop owner he pawned the ring, the broker is negligent and is liable to the owner for the loss caused by his negligence. Similarly if the broker pleads that he pawned the ring with Shimon and Shimon denies the allegation, the broker is liable to Reuven according to the value of the ring as sworn to by the broker. The broker should have obtained a receipt from the pawnshop owner that he is holding the ring according to the terms of an agreement.

In all of these situations if the broker is unable or unwilling to take the oath, the owner will have to prove the value of the lost article.

If the owner instructs the broker to pawn the ring with a specific pawnshop owner and then the pawnshop owner denies that he is holding the ring, the broker is free of liability since it was the owner who instructed the broker which pawnshop to use.

The subject matter of this lesson is more fully presented in Volume VI Chapter 185 of"A Restatement of Rabbinic Civil Law" by E. Quint, published by Jason Aronson, Inc. and on sale at local Judaica bookstores.
Questions to quint@inter.net.il

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