Platt v. Francis

• Decision Date: 10 December 1912
• Citation: 247 Mo. 296,152 S.W. 332
• Parties: PLATT et al. v. FRANCIS et al.
• Court: Missouri Supreme Court

152 S.W. 332

247 Mo. 296

PLATT et al. v. FRANCIS et al.

Supreme Court of Missouri.

December 10, 1912.

Rehearing Denied December 31, 1912.

1. PRINCIPAL AND AGENT (§ 100) — POWERS OF ATTORNEY — PLEDGES.

A power of attorney, giving a son the right to "sell and dispose" of stocks and bonds standing in his mother's name as he should "think best," did not authorize him to pledge such securities as collateral for his own obligations.

2. PRINCIPAL AND AGENT (§ 164) — RATIFICATION OF AGENT'S ACTS.

An agent's act in pledging stocks of his principal as collateral for his own obligations can be ratified, and it makes no difference that the act is ratified to protect the good name of a son, since anything can be ratified that can be authorized, and an agent can be authorized to deal with his principal's stocks and bonds in his own name.

3. PRINCIPAL AND AGENT (§ 100) — RATIFICATION BY AGENT.

A special agent to look into the dealings of his principal's son's unauthorized disposal of stock can ratify such acts and bind his principal, especially where the principal received the money growing out of such unauthorized transactions with knowledge, or with the knowledge of the agent, whose knowledge is the principal's knowledge.

4. STIPULATIONS (§ 14) — CONSTRUCTION — "GOOD FAITH."

A concession that brokers received plaintiff's stock in "good faith," as collateral for personal obligations of her son, under a power of attorney to the son, means that a business man might innocently take the terms of the power as to give him leave to deal with the stocks at his will, and is an admission of absolute honesty.

Brown and Kennish, JJ., dissenting.

In Banc. Appeal from St. Louis Circuit Court; Warwick Hough, Judge.

Action by Elizabeth W. Platt and others against David R. Francis and others. Judgment for plaintiffs, and both appeal. Reversed.

I. H. Lionberger, of St. Louis, for plaintiffs. A. & J. F. Lee and Morton Jourdan, all of St. Louis, for defendants.

GRAVES, J.

Plaintiffs, who are the widow and all the children of Henry S. Platt, deceased, except Charles R. Platt, sues 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 Bros. & 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." The estate was duly administered upon in the probate court. Charles R. 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 republic 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 R. Platt as trustee for his brother, Richard 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 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 R. Platt each had a key. The petition charges that Charles R. Platt wrongfully hypothecated these securities to Francis Bros. & Co., who sold such securities and appropriated them to their own use.

It is conceded in the printed record that Francis Bros. & 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 R. Platt began speculating in stocks and bonds. His business was done through Francis Bros. & Co. as his agents. For a time he was in a way successful, but the market dropped, and he became pressed in his account with Francis Bros. & Co. In this situation, after pledging what he had of his own, he went to his mother and got her to indorse these certificates of 100 shares each of National Lead preferred stock. At that time he told her that he was speculating, and was "in the hole." This was May 9, 1901, and this stock is a part sought to be recovered for in this 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 R. 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 where of I have hereunto set my hand and seal at the city of St. Louis, the 25th of June, 1901. [Signed] 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 R. Platt undertook to hypothecate some of these securities after the deposit of the National Lead preferred stock, and one of Francis Bros. & Co. suggested that, inasmuch as the stock was in Mrs. Platt's name, there should be a power of attorney, and the power of attorney in question was afterward 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 Bros. & Co. as collateral for his individual indebtedness. Suffice it to say at this point that Francis Bros. & 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.

1. Defendants Francis Bros. & 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 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 terms. 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...