Wertheimer v. Talcott (118 A.D. 840, 1907)

Scott, J.:

The plaintiffs appeal from a judgment entered upon the report of a referee. The action is by a principal against his factor and involves the question as to the propriety of certain charges made by the factor.

The plaintiffs from time to time consigned goods to defendant, upon which the latter made advances and paid certain charges, being entitled, by agreement between the parties, to be reimbursed from the proceeds of sale thereof, and also to the payment of interest and of certain specified commissions. On June 26, 1900, there were in the possession and control of defendant goods consigned to him by plaintiffs, upon which he had made advances and paid charges and which he held for sale, and subject to such advances and charges

Defendant, from time to time, insured the goods consigned to him by plaintiffs against loss by fire, in his own name, but for the benefit of himself and plaintiffs according to their respective interests, the premiums therefor being ¡laid by plaintiffs. The goods held by defendant by consignment from plaintiffs were so insured on June 26,-1900, when they were injured by fire. The loss was a very considerable one, and there were a large number of insurance companies involved. Defendant employed a firm of insurance brokers and adjusters to represent and protect his interests and those of plaintiffs, and to take such steps as might be necessary to secure an adjustment, appraisement and payment of the loss occasioned by the fire. He also employed an attorney to advise concerning certain questions of law which appeared to be involved. The proceedings looking to an adjustment of the loss proceeded until the damage to the stock of goods was fixed at $165,407.84, and the actual cash value of the goods insured before the fire at $280,044.97. The insurance companies elected to exercise the option reserved to them by the terms of the policies and took the entire stock of insured goods at the amount appraised as the net cash value before the fire, and paid the amount thereof to defendant, who paid over to plaintiffs or accounted to them for the whole amount received by him, excepting the sum of $14,819.90, which constitutes the amou nt in controversy in this action. The defendant ustifies his retention of this sum as follows:

He claims to be entitled to retain the sum of $7,489.86, being three and one-quarter per cent upon the amount collected from, the insurance companies, as commissions 'agreed to be paid to him- upon the sale of the consigned goods. He claims to be entitled to retain $6,830.44, the sum paid by him to the insurance adjusters employed by him, for their services in procuring .an adjustment of the loss, and he claims to be entitled to retain $500, the expense incurred for the services of the attorney retained by him to advise concerning the claims against the companies. The learned referee has found in defendant’s favor upon each of the disputed items, and this appeal challenges the correctness of his conclusions and raises practically ■ no question of fact; By the terms of -this contract between the parties the defendant is made sole factor and selling agent for plaintiffs; all goods were to be consigned to defendant and sold by him, being invoiced to purchasers in the name of “ James Talcott, Wertheimer & Company Department,” "and defendant was to pay the expense of a bookkeeper to supervise the books and accounts used in the business of the agency; defendant was also to supervise the credits, keep books of account, ledger, 'etc., at his main store, Mos. 108-110 Franklin, street (not the place in which the goods were kept and sold), ahd to furnish the employees, attend to collection of accounts, correspondence and all .other necessary details connected' with the business, (?.