Platt v. Francis

CRAVES, J. Plaintiffs, who are the widow and all the children of Henry S. Platt, deceased, except Charles R. Platt, sue the defendants for the conversion of stocks and bonds of the alleged value of $134,000. Charles R. Platt, one of the children of the said Henry S. Platt, deceased, is made a party defendant. The other defendants make up and constitute the firm of Francis Bro. & Co. Plaintiffs had judgment below in the sum of $30,177.20, and from this judgment both plaintiffs and defendants have appealed. Henry S. Platt died in the city of St. Louis in the year 1893, leaving a will. He left also a personal estate of about $200,000. This will, after certain specific bequests, thus disposed of the remainder of the property; “All the residue and remainder of my estate, both real, personal and mixed, whether'reduced to possession or in expectancy at the time of my death, together with all moneys on hand in bank, due or to come due, all bonds, stocks, policies of insurance on my life, and from every other source whatsoever, I give and bequeath to my wife, Elizabeth W. Platt, for and during. her life, and after her decease, all that is left of the estate, shall be divided among my surviving children, share and share alike.” — 300 — The estate was duly administered upon in the probate court. Charles E. Platt, who was one of the executors of the will, seems to have been the chief adviser and business agent of his mother and the other children. By consent of all parties the personal property of the estate, or a large part of it, was finally invested in the following securities: 17 bonds of the Eepublic of Mexico, which were unregistered, and negotiable by delivery; alleged to be worth $17,000; • 500 shares of preferred stock of the American Car & Foundry Company, issued to and standing in the name of Elizabeth W. Platt, alleged to be worth $40,000; 60 shares of preferred stock of the American Car & Foundry Company, issued to Charles E. Platt as trustee for his brother, Eichard B. Platt. 570 shares of preferred stock of the National Lead Company, issued to and standing in the name of Elizabeth ~W. Platt, and alleged to be worth $65,000; 103 shares of stock of the Pittsburg Plate Glass Company, issued to and standing in the name of Elizabeth W. Platt, and alleged to be worth $12,000; 60 shares of Franklin Bank stock, issued to Elizabeth W. Platt; value not stated. These were placed in a safety deposit box to which Elizabeth ~W. Platt and Charles E. Platt each had a key. The petition charges that Charles E. Platt wrongfully hypothecated these securities to Francis Bro. & Co., who sold such securities and appropriated them to their own use. It is conceded in the printed record that Francis Bro. & Co. acted in perfect good faith in receiving these securities, and thought they had the right to receive and sell them. It appears that in the year 1900 Charles E. Platt began speculating in stocks and bonds. His business was done through-Francis Bro. & Co. as his agents. For a time he was in a way sue301 cessful, but the market dropped and be became pressed in bis account with Francis Bro. & Oo. In tbis situation, after pledging what be bad of bis own, be went to bis mother and got her to indorse these certificates of 100 shares each of National Lead preferred stock. At that time be told her that be was speculating and was “in the bole.” Tbis was May-9, 1901, and tbis stock is a part sought to be recovered for in tbis action. Later the mother, who was going to Europe, gave the son a power of attorney, which reads: “Know all men by these presents that I, Elizabeth W. Platt, of the city of St. Louis, do hereby make, constitute and appoint Charles B. Platt of said city and State my attorney for me and in my name to sell and dispose of as and upon such terms and at such times as my said attorney shall think best, any real estate, shares of stock, bonds, notes, or other property, securities or investments whatsoever belonging to me, with power in my said attorney to sign my name to any conveyances or transfer to such real estate, stocks, notes, bonds, or other property, security or investments belonging to me, and to sell such things as fully and effectually in all respects as I myself could do if personally present, and I do, for myself, my heirs,, executors and administrators ratify, confirm and agree to ratify and confirm whatsoever my said attorney shall do in my name and for me. “In witness whereof I have hereunto set my hand and seal at the city of St. Louis, the 25th of June, 1901. “Elizabeth ~W. Platt.” All other hypothecations of securities were under this power of attorney and during the absence of the mother in Europe. It should also be stated that Charles B'. Platt undertook to hypothecate some of these securities after the deposit of the National Lead preferred stock, and one of Francis Bro. & Co. sug — 302 — gested that, in as much, as the stock was in Mrs.. Platt’s name, there should be a power of attorney, and the power of attorney in question was afterwards brought in and left with the firm. The good faith admitted is, therefore, to the effect that such firm, under the power of attorney, thought that Charles R. Platt had the right to do what he did do, i. e., assign such securities to Francis Bro. & Co. as collateral for his individual indebtedness. Suffice it to say at this point that Francis Bro. & Co. sold most of the securities above mentioned and applied most of the proceeds of those so sold by them to the individual indebtedness of Charles R. Platt. We are not attempting to detail the amounts in either case, because with the view we entertain as to the law applicable to this case, there is no necessity for more than a general statement as to these matters at this time. Nor is it necessary to go at length into the pleadings. By answer the defendants disclaim liability by way of a general denial, and among other things they plead a ratification of the acts of Charles R. Platt by the plaintiffs. There are other questions in the case upon which the judgment nisi in our judgment could not stand in present form, even if it be conceded that there was no ratification, but with our view upon the latter question we need discuss but two questions in the case (1) the force and effect of the power of attorney, and (2) the question of ratification and estoppel. The latter will call for more facts, which will be given in the course of the opinion. I. Defendants, Francis Bro. & Co., first urge that under the power of attorney they had a right to receive the bonds and stocks as collateral. We do not think this is true. There is no doubt that Charles R. Platt was by that instrument authorized to' pledge these securities in deals for his mother. In other words, the power of attorney is broad enough to authorize him — 303 — •to pledge such securities as collateral for obligations he might have contracted for his mother, as well as for ■obligations which the mother herself had contracted. The evidence shows that he was the business agent of the mother in a very broad sense of the term. He sold and bought securities for her. He received and deposited money for her. He checked upon her account in such deals. So that it might well be said that had he under this power of attorney, when coupled with the other authority in business matters which he possessed, bought stocks and bonds on his mother’s account, he could have legally pledged the securities in question as collateral in such deals. But that is not in this case. He was buying and selling upon his own account. The obligations incurred were his own obligations, and neither his agency nor this power of attorney was broad enough to cover such a transaction. His power and right to pledge the securities here involved must be gathered from the power of attorney, and to our mind that instrument when read from its four corners only authorizes him to act in matters in which the mother herself was the interested party. It is not broad enough to authorize him to convert the mother’s property to his own use, as he undertook to do. This contention is therefore ruled against the defendants. II. We pass now to the question of ratification. Mrs. Platt could have authorized the son Charles B. Platt to have bought and sold securities in his name for her. Had she done this the pledges under this power of .attorney would have been good. They would have been pledged for her use and benefit. Whatever this mother might have legally authorized done, she can ratify. Bhe could have authorized the use of these securities in the son’s adventures! She could have authorized trading by the son for her, but in his name. That she could have authorized these things is hornbook law. — 304 — That what she could have authorized to he done for her, can be ratified by her, although done without express authority, is likewise hornbook law. With this-premise let us view the further facts of this case. During the administration of the estate Charles R. Platt was the dominant factor. lie was given full rein after the estate was closed in the probate court. The business of the mother and the other heirs was managed by him from that time on to the eventful close of his. career, financially speaking. He sold securities belonging to the estate and purchased others in lien thereof. ■ Much of this business was done through. Francis Bro. & Co. It is true that the purchases were placed in the name of the mother or some heir, and further true that the funds received by him for sales of securities were deposited to the credit of the mother. But it remains a fact in the case that Charles R. Platt, by his acts, acquiesced in by all the plaintiffs, handled the funds of the mother, or the funds of the estate if they should be so called, practically as if they were his own, so far as the parties with whom he dealt were concerned. These things, however, are only side lights and do not go to the meat of the question. Reverting to the direct issue we find that on December 6,1903, after nearly three years' of speculation, Charles R. Platt confessed to his mother just what he had done. This was in the forenoon of that day and Mr. Lionberger, the present attorney for the plaintiffs, was called in that night, although it was Sunday. As to the conversation with his mother the son Charles R. Platt detailed the situation to J. D. P. Francis in a conversation on December 18 following. Mr. Francis asked young Platt, ‘ ‘ Charlie, what does your mother think of the status of your account and these general transactions!” Platt replied, “Well, I had a talk with her on Sunday and at first she was very much shaken up and overcome, but finally she became reconciled to it,” and that the mother further said, “Well, it is — 305 — all right, Charlie, we will have enough left anyhow.” After this confession of Charles R. Platt .to his mother Sunday morning and after the employment of Mr. Lionberger and the second confession to him on Sunday night, matters took a rather prolonged course, unless it he upon the theory of a ratification of Charles R. Platt’s acts, hy all parties interested. That the parties plaintiff and their agent and representative were fully apprised of the facts hy these two confessions,, the evidence in the record leaves no doubt. That all parties knew these securities had been' pledged to Francis Bro. & Co. as collateral to these speculative deals on that date there can he no doubt. At this time Lionberger, the then alter ego of the Platt family, was informed that there were some things with Francis Bro. &■ Co. yet undisposed of, and upon this question the record is clear. As a matter of fact the 103 shares of Pittsburg Plate Glass stock had not then been sold. Platt knew this fact and Lionberger evidently learned all from Platt. Lionherger’s testimony so indicates. But the Sunday conversation as to the state of affairs is not all. On Monday, December 7,. Mr. Lionberger had Charles R. Platt come to his office and bring him the papers connected with the affair. The Pittsburg Plate Glass stock was yet unsold. No notice came from Lionberger, the alter ego of the plaintiffs, to Francis Bro. & Co. No claim that these securities had. been wrongly hypothecated. On Tuesday December 8, 102 shares of the Pittsburg Plate Glass stock were sold and on the same day Lionberger again had Charles R. ■ Platt at his office to obtain all the facts. That he did on the 6th and 7th obtain the facts there can be but little question. The estate had hut few different lands of securities, as hereinbefore indicated. The facts were few and simple and easily related. That young Platt told both his mother and Lionberger that he had been — 306 — speculating through Francis Bro. & Co. and deposited the securities belonging to the estate as collateral and that part of them had been sold to make good his losses, can hardly be denied from this record. This appears not only from what is said, but may be read between the lines throughout. That they were likewise advised that a part of the securities were with Francis Bro. & Co. undisposed of is as certain as the other. On December 12, fifty shares of Cotton Compress stock were transferred from Francis Bro. & Co. to Mrs. Platt, of which stock we will speak further ■later. On December 15, Lionberger had Charles R. •Platt go to the office of Francis Bro. & Co. and close up his account and bring to him all the unused and unappropriated securities used by Platt in his deals. That Platt went to the Francis office at the direction of Lionberger is admitted, and that he directed him just what to do when he got there is the only fair inference to be drawn from the conduct of both parties before and after the visit to the Francis office. Note the conduct. Lionberger told him to go. Lionberger watched him from a near-by building to see that he not only went but that he returned. When he returned Lion-berger for the Platts accepted, received and turned over to the Platts the fruits of the visit. This record can hardly be read without the conclusion that the closing of the deal with Francis Bro. & Co. was directed by the Platts through their agent Mr. Lionber-ger. In law Lionberger’s acts were their acts. If his acts amounted to a ratification of the transaction, his principals are bound. But in this instance they are doubly bound, because they received and appropriated the fruits of that direct visit to Francis Bro. & Co. The knowledge of their agent was their knowledge, so •they received and accepted with knowledge. But the record shows their knowledge outside of Lionberger. They knew on 'Sunday the 6th the whole situation and when they received back the stocks and check of Fran — 307 — cis Bro. & Co. for $1833.15, they must have known that it was a closing up of the deals had by Charles R. Platt through Francis Bro. & Co. It should be borne in mind that the last share of the Pittsburg Plate Grlass stock was not sold until December 14 and Charles R. P'latt was notified of this sale of the last one of the 103 shares on that day. When Charles R. Platt settled with Francis Bro. <& Co. under the very eye of Lionberger there remained undisposed of the 50 shares of Cotton Compress stock for which $2500 had been paid by Francis Bro. & Co.; €0 shares of Franklin Bank stock worth $15,000 and ■cash $1833.15. It is important to recollect on the question of ratification, that this Cotton Compress stock was not stock belonging to the estate, nor did the cash Belong to the estate. Had Platt only turned over to Lionberger the bank stock which had been unlawfully pledged it might be hard to say that there was a ratification of all of Platt’s deals through Francis Bro. -& Co. through which the loss occurred. But that is not ihe case. Here we have $2500 of Cotton Compress stock which formed a part of the Platt deals through Francis Bro. & Co., but which did not belong to the •estate, unless the acts of Charles R. Platt be so ratified as to make these deals the deals of the estate. Nor did the money belong to the estate. It could only "become such in some similar way. The fact that Lion-berger sent Platt over to get what was left and the further fact that he accepted for the Platts what was Brought back to him are potent facts upon the question as to whether plaintiffs, with knowledge, through their lawfully authorized representative ratified the transactions of Charles R. Platt. That ratification was intended at the time is apparent from other facts. First, what the mother said to Charles R. after the shock of the confession had subdued. That remark touches the real situation and the thought of the parties. Listen to it, “Well, it is all right, Charlie, we — 308 — will have enough left anyhow.” In effect, it means you exceeded my authority to you, hut I ratify and adopt your actions, and you now go and bring’ to me all the remains of your deals and we will have enough left. Accordingly her counsel directs the visit to Francis Bro. & Co. and receives the fruits of that visit, and empties them into the lap of the mother. The thought of saving the son’s good name might have been a factor in this conduct of the mother, but we need not speculate. That there was an intention to permit the close of these deals through Francis Bro. & Oo. by Charles R. Platt and accept the results of the same, is indicated by further facts: (1) they fail to notify Francis Bro. & Oo. not to sell the Pittsburg Plate Glass and other stocks; (2) they awaited the sale of the last share of this stock when money would be on hand to clear the deals and with some stock and cash left; (3) they send Charles R. Platt to get what was left, when it could not he done, except upon a closing up of the account; (4) they accept not only what was an asset of the estate, hut they further accepted and received things which were’ the direct outgrowth of the deals, i. e., the cash and the Cotton Compress stock; (5) immediately after the settlement, by written instrument they revoked the power of attorney under which Charles R. had been acting, when if they did not in fact desire to close the deals recognizing the acts of Charles R. they should have, revoked such power of attorney much sooner. As suggested in the brief, why ■ permit this power of attorney to stand until about the very minute marking the close of Charles R. Platt’s deals, and then revoke it, if it was not to say by action, thus far we ratify your acts, but when your settlement is made, we do not want you to act further? Sometime later demand was made upon Francis Bro. & Co. for the stocks and bonds sold,' and in March, 1904, this suit was filed. These are some of the facts which induce us to believe that the plaintiffs have ratified — 309 — and made their own the dealings of Charles R. Platt with Francis Bro. & Co. The case is one largely of fact rather than of law. Bnt for a moment let ns look at the applicable law. ' In Broughton Bros. v. Sumner, 80 Mo. App. 386, Smith, P. J., has so tersely reiterated the hornbook law upon one question here involved, that although hornbook law, we quote it, thus: “He who may authorize in the beginning may ratify in the end. [Bank v. Gay, 63 Mo. l. c. 39; Meehem on Agency, secs. Ill, 112.] If a person who assumes to represent another is in fact the agent of such other, but has exceeded the limit of his authority, he has not thereby conferred any rights against his principal. "When facts connected with the doing of the act are brought to the knowledge of him on whose behalf it was done, he may decide to sanction and confirm and adopt it as his own; or without expressly deciding about it he may so conduct himself that for the protection of innocent third persons, or of the assumed agent himself, the law will presume that he did so sanction and confirm such act and adopt it as his own. In either of these ways he may give effect to what was before unauthorized and without effect. [Meehem on Agency, sec. 110; Bank v. Gay, ante; Bank v. Dunn, 62 Mo. 79; Bless v. Jenkins, 129 Mo. l. c. 659; Chouteau v. Allen, 70 Mo. 290; Kiley v. Forsee, 57 Mo. 390.]” In the case at bar Charles R. Platt was doubly the agent of his mother. He handled and did all her business, and in addition held this power of attorney. It is admitted that Francis Bro. & Co. acted in good faith when under the power of attorney they received the stocks in the way they did. Charles R. Platt evidently thought he could so act under the-power of attorney. But that is not very particular in this case. Mrs. Platt could have authorized Charles R. Platt to do just what he did do. If so she could afterwards — 310 — ratify Ms unauthorized act. And as suggested in the Sumner case, supra, it makes no difference whether she ratifies the acts to protect some innocent third person, or to protect the good name of the son. In tMs case her talk with the son would indicate that his-good name at that time figured some in the consideration. Another hornbook doctrine has been concisely stated by the St. Louis Court of Appeals in the case of Bohlmann v. Rossi, 73 Mo. 1. c. 315, thus: “The principle of the instruction is that a principal can not accept and appropriate the fruits of an unauthorized contract of his agent and then controvert the authority of the agent to bind him. [St. Louis v. Davidson, 102 Mo. 149; Bates v. Spencer, 42 Mo. App. 184; Combs v. Sullivan, 105 Mo. 230; Fahy v. Springfield Grocery Co., 57 Mo. App. 73.]” The instruction embodying the foregoing principle was approved and rightfully approved. If A without authority sells B’s horse, and B accepts the money for the horse, he ratifies the unauthorized act, and is estopped to further question it. We have quoted from these two cases, because the principles reannounced by them are so succinctly stated that we could not improve thereon. As stated before, this is a case turning upon the facts rather than the law. Did Lionberger, the alter ego of plaintiffs, accept the fruits of Charles R. Platt’s unauthorized acts, and did he do it knowingly? These are the questions. That Charles R. Platt 'made full disclosures to Ms mother and Mr. Lionberger is breathed in every circumstance and line of tMs record. There was nothing complicated to learn. There were but five or six different securities involved, and Mrs. Platt was advised that they had all been used, and most of them lost. Where they had been pledged was disclosed. The purpose for which pledged and sold was known. She gave the power of attorney and in law knew its contents. 'She evidently knew that the son was acting under tMs in — 311 — strument. At least snob, is the only reasonable inference from tbe circumstances in evidence. Yet with this knowledge possessed by all tbe parties, young Platt is directed to go over to Francis Bro. & Co., and close up bis deals, and bring to them wbat was left. Tbis be did and this they accepted and kept as tbeir own. Of tbe three items brought back after tbe settlement, but one belonged to Mrs. Platt, i. e., tbe bank stock. Tbe Cotton Compress stock worth $2500 or more were fruits of tbe deals through Francis Bro. & Co. Tbe cash, $1800 and more, was likewise tbe. fruits of these deals. These two items grew out of tbe alleged unlawful pledging of Mrs. Platt’s securities. They were tbe fruits of that unauthorized act. These fruits Mrs. Platt and Mr. Lionberger, her agent, received and kept. They cannot accept tbe fruits of tbe transactions and repudiate tbe transactions themselves. Had they only accepted tbe bank stock tbe case would be different, but they did not stop there. They accepted and kept and now have between $4500 and $5000 of tbe fruits of tbe unauthorized acts. Tbis act upon tbe part of Mrs. Platt and tbe other plaintiffs estop them from now denying tbe authority of Charles R. Platt. Not only so, but they permitted Francis Bro. & Go. to sell a large block of tbeir securities, as stated in other paragraphs of tbis opinion, after tbe parties were fully advised as to tbe situation. Tbis act standing alone might not be sufficient to work an estoppel, but it adds weight to tbe others above detailed. Under tbe law and tbe facts, tbe judgment nisi should have been for tbe defendants, and tbe judgment is therefore reversed and the cause remanded to tbe circuit court with directions to enter up a judgment for tbe defendants. This ruling disposes of tbe companion or cross-appeal of plaintiffs adverse to tbeir contentions and tbis opinion is intended to cover both appeals. Val-liant, C. J., Lamm, Woodson and Ferriss, J.J., concur. — 312 — Lamm, J., concurs in separate opinion, and Valliant, G. J., Woodson, Graves and Ferriss, JJ., concur in his individual views. Brown, J., dissents in opinion filed in which Kennish, J., concurs. CONCURRING OPINION.