Platt v. Francis
| Decision Date | 31 December 1912 |
| Citation | 152 S.W. 332,247 Mo. 296 |
| Parties | ELIZABETH W. PLATT et al., Appellants, v. DAVID R. FRANCIS et al., Appellants |
| Court | Missouri Supreme Court |
Appeal from St. Louis City Circuit Court. -- Hon. Warwick Hough Judge.
Reversed and remanded (with directions).
Isaac H. Lionberger for plaintiff-appellants.
(1) The securities sued for belonged to plaintiffs. Charles R. Platt appropriated them in disregard of his trust, and without the knowledge of plaintiffs hypothecated them with the defendants to secure his own debt. (2) The defendants had notice and knowledge of the plaintiff's title. The stock certificates were in the name of Mrs. Elizabeth W. Platt. The bonds were purchased for Mrs. Platt, the life tenant, by the defendants. (3) The power of attorney did not authorize Charles R. Platt to sell or dispose of the securities in his own name and for his benefit, but only in the name, on behalf, and for the benefit of Elizabeth W. Platt. The power did not authorize a pledge of the securities. Warner v Martin, 11 How. 209; Story on Agency, secs. 68, 73, 113; Gerard v. McCormack, 14 L.R.A. 234; Woodward & Co. v. Jewell, 140 U.S. 247. (4) The defendants are not entitled to the status of innocent purchasers for value without notice in the ordinary course of business. (a) They accepted the securities with knowledge of the fiduciary character of the agent, and the owner's right. Bank v. O. V. Co., 70 L.R.A. 312; Lee v. Smith, 84 Mo. 304; Duncan v. Joudon, 15 Wall. 165; Gerard v. McCormack, 14 L.R.A. (N.Y.) 234; Shaw v Spencer, 100 Mass. 389; Bank v. Ins. Co., 104 U.S. 54; Farmington v. Railroad, 5 L.R.A. (Mass.) 849; Lamson v. Beard, 45 L.R.A. 822. (b) They took them upon a past consideration to secure an existing indebtedness. Goodman v. Simonds, 19 Mo. 114; Loewan v. Forsee, 137 Mo. 42; Taft v. Chapman, 50 N.Y. 445. (5) Plaintiffs are not estopped to set up their title merely because they left with Charles R. Platt the physical possession of the securities sued for, since they had no cause to suspect his fidelity and were ignorant of his operations. Knox v. Eden-Musee Co., 148 N.Y. 441; O'Herron v. Gray, 168 Mass. 573; Ballard v. Burgett, 40 N.Y. 314; Kickens v. Teasdale Co., 105 Mo.App. 463; Young v. Brewster, 62 Mo.App. 628. (6) The defendants sold the securities to satisfy Charles R. Platt's debt and appropriated the proceeds to the payment of his debt. They converted them to their own use in disregard of plaintiff's right, and are liable for their value. Swim v. Wilson, 13 L.R.A. 605; Jenney Clarkson Home v. Railroad, 70 L.R.A. 787, 182 N.Y. 47; Ackerman v. Green, 195 Mo. 124; Stevens v. Elwell, 4 Maule and S. 259; Kimball v. Billings, 55 Me. 147; Dusky v. Rudder, 80 Mo. 400; 4 Sutherland on Damages, sec. 1137; Mohr v. Langan, 162 Mo. 494; Tipton v. Burton, 58 Mo. 436; Knipper v. Blumenthal, 107 Mo. 670; May v. Le Claire, 11 Wall. 217. (7) The plaintiffs are entitled to indemnity and are not restricted to the price received at a forced sale in time of extreme depression. The proper measure of their damage is the market price over a reasonable period of time. Comm. Co. v. Railroad, 64 Mo.App. 590; Galigher v. Jones, 129 U.S. 194; Joyce on Damages, secs. 1146, 1177, 1179; Sutherland on Damages, secs. 1119, 1120.
A. & J. F. Lee and Morton Jourdan for defendant-appellants.
(1) The general powers given Charles by the family over the property of the estate, authorized the pledges he made of its property, and Mrs. Platt's children are estopped to deny the powers exercised by him and by her over the property which is the subject of this suit. Harrison v. McReynolds, 183 Mo. 548. (2) The power of attorney gave Charles power to indorse his mother's name, as her attorney, to any transfers made, and made the recitals of the transfer binding on her and the family, and gave Charles power to pledge or sell the stock so indorsed. Lamy v. Burr, 36 Mo. 85; Hill v. Bank, 87 Mo.App. 590; Muth v. Goddard, 28 Mont. 237; Posner v. Bayless, 59 Md. 56; Blaisdell v. Bahr, 77 Ga. 381; Reinhard on Agency, sec. 200. (3) The appellants have ratified all the transactions which Francis had with Charles, by the acceptance, with knowledge, of the proceeds of those transactions. Hartman v. Hornsby, 142 Mo. 368; Bohlmann v. Rossi, 73 Mo.App. 312; Broughton v. Sumner, 80 Mo.App. 386; Suddarth v. Empire Rind Co., 79 Mo.App. 585; Szymanski v. Plassan, 20 La. Ann. 90; Strasser v. Conklin, 54 Wis. 102; Taylor v. Bank, 174 N.Y. 181; Bank v. Metcalf, 29 Mo.App. 384, 40 Mo.App. 494; White v. Saunders, 32 Me. 188; State ex rel. v. Harrington, 100 Mo. 170; Wallace v. Lawyer, 90 Ind. 499; Jones v. Atkinson, 68 Ala. 167; Latham v. Bank, 40 Kan. 9; Thacher v. Pray, 113 Mass. 291; Hazleton v. Batchelder, 44 N.H. 40.
Brown, J., dissents in opinion filed in which Kennish, J., concurs.
OPINIONIn Banc.
-- 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."
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 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 R. Platt each had a key. The petition charges that Charles R. 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 R. 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 successful, but the market dropped and he became pressed in his account with Francis Bro. & 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:
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...
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