                    In the Missouri Court of Appeals
                            Eastern District
                                       DIVISION FIVE

PEOPLES NATIONAL BANK, N.A.,            )           No. ED107584
                                        )
      Respondent/Plaintiff-Counterclaim )           Appeal from the Circuit Court of
      Defendant,                        )           St. Louis County
                                        )
vs.                                     )           13SL-CC03334
                                        )
PATRICIA FISH, et al.,                  )           Honorable Nancy Watkins McLaughlin
                                        )
      Appellant/Defendant-Counterclaim )
      Defendant,                        )
                                        )
vs.                                     )
                                        )
U.S. BANK, N.A.,                        )
                                        )
      Respondent/Third-Party            )           Filed: April 7, 2020
      Cross-Claim Counter Plaintiff.    )


                                           OPINION

   1. Introduction.

       Appellant Patricia Fish appeals the judgment entered after a four-day bench trial in favor

of Peoples National Bank, N.A. (PNB) and U.S. Bank (USB), on their separate claims against her

for liability on two promissory notes and related deeds of trust purportedly executed by her or by

her then-husband Brian Fish in her name and secured by her Clayton, Missouri home, property

which Appellant solely owned. The trial court found in favor of PNB and USB based on its finding

that Brian Fish executed Appellant’s signature on the promissory notes and deeds of trust with
Appellant’s “express approval and authority.” Alternatively, the trial court found that even if the

documents were not executed with Appellant’s authority, then Appellant is still liable because she

ratified Brian Fish’s authority to execute those documents in her name because she was fully

knowledgeable of the transactions and she received the substantial proceeds of the transactions.

       The trial court entered judgment in favor of PNB on its first count for liability under its

promissory note for the principal amount outstanding plus contract interest, post-judgment interest,

late charges, and attorney’s fees. The court also entered judgment in favor of PNB on its claim for

judicial foreclosure subject to the interests of USB. As to the claims and counterclaims between

USB and Appellant, the court found in favor of USB on all such matters and entered judgment for

USB for the principal amount remaining due on its promissory note plus interest and attorney’s

fees. Finally, the court outlined the procedures to be followed pursuant to its judgment in favor of

PNB and USB of judicial foreclosure for the sale of Appellant’s home in the event Appellant fails

to pay the foregoing judgments within 20 days of their becoming final.

       We affirm the judgment in favor of PNB and USB because the record strongly supports

the trial court’s conclusion that Appellant ratified Brian Fish’s authority to execute both

promissory notes and deeds of trust.

       2.      Factual and procedural background.

       Appellant purchased her Clayton, Missouri home as its sole owner in 1996 and she

remained the sole owner at all relevant times. At the time the two mortgage loan transactions at

issue before us were executed on May 15, 2009 and May 21, 2009, there were already two

mortgages encumbering Appellant’s home: (1) a first mortgage loan in favor of Bank of America

with a principal balance of approximately $408,000 secured by a deed of trust on the property, and

(2) a second mortgage in favor of Parkside Financial Bank & Trust (Parkside) with a balance of



                                                 2
$550,000 which debt consisted of a $50,000 loan Parkside made to the Fishes personally and a

$500,000 loan Parkside made to St. Louis Sports Partnership, a business owned by Brian Fish and

Mark Militello. While the Fishes and the Militellos were all jointly and severally liable on the

entirety of the Parkside debt which was also secured by Appellant’s home through a second deed

of trust, Parkside agreed to divide the debt and hold the Fishes responsible for $300,000 and the

Militellos the remaining $250,000.

       After falling behind on their loan payments to Bank of America and Parkside, the Fishes

sought to refinance these two mortgage loans and ultimately obtained the two new loans at issue

from PNB: (1) the First Loan, executed on May 15, 2009, and the Second Loan, executed 6 days

later on May 21, 2009. Soon thereafter, USB acquired the First Loan from PNB, while PNB

retained ownership of the Second Loan.

       The documents executed for each loan consisted of a promissory note and a deed of trust

on Appellant’s property. Both promissory notes and deeds of trust bore the purported signatures

of Appellant and Brian Fish. Appellant maintained throughout this litigation that those were not

her signatures but were forgeries by Brian Fish and that she never gave Brian Fish the authority to

sign on her behalf. The parties engaged in substantial litigation on the issue of Appellant’s

signatures and there was extensive testimony on that question at trial.

       The trial court, sitting as the fact-finder, concluded that Appellant did not sign the

documents herself but that Brian Fish signed her name to the documents and he did so with

Appellant’s express approval and authorization. The trial court’s finding in this regard was based

on the circumstances surrounding the execution of the documents including the communications

between representatives of PNB and Appellant. PNB loan officer Thomas Carley testified that he

and Appellant exchanged numerous telephone calls, emails, and facsimiles during the spring of



                                                 3
2009, during which Appellant inquired about the details of the transactions including the tasks and

documents necessary for closing and Appellant expressed urgency that the loan transactions be

closed as soon as possible.

       Carley testified that he personally went to Appellant’s home on May 15 and May 21, 2009

and retrieved from Brian Fish the respective loan documents which already bore the purported

signatures of Appellant and Brian Fish. Carley then took the documents back to his office and

instructed a PNB employee to notarize the signatures even though that employee had no personal

knowledge regarding the signatures. In fact, Carley testified that he never met Appellant in person

before the documents were executed and did not witness Appellant sign the documents nor did he

witness Brian Fish’s signatures.   Carley also admitted that Appellant never told him orally or in

writing that Brian Fish had her authority to execute her signature on the documents.

       Nevertheless, Carley testified that it was his understanding that Appellant travelled

frequently for her job and therefore was often unavailable for in-person meetings. He said that

Appellant was aware of the closing dates of both loans and she was aware that the proceeds would

pay off Appellant’s outstanding and overdue debt to Bank of America and Parkside.

       There was also testimony that from time to time when Appellant was to be out of town for

work and in order to pay for household bills and expenses, Appellant gave Brian Fish blank checks

from her checking account, which she had signed, and authorized him to fill in the name of the

payee and the dollar amount. And sometimes, she left unsigned checks with Brian Fish and gave

him the authority to complete the checks and sign her name to them.

       After the loans were executed, there was considerable evidence as to Appellant’s conduct

and knowledge regarding the loans during the approximately three-year period of time from May

2009 until 2012. Appellant admitted that she made monthly payments on both loans. Appellant



                                                4
admitted that in 2009, 2010, and 2011, she and Brian Fish claimed on their joint tax returns the

deductions for the interest paid on both loans. In 2012, in response to her accountant’s inquiry

regarding the deductibility of the interest on the Second Loan, Appellant responded that she had

made “all the payments on the loan since its inception a few years back” and that it was a personal

loan attached to the house. In 2010, in connection with Appellant’s and Brian Fish’s divorce

proceedings, Appellant listed both loans on her sworn statement of property and expenses. Finally,

there was evidence, including expert witness testimony and Appellant’s own testimony, that

Appellant in connection with the Second Loan signed several documents known as “Change in

Terms Agreements” which contained language that purported to renew the original May 21, 2009

promise to pay.

        3.      Standard of Review.

        This Court will affirm the trial court's judgment in a court-tried case unless there is no

substantial evidence to support it, it is against the weight of the evidence, or it erroneously declares

or applies the law. Ivie v. Smith, 439 S.W.3d 189, 198-99 (Mo.banc 2014) (citing Murphy v.

Carron, 536 S.W.2d 30, 32 (Mo.banc 1976)). Furthermore, a judgment in a court-tried case will

be affirmed on any basis supported by the record. Poger v. Mo. Dep’t. of Transp., 501 S.W.3d 37,

41 (Mo.App.E.D. 2016). In a court-tried case, the evidence is interpreted in favor of the judgment,

and all contrary evidence is disregarded. Reyner v. Crawford, 334 S.W.3d 168, 172 (Mo.App.E.D.

2011). Substantial evidence is evidence that, if believed, has some probative force on each fact

that is necessary to sustain the circuit court's judgment. Ivie, 439 S.W.3d at 199.




        4.      Discussion.



                                                   5
         Appellant brings this appeal in four points relied on. In her first point, Appellant claims

the trial court erred when it found that she had given Brian Fish the authority to sign her name to

the promissory notes and deeds of trust at issue. Appellant relies principally on two statutes, §

432.010, 1 the Statute of Frauds, and § 442.360, a provision pertaining to powers of attorney, for

her argument that PNB’s and USB’s failure to prove that Appellant gave Brian Fish a properly

executed and recorded power of attorney authorizing him to execute these transactions is legally

and factually fatal to the trial court’s finding that Brian Fish had Appellant’s authority. In her

second point, Appellant asserts that the trial court’s holding that she ratified both loan transactions

through her conduct was erroneous because there was no substantial evidence that the

aforementioned statutes were complied with or that Appellant had full knowledge of all facts

material to the two transactions including the terms of the promissory notes and deeds of trust.

And in her third and fourth points, Appellant attacks the trial court’s conditional holding that in

the event we reverse the court’s findings that Brian Fish had Appellant’s authority to execute the

loans on her behalf or that Appellant ratified the loans, then PNB and USB should be granted an

equitable lien on Appellant’s home under applicable equitable principles.

         Under the second point, we find there is substantial evidence in abundance that Appellant

ratified Brian Fish’s authority to execute the two promissory notes and associated deeds of trust.

As a result, we need not reach Appellant’s first point which addresses the trial court’s finding that

Brian Fish had Appellant’s express authority when he executed the loan documents in Appellant’s

name. Likewise, we need not reach the third and fourth points which attack the aforementioned

conditional portion of the trial court’s judgment.

         A.      Appellant ratified Brian Fish’s authority.



1
    All statutory references are to RSMo 2000 unless otherwise indicated.
                                                   6
       We borrow liberally from our Southern District colleagues’ comprehensive opinion in

Wilks v. Stone, 339 S.W.2d 590 (Mo.App.S.D. 1960). Ratification in the context of agency is the

express or implied adoption or confirmation, with knowledge of all material matters, by one person

of an act performed in his behalf by another who at that time assumed to act as his agent but lacked

the authority to do so. Id.; see also, Epps v. Epps, 438 S.W.3d 422, 424–25 (Mo.App.S.D. 2014).

Ratification relates back and is the equivalent of authority at the commencement of the act. Id. It

is the affirmance of a contract already made. Id.

       The existence of agency and the authority of the agent can be and often is implied by proof

of facts, circumstances, words, acts, and conduct of the party to be charged. Id. As applied to the

agency or authority which is created or related back by means of ratification, it may be implied by

any facts and circumstances from which it can be reasonably inferred that the party to be charged

(with knowledge of the facts) acquiesced in and accepted the transaction as his own, or which are

inconsistent with any other intention. Id.

       As to the nature of the facts, circumstances, and conduct that will justify the inference of

agency, no fixed rule can be stated and there is no particular mode by which it must be established

because it depends upon the situation in each individual case. Id. Probably the most certain

evidence of implied ratification is the acceptance and retention of the fruits of the contract with

full knowledge of the material facts of the transaction. Id.

       Since ratification may be established by facts and circumstances, it is a question for the

trier of the fact whether the whole sum total of the facts and circumstances justifies the reasonable

inference that the party charged as principal accepted the transaction as his own. Id. It is not

necessary that each separate act, fact, or circumstance stand on its own as proof sufficient to justify

the inference. Id.



                                                  7
         While PNB’s conduct in connection with the execution of these two loans was

unprofessional and sloppy, the record before us nevertheless abounds with evidence that Appellant

ratified Brian Fish’s authority to execute both loans and deeds of trust in her name. First and

foremost, upon the execution of these loan documents in May 2009, Appellant immediately reaped

the huge financial fruits of these transactions when the new loans extinguished over $700,000 in

outstanding and past-due debt Appellant personally owed and which encumbered her home. And

there can be little doubt on this record that Appellant knew at the time Brian Fish executed these

new loans in her name that her existing debt would be paid off and the encumbrances on her home

removed. Appellant was in repeated contact with PNB’s loan officer regarding the details of the

new loans and urged him to expedite the closings because, it is fair to infer, the existing mortgage

holders were pressuring Appellant regarding the past-due status of her payments on those existing

loans.

         Appellant’s conduct over the next several years further demonstrated Appellant’s intent to

ratify Brian Fish’s authority to execute the loans. Appellant acknowledged her personal obligation

on both loans by making numerous payments from her personal checking account, by executing

the Change in Terms Agreements (at least as to the Second Loan), and by representing to the

United States and Missouri tax authorities and to the family court judge presiding over her divorce

proceedings, that the loans were hers.

         The latter two representations also further satisfy the most important factor from Wilks’

ratification analysis–whether Appellant reaped the benefits of the transactions–because Appellant

benefitted financially by claiming the tax deduction on the interest paid on the loans and likely

benefited in connection with the property distribution made in her divorce case.




                                                 8
       We conclude, therefore, that the record here readily demonstrates that Appellant ratified

Brian Fish’s authority to execute the two promissory notes and the two deeds of trust at issue.

       5.      Conclusion.

       For the reasons set forth above, we affirm the judgment of the trial court.




                                                            James M. Dowd, Judge
Colleen Dolan, C.J., and
Sherri B. Sullivan, J., concur.




                                                9
