442 HARVARD LAW REVIEW. stockbroker must at least'^ charge and be paid a certain fixed sum for every transaction he makes on behalf of any other person, and impose a severe penalty for any violation of this provision.^ This sum is called the stockbroker's commission, and is a fixed percent- age of the par value of the securities contracted to be bought or sold. It is usually provided ^ that the stockbroker must at least charge and be paid this commission without any manner of rebate or return, discount or allowance " on all purchases and sales " and contracts which he makes on the floor of the Stock Exchange. The words " purchases and sales " are here used in their Stock Exchange sense, and consequently the customer must in all cases be prepared to pay this commission when the stockbroker has con- tracted to buy or to sell. In practice, however, the stockbroker does not usually require him to pay it until he has fully performed the contract or contracts he has made. For services in performing or for unsuccessful efforts* in trying to contract the stockbroker makes no charge. It is now proposed to consider the engagement ^ of a stockbroker by a customer who wishes a simple purchase or sale of securities to be effected. Since this can only be done in the way and on the terms described every engagement of a stockbroker must be adapted to meet the requirements of this way and these terms. And from this point of view the following matters are requisite to all engagements of a stockbroker to make a simple purchase or sale of securities. 1. Since the stockbroker acts as the agent of the customer, he must be vested with authority to buy or to sell the securities the customer wants in the manner described. This way naturally falls into two parts {a) the contracting to buy or to sell, and (3) the per- formance of the contract or contracts when made, both of which are done by the stockbroker and both of which must consequently be embraced by his authority. 2. Since the stockbroker performs with the money or securities 1 The stockbroker has the right to ask for remuneration in excess of his commis- sion, but it is practically unheard of for him to do so. 2 On a stockbroker's commission, see Dos Passos, 231-235. ^ Cf. Constitution and Rules of the New York Stock Exchange, Art. XLIII. p. 67.
- Dos Passos, 233. This is the general rule respecting brokers of every kind, see
Sibbald v. The Bethlehem Iron Co., 83 N. Y. 378. ^ The Statute of Frauds has nothing to do with the engagement of a stockbroker as agent to buy or to sell securities except in a case of a peculiar engagement not to be performed within a year.
