The defendant, doing business under the name of Fennessey, Armstrong, and Company, was a banker, and he had discounted for third parties certain notes made by E. B. Skinner and Company, and he held as collateral three hundred *540and thirteen cases of knit goods manufactured by the makers of the notes. The plaintiff corporation was doing business as a commission merchant, and was the selling agent of E. B. Skinner and Company. The notes not having been paid at maturity, the defendant drew on the plaintiff for the amount due on them. Before the drafts were honored the defendants transferred to the plaintiff the goods which he held as collateral, and executed the contract, a copy of which is annexed to the plaintiff’s declaration. The plaintiff then disposed of the goods, and rendered an account of sales to the defendant, and afterwards brought suit for the balance alleged to be due it under the contract. The single question presented by this bill of exceptions is whether the plaintiff in making up its account had a right to charge the usual-commissions for making the sales, and interest on its advancements and disbursements.
We are of opinion that it had. The contract guaranteed it against loss “ arising from advances, disbursements, or charges made by the said The Foster Black Co., 6 Limited.’ ” The evident purpose of the defendant was to give perfect indemnity to the corporation if the collateral should prove insufficient to reimburse it. Interest on advances and disbursements was a proper charge under the contract, and in determining the sufficiency of the collateral only the net proceeds of the property disposed of are to be accounted for. It can hardly be questioned that the ordinary expenses of turning the collateral into money were intended to be allowed, and such expenses would naturally include the reasonable charges and commissions of selling agents. The defendant knew that the plaintiff was a commission merchant, and was the selling agent of the makers of the notes who manufactured the goods. The contract is to be construed in reference to the situation and circumstances of the parties to it when it was made, and we are of opinion that they contemplated that the goods should be sold by the plaintiff with a right to commissions at the usual rate, and not that other commission merchants should be employed and paid to do the business. See Turnbull v. Pomeroy, 140 Mass. 117.
Exceptions overruled.