See Disciplinary Rule 5-104(A). See also, Matter of Darrow, 39 A.D.2d 62, 331 N.Y.S.2d 533; Matter of Pacor, 87 A.D.2d 392, 451 N.Y.S.2d 823; Matter of Plewniak, 91 A.D.2d 285, 458 N.Y.S.2d 771. Bankrutpcy Court did not consider the question of whether under New York law, the assignment by an attorney of a contingent fee is against public policy.
Respondent entered into three loan transactions, borrowing $6,500 from Edgar and Miriam Rose in November 1981; $6,000 from George and Lillian Schroder in March 1983; and $7,500 from Elsie Race in February 1984. A total of $16,500 plus interest remains outstanding on the loans and respondent has filed for bankruptcy. In the particular circumstances presented here, we find that respondent violated DR 5-104 (A) by borrowing money from clients and relatives of clients and failing to repay it (see, Matter of Plewniak, 91 A.D.2d 285; Matter of Pacor, 87 A.D.2d 392; Matter of Darrow, 39 A.D.2d 62). The record establishes that respondent requested clients to lend him money when he knew or should have known that he had limited means with which to repay the loans and, with respect to the last two loans, when he was in default on other obligations. The record also shows that respondent failed to disclose those facts to the lenders.
We find it incomprehensible that neither respondent's version of the transaction nor his claim of legal services rendered for Mrs. Schlesinger has any documentary memorial in the record. On the contrary, the record clearly reveals a loan, in the words of both parties, and such a relationship between attorney and client is frowned upon (see, Matter of Plewniak, 91 A.D.2d 285). A fortiori, failure to repay a personal loan is an act of moral turpitude constituting professional misconduct (Matter of Hodes, 97 A.D.2d 308, 311, lv denied 61 N.Y.2d 983; see also, Matter of Riccio, 75 A.D.2d 687). Respondent's issuance of a subsequently dishonored check in payment of this loan was further evidence of professional misconduct (Matter of Guttmann, 54 A.D.2d 70), even if the transaction had been totally unrelated to his law practice (Matter of Hodes, 97 A.D.2d, at p 312). In conclusion, we sustain charge II for three reasons: First, it was unethical, at the very least, to engage in such a transaction with a client.