Stiers v. Edwards

• Decision Date: 01 October 1931
• Docket Number: 29643
• Citation: 42 S.W.2d 362
• Parties: STIERS v. EDWARDS et al
• Court: Missouri Supreme Court

42 S.W.2d 362

STIERS v. EDWARDS et al

No. 29643

Supreme Court of Missouri, Second Division

October 1, 1931

Foristel, Mudd, Blair & Habenicht, of St. Louis, for appellant.

Albert Chandler, of St. Louis, for respondents.

OPINION

WESTHUES, C.

Plaintiff, in this case, is a resident of the city of St. Louis, Mo. Defendants, Albert N. Edwards, Sidney J. Adams, Robert L. Hedges, Jr., and P. W. Edwards, are members of a copartnership doing a brokerage business in said city, under the name of A. G. Edwards & Sons.

The pertinent parts of plaintiff's petition charged that plaintiff pledged 3,000 shares of the capital stock of the Cities Service Company, a corporation, with defendants, as security for the payment of the purchase price of the stock advanced by the defendants at plaintiff's request; that defendants, without legal authority, so to do, converted said stock to their own use. The gist of the answer, filed by defendants, is the pleading of a contract which defendants claim vested them with authority to sell the stock. Plaintiff, in his pleadings, asked the court to require defendants to account to plaintiff for the stock, the dividends thereon, the increase in the nature of stock dividends, and for the advance in the market value of the stock. Plaintiff alleges the stock to be worth $ 176,250.

The cause was tried before the court on the theory that plaintiff's petition is a suit in equity. Judgment was entered for defendants, and plaintiff appealed. The only assignment of error is as follows: 'The Court erred in rendering judgment in favor of the defendant and against the plaintiff, because such judgment was against the evidence and against the weight of the evidence and against the law and the evidence. It should have been in favor of the plaintiff and against the defendants, as prayed in plaintiff's petition and reply.'

The evidence discloses that the business relations between the plaintiff and defendants commenced in January, 1925, when plaintiff engaged defendants as brokers; at which time plaintiff signed the following letter, or contract, addressed to defendants. This contract is pleaded in defendants' answer as a defense to the suit. It is as follows:

'1/14 1925

'Messrs. A. G. Edwards & Sons, St. Louis, Mo.

'In respect to all accounts which the Undersigned now has, or may hereafter have with you, for the purchase or sale of securities or commodities, or contracts for commodities, it is understood and agreed as follows:

'Only actual purchases or sales are contemplated, and all orders shall be executed subject in all respects to the regulations and usages of the New York Stock Exchange or other exchange or market where executed; and you and your correspondents are hereby constituted agents of the Undersigned for the purpose of consummating all such transactions, and are authorized to make such advances and expend such moneys as may be required in respect thereof;

'All securities or commodities, or contracts for commodities, now held or hereafter purchased by you for, or now or hereafter deposited with you by the Undersigned, are to be held by you as security for the payment of all liabilities of the Undersigned to you, however, and whenever arising, and you are hereby authorized, without further notice to the Undersigned and without regard to whether you have in your possession or subject to your control at the time thereof other securities, commodities or contracts for commodities of the same kind and amount, in the usual course of business to repledge, rehypothecate (either for the amount due you from the Undersigned, or for a greater sum) and loan the same from time to time separately or together with other securities; and you shall not be required to deliver to the Undersigned the same certificates or securities deposited or received, but only certificates or securities of the same kind and amount;

'You may from time to time demand additional security or that the account be immediately taken up and paid, and all amounts advanced and other balances due, with interest at the current rate, and all commissions fixed by the regulations and usages of the exchange or market where orders are executed shall be due and payable upon demand;

'You may employ sub-brokers and shall be responsible for reasonable care in their selection, and may settle contracts and controversies according to the regulations and customs of the exchange where orders are executed;

'Upon failure of the undersigned to comply with any of the provisions hereof, or whenever deemed necessary for your protection, you are hereby authorized and empowered to sell, assign and deliver all or any part of the securities, commodities or contracts for commodities pledged hereunder upon any exchange or market or at any public or private sale at your option, and/or to purchase to cover short sales and without demand for margin, and/or advertisement or notice of purchase or sale, which are expressly waived, and no specific demand or notice shall invalidate this waiver and after deducting all costs and expenses of purchase or of sale and delivery, including transfer and stamp taxes, to apply the residue of the proceeds to the payment of the liabilities of the Undersigned to you, returning the surplus, if any, to the Undersigned; and upon any such public sale you may purchase the whole or any part thereof free from any right of redemption, and the Undersigned shall remain liable for any deficiency.

'All statements of account rendered the Undersigned from time to time shall be taken to be correct unless written notice to the contrary is given you within ten days after the receipt thereof;

'All notices or demands hereunder may be made by depositing the same in writing in the United States mail directed to the Undersigned at the address given below.

Harold C. Stiers,

'[Address] 5533 Lindell Dr.'

Defendants under this contract bought, sold, and exchanged, for plaintiff, from time to time, during the years 1925, 1926, and 1927, stock in various corporations. It is admitted by plaintiff that, if the transaction with reference to the Cities Service stock, now in controversy, is covered by this contract, the defendants had the authority to sell the stock, and plaintiff cannot recover in his suit.

During the month of February, 1927, plaintiff became interested in buying Cities Service stock through a salesman named Salzgeber representing Henry L. Doherty & Co. After some negotiations, Salzgeber offered to sell plaintiff, and plaintiff agreed to buy, 3,000 shares of the stock at $ 56.50 per share. The prevailing price on the stock exchange was $ 57 3/8. Pending these negotiations plaintiff called on defendants, and in particular defendant Hedges, and informed him that plaintiff could buy this stock below the prevailing prices. Plaintiff arranged with defendants to pay Henry L. Doherty & Co. the purchase price of this stock, on the delivery of the stock to defendants. Plaintiff informed the representatives of Doherty & Co. that defendants had agreed to advance for him the purchase price of the stock. On or about the 5th or 6th of February, 1927, Salzgeber, the salesman, and Carmichael the field manager, for Doherty & Co., went to the home of plaintiff to perfect the deal. The agent of Doherty & Co. requested a verification, by one of defendants, of defendants' willingness to advance the funds necessary to buy the stock. Defendant Robert L. Hedges was called and joined the conference. At this meeting it was agreed that defendants advance $ 10,000 as payment on the stock, the balance, $ 159,500, to be paid to Doherty & Co., on the delivery of the stock by it to defendants. The $ 10,000 was to be charged to plaintiff's account. This $ 10,000 was advanced to plaintiff, and plaintiff paid the same to Doherty & Co. on February 7; defendants charging the amount to plaintiff's account. This increased plaintiff's indebtedness to defendants to $ 57,768.74. Defendants, as brokers, at this time held for plaintiff stocks of various amounts of the following corporations: Boyd Welsh Shoe Company, American Ice Company, California Petroleum Company, and Willis Overland Motor Company. On February 16, the 3,000 shares of Cities Service stock arrived from New York. It was delivered to defendants by Doherty & Co. Plaintiff was present when the stock was delivered. Plaintiff indorsed the certificates in blank, thirty in number. Defendants accepted the stock thus indorsed, and defendant Adams prepared the following order, which plaintiff signed.

'A. G. Edwards & Sons

'Private Wire

'2/16/27.

'A....