Opinion
July 10, 1967
In this proceeding to discipline an attorney for professional misconduct upon two charges, the report of the Justice of the Supreme Court (rendered after hearing) to whom this court had referred the proceeding is to the effect that the first charge was sustained, except for one allegation therein, and that the second charge was not sustained. Petitioner now moves to confirm the report as to the first charge and to disaffirm it as to the second charge; and respondent cross-moves to disaffirm the report with respect to the first charge and to confirm the report as to the second charge. The first charge relates to the conduct of respondent as attorney for the complainants. The report contains the following findings of fact with respect thereto: In July, 1964, the complainants retained respondent to represent them in connection with their purchase of a restaurant. Respondent was also the attorney for the seller of the restaurant and prepared a contract while representing both sides. The transaction was consummated on July 31, 1964, at which time the following documents were signed: (a) a chattel mortgage for $16,000 with 60 monthly notes of $266.67 each, executed by the purchasing corporation in whose name title was taken; (b) a confession of judgment by one of the complainants, individually and as president of the corporation; and (c) an assignment of the lease. For his services, respondent was paid a fee by both seller and purchaser. Thereafter, in August, 1964, respondent purchased the aforesaid notes from the seller for $9,500 and took an assignment of the same in his wife's name, together with an assignment of the lease and the confession of judgment. Respondent thereupon offered the notes to the complainants for $12,000, but the complainants were financially unable to purchase the notes. Thereafter, five notes were paid by the complainants. In March, 1965, after the complainants had defaulted in the payment of the notes which were due in February and March, 1965, respondent entered a judgment, based on the confession of judgment in his wife's name, against the corporation and one of the complainants for the unpaid amount of the notes, in the sum of $14,685.85. In May, 1965, respondent took possession of the restaurant and on May 19, 1965, the restaurant was sold by an auctioneer to respondent's wife for $9,500. The restaurant was later sold by respondent's wife to a third party for $9,500. The Justice found, however, that in the transaction involving the purchase of the restaurant, both the seller and the purchaser knew that respondent represented each of them; the petition alleged that the seller and the buyers did not have such knowledge until the deal was closed; that is the allegation which the Justice found not established. In our opinion, the findings as to the first charge are supported by the proof and should be confirmed. We are of the further opinion that respondent acted improperly in placing himself in a position of acquiring an interest in conflict with that of his client and in enforcing such interest against the client (purchasing the promissory notes, together with the chattel mortgage, procuring the confession of judgment, and the subsequent entry of judgment and foreclosure of the mortgage); and that he thereby was guilty of conduct unbecoming an attorney and of impropriety in his relationship with a client. The finding as to the second charge is confirmed. Petitioner's motion is granted with respect to the first charge, and is otherwise denied; and respondent's cross motion is granted with respect to the second charge and is otherwise denied. In considering the nature and extent of the discipline to be imposed, we have taken cognizance of several factors in mitigation, including the apparent absence of fraudulent intent and respondent's previous good record as a member of the Bar. In our opinion, censure of respondent is the appropriate action to be taken. Accordingly, respondent is herewith censured for the conduct of which he has herein been found guilty. Ughetta, Acting P.J., Christ, Brennan, Rabin and Benjamin, JJ., concur.