Opinion
D.D. No. 82
Decided March 20, 1968.
Attorneys at law — Misconduct — Pledging trust funds — Commingling trust funds — Failing to conduct himself as honest man — Acts warranting suspension.
ON CERTIFIED REPORT by the Board of Commissioners on Grievances and Discipline.
The record supports the following facts found by the Board of Commissioners on Grievances and Discipline. Respondent was attorney for a receivership. The assets of the receivership were a bar and a liquor permit. Respondent procured the sale of the bar and permit for $11,500 and deposited the proceeds of the sale in a savings account in the name of the receiver. Respondent was given a power of attorney to withdraw funds from this receivership account.
Respondent pledged the funds in the receivership account to secure a "pass-book loan" of $10,000 which he then loaned, in the name of the receiver, to his cousin. The cousin repaid the loan to respondent within a few months. On June 9, 1964, the receivership account was closed, and it appears that respondent deposited the receivership funds in the trustee account he used for all his clients.
For one month, from June 9 until July 9, 1964, the receivership funds were not segregated from personal funds of respondent or trust funds of other clients in respondent's trustee account. On 18 days during that period, the trustee account contained substantially less than $11,500, and the difference cannot be explained in terms of expenditures for the receivership. Respondent also made disbursements from the trustee account for personal expenses unrelated to the business of any particular client.
At the insistence of co-counsel for the receiver, who had learned of the closing of the receivership savings account, respondent deposited $11,500 in a new receivership savings account on July 8, 1964. Later, accountings were filed and the receivership was closed with the approval of the Court of Common Pleas.
The Board of Commissioners on Grievances and Discipline found respondent guilty of misconduct in violation of Section 5(a) of Rule XVIII of the Rules of Practice of the Supreme Court by violating his oath of office, Canon 11 (pledging trust funds and commingling trust funds with personal funds), and Canon 32 (failing to conduct himself as an honest man) of the Canons of Professional Ethics. The board recommended that respondent be suspended from the practice of law for an indefinite period.
Mr. Charles E. Ide, Jr., and Mr. Jamille G. Jamra, for relator.
Messrs. Cubbon Rice, Mr. Frank W. Cubbon, Jr., and Mr. Rankin M. Gibson, for respondent.
Respondent contends that his conduct in this case shows very bad judgment but does not amount to professional misconduct. The court is unable to agree with this contention.
Respondent pledged funds held in trust for a client to secure a loan to his cousin. Respondent commingled the client's funds with his own funds and those of other clients. The record supports the inference that respondent took no greater care of the trust funds of his other clients than he did of the receivership funds in this case. We find that the facts show two clear violations of Canon 11, i.e., the unauthorized pledge and commingling of trust funds and a violation of Canon 32 in that he failed to conduct himself as an honest man.
Respondent challenges the board's authority to find that he violated Canon 6 by representing clients with conflicting interests without a full disclosure of his role to both parties. Relator's complaint did not charge such a violation, the complaint was not amended, and no evidence was introduced by relator for the purpose of proving a violation of Canon 6. In reaching our decision we have not considered the finding by the board that respondent violated Canon 6.
The report and recommendation of the board is hereby confirmed, and the respondent is suspended from the practice of law for an indefinite period.
Report confirmed and judgment accordingly.
TAFT, C.J., ZIMMERMAN, MATTHIAS, O'NEILL, HERBERT, SCHNEIDER and BROWN, JJ., concur.