BROKER (Lat. abrocator, perhaps from the Saxon abroccon, to break up, from which is derived abbroaclunent,* the breaking up of goods or selling at retail). The early use of this term designated a retailer of goods, gen erally supposed to belong to another person, and hence applied to any one making a bargain as the agent of another for the sale or purchase of goods. The distinctive char acter of a broker was that he acted in behalf of another and in his name; at least, when the contract came to be consummated, the name of the principal was in the ordinary course disclosed. It was a further incident of a broker's employment that he did not have possession of the goods sold, or receive pos session of the goods purchased, in which respect he differed from a factor. And these principles still apply. But the office of broker has been vastly extended by the increasing exigencies of commercial business.
The most important kinds of brokers are here enumerated. Bill and note brokers negotiate the purchase and sale of bills of exchange and promissory notes. They are paid a com mission by the seller, and it is not their custom to disclose the names of their principals. There is an implied warranty that what they sell is what they represent it to be, and should a bill or note sold by them turn out to be a forgery, they are held to be responsible; but it would appear that by showing a payment over to their principals, or other special circumstances at tending the transaction proving that it would be inequitable to hold them • responsible, they will be discharged. (Edwards, Bills, 291; 4 Duer, 79). The authorities, however, are not in harmony upon this question. (Consult 3 Allen 258; 1 Hill 287; 21 E. C. L. 379). Ex change brokers negotiate bills of exchange drawn on foreign countries, or on other places in this country. It is sometimes part of the business of exchange brokers to buy and sell concurrent bank notes and gold and silver coins, as well as drafts and checks drawn or payable in other cities; although, as they do this at their own risk and for their own profit, it is difficult to see the reason for calling them brokers. Insurance brokers procure insurance,
and negotiate between insurers and insured. Merchandise brokers negotiate the sale of mer chandise without having the possession or con trol of it, as factors have. Pawnbrokers lend money in small sums, on the security of per sonal property, at usurious rates of interest. They are licensed by the authorities, and ex cepted from the operation of the usury laws. Real estate brokers are those who negotiate the sale or purchase of real property. They are a numerous class, and, in addition to the above sometimes procure loans on mort gage security, collect rents and attend to the letting and leasing of houses and lands. Ship brokers negotiate the purchase and sale of ships and the business of freighting vessels. Like other brokers they receive a commission from the seller only. Stock brokers are those employed to buy and sell stock in incorporated companies. The stock brokers are associated together in the larger cities under the name of the Board of Brokers. (See EXCHANGE). This board is an association, admission to membership in which is guarded with jealous care. Membership is forfeited for default in carrying out contracts, and rules are prescribed for the conduct of the business, which are en forced on all members. The purchases and sales are made at sessions of the Board, and are all officially recorded and published by an officer of the Association. Stock brokers charge commission to both buyers and sellers of stocks.