Opinion
November 24, 1953.
January 12, 1954.
Appeals — Review — Attorneys — Disbarment.
1. In a disbarment case the findings of the Special Disciplinary Court, if supported by competent evidence, are of especially persuasive influence. [269-70]
2. It was Held, upon a consideration of the entire record, that the decree of disbarment of an attorney should be affirmed. [256-71]
Mr. Justice MUSMANNO filed a separate opinion, concurring in part and dissenting in part.
Argued November 24, 1953. Before STERN, C. J., STEARNE, JONES, CHIDSEY, MUSMANNO and ARNOLD, JJ.
Appeal, No. 307, Jan. T., 1953, from decree of Court of Common Pleas No. 2 of Philadelphia County, Dec. T., 1952, No. 550, in re John M. Smith, Jr. Decree affirmed.
Proceeding upon petition of Committee of Censors and rule to show cause why respondent should not be disciplined.
The facts are stated in the opinion, by MacNEILLE, P.J., CARROLL and DAVIS, JJ., of the court below, as follows:
Before this Court, constituted pursuant to Rule 200 (f) of the Rules of Common Pleas Courts of Philadelphia County, the Committee of Censors of the Philadelphia Bar Association presents a petition to show cause why one John M. Smith, Jr., the respondent named, a member of the Bar, should not be disciplined in accordance with Rule 200 (f) supra. The petition sets forth various charges involving the professional conduct of the respondent and enumerating complaints by a number of his clients. The respondent's answer admits many of the facts alleged but denies professional misconduct. Following a number of postponements, hearings were held on June 19th and 23rd, 1953, at which time the respondent testified on his own behalf and produced certain of his office records.
The record from the Board of Censors discloses that since 1946, sixteen complaints involving the professional conduct of the respondent have been presented to the Board of Censors and have been disposed of as follows:
Five (5) dismissed for lack of proof of professional misconduct.
Four (4) closed after hearing as warranting no disciplinary action.
Three (3) closed after censure by the Board of Censors.
(The history of these three cases is included in the petition under the names of the complainants, viz: Christianson, Potnick and Sugarman. The facts of these cases were not considered by the Court nor the action of the Board reviewed. They were included only for the purpose of informing the Court of previous action taken by the Board of Censors.)
The remaining cases, four in number, constitute the basis of the petition before the Court and are referred to in the petition by the name of the complainants, viz: Tomaszek, Praczek, Valento and Gilberton Coal Company.
The Committee of Censors concluded that respondent's own testimony as well as that of the witnesses established that respondent had repeatedly failed to remit moneys of his clients for unduly long periods of time and then only after constant demands by these clients and in a number of instances only after direction by the Committee of Censors. The Committee also found that the respondent had mingled his clients' funds with funds of his own; that he had identified funds of his clients as his own and on a number of occasions by this process had appropriated substantial amounts of his clients' money to his own use; that his testimony before the Committee of Censors, notwithstanding many admissions therein, was intentionally false and misleading and the Committee concluded from such findings, the respondent was guilty of persistent professional misconduct and of repeated violations of the canons of ethics.
Discussing separately the four counts which are the basis of the complaint we consider first the matter of Gilberton Coal Company in which it was alleged that the respondent received $5,000 in settlement of several claims of the coal company. The Board found in this matter that the respondent improperly retained funds belonging to this client for a period of approximately six months. The respondent's answer to this was a denial coupled with the statement that the matter was not properly before the Board of Censors. At the hearing before us no testimony on this case was adduced and we have not included it within our consideration.
On the complaint of Peter Tomaszek, Jr., wherein the respondent was charged with having retained $10,766.63, the proceeds from checks which respondent was simply called upon to clear for the complainants, the Committee found that the respondent dealt with this money as his own, failed to keep it apart from funds of his own, appropriated part of it to his own use and purposes; gave false testimony relating to the transaction when he was before the Committee of Censors and induced his secretary to support such testimony by false testimony of her own in order to corroborate him. The pertinent facts necessary to summarize this matter follow: In October 1950, complainant's father came to Philadelphia from Ohio. He and his son went to respondent's office with checks totalling $10,766.63 (the proceeds of the sale of the father's farm) for the purpose of having the checks cashed. There was some discussion whether the father was entitled to a miner's pension and the testimony before the Committee indicated that the respondent had advised them to the effect that the father would not be pensionable if he had assets and therefore the proceeds from the check should be so concealed that no record of the possession of the money would be available. It was not questioned that the complainant went to the Land Title Bank and Trust Company in Philadelphia with the respondent and endorsed the checks, delivering them to the Bank for the purpose of clearing them and that subsequently the proceeds of the checks were paid by the Bank to the respondent. Following this the complainants ran into a series of difficulties in securing their money. The respondent stated that when he received the money he placed it in a deposit box in The Pennsylvania Company in the name of his secretary; that he was unable to obtain the money because his secretary was ill and that as a result of this complaint he secured a power of attorney for access (not joint control) from his secretary. The records of The Pennsylvania Company produced before the Committee of Censors showed no access to this box either to deposit or to withdraw funds. He maintained before the Committee and again before this Court that he had several safe deposit boxes and that the money was positively placed in one of them, although he did not know which one. He at no time was certain of the location of these boxes nor did he offer any records whatsoever to show deposit or description of funds in any safe deposit box during the period involved. His statement that all of his safe deposit boxes except this one were in his own name and that Tomaszek's money was in this one are as unworthy of belief as are all of his statements especially when it appears so conclusively that neither he nor his secretary ever opened the box although he said Tomaszek's money was placed therein and it was from it that he secured it to refund Tomaszek.
The effort of the complainant to obtain his money required him to retain an attorney. In the subsequent negotiatons to this end the respondent made appointments which he did not keep and appointments which he kept but did not produce the money; he offered to settle for $6,000 and the payment of the balance later. Subsequently the entire amount was paid less a $50 fee for collection. His explanation to the Committee of Censors of this transaction and his testimony before us on this point consisted of the most weird and unbelievable statements that can possibly be imagined. When he was pressed he resorted to the fact that so much time had elapsed and his business was so extensive that he could not remember details. There was absolutely nothing in the books that he reluctantly produced to show that he had any records whatsoever of this transaction and his entire explanation of it not only establishes the fact that he embezzled the money of his clients but leads us to the conclusion that he set up the transaction as a means of obtaining for his own use the money of this miner and that the matter of a miner's pension and the concealing of the cash was a figment of his own imagination and the bait he offered to the miner to get his hands on his money.
Another complaint involved the settlement of a claim for insurance for injuries one Joseph Praczek suffered in an explosion in 1947. The claimant, represented by New York counsel, was notified by respondent in September, 1950, that his case had been settled for $7,500 and that there was due him $4,490 from this settlement. This was accepted by Praczek who left the money with the respondent in anticipation of calling for it shortly when he, Praczek, had purchased a house for which he was then negotiating. A short time later he obtained $1,000 from the respondent to use as a deposit on the purchase of a house and subsequently he gave to the respondent a check for $2,635.75 and $300 in cash for him to hold with the original $4,490 he had given him less the $1,000 to make settlement on the property, the time for which was fixed for April 10, 1951. At the time of settlement the respondent was not present but a Mr. Haig of his office went to the settlement without any of Praczek's money and the settlement did not take place. The complainant was thereupon notified that if he did not settle the following day he would be in default and the transaction would be voided. Thereafter he went to the respondent's office every day demanding his money and on one occasion when making a demand he was removed from the office by a police officer who had been called. He was told the respondent was in Rhode Island although he was seen in Philadelphia on April 13th. Subsequently a member of the respondent's office staff gave him $2,000 and later $4,395 additional. Respondent before us denied any intention or knowledge of wrongdoing; he pleaded pressure of business that took him from the City and the fact that his office was not completely manned due to the deaths of some of his associates; denied his presence in Philadelphia on April 13th; but did not give any explanation as to why he sent his associate to the settlement without the complainant's funds that were necessary to complete the settlement. He made no explanation why his office associate gave the complainant $2,000 on one occasion and the balance some days later but simply relied on his sweeping statement that he had done nothing wrong. There is no entry in his books showing a credit balance to this complainant nor is there any record in any bank that this money was held for the account of his client. The testimony before the Committee of Censors of Miss Anderson and Mr. Haig who were called by the Committee and not by respondent corroborated his mishandling of his client's funds and his dealing with them as his own. This, we concluded, accounts for the respondent's failure to call these witnesses before us when full opportunity was extended him to do so following his own suggestion.
Another complainant, R. Frank Valento, consulted the respondent in connection with the purchase of a piece of real estate. It appeared that Valento wanted an extension of time for settlement and was advised by Mr. Smith that this could be done upon the payment of an additional deposit of $1,000. Valento gave his check for this amount payable to John M. Smith, Jr. which was endorsed by him and Maxine C. Anderson, his secretary. When he went to the settlement he was advised that the $1,000 had not been given to the owner of the property but was informed at that time by Mr. Haig that the respondent would take care of the matter and that from then on this complainant was put through the same routine as others to obtain his money — constant telephoning and calling at the respondent's office only to find that he was not available. The respondent in again denying that he was guilty of misconduct offered as an excuse that he was required to go to Atlanta, Georgia, because of the pressure of legal business there; that he himself refunded $1,000 to Valento about the time the complaint was filed before the Committee; that the money was always available for him. In this case as in the others there was no record on the respondent's books to the credit of Mr. Valento, there was no account for him and there was nothing to show the disposition of the $1,000 from the time he secured it until the time he refunded it. It appears in the testimony before the Committee of Censors that the respondent made several efforts to secure an extension of this settlement but never succeeded. He therefore knew that the $1,000 would be required of his client on March 5th but knowing this did not make provision for his client to receive it. The absence of corroboration that the $1,000 was required to grant an extension when apparently it was not has convinced us clearly of the untruthfulness of the complainant and of his cupidity.
On June 30, 1953, while we were deliberating, having concluded the hearings on June 23rd, another complaint was filed by Rose Rodin, a client of the respondent. The Committee of Censors held a hearing on this complaint on July 2nd and recessed until July 6th to enable the respondent to produce certain evidence. The respondent testified on that day but offered no witnesses nor documentary evidence and the hearing was thereupon concluded by the Committee. The Committee then filed a supplemental petition which we heard on July 29th when the respondent filed an answer and appeared with his attorney.
The undisputed facts are that the respondent represented Rose Rodin in a divorce proceeding in connection with which there was a property settlement whereby $4,000 was deposited by the respondent husband in escrow with his attorney, Nathan Miller, Esquire, and the respondent, John M. Smith, Jr., Esquire, to be paid to Rose Rodin after a decree of divorce had been entered. This having occurred, the $4,000 escrow money was paid to Smith as Rose Rodin's attorney on April 17th by Nathan Miller, Esquire, and himself for payment to his client. On the same date he deposited the moneys in his attorney account in The Pennsylvania Company. His balance on that date, after this deposit, was $7,287.62.
When Mrs. Rodin was unable to obtain her money following her constant demand for it, she brought the matter to the Committee of Censors. The hearing before the Committee disclosed that on May 8th Smith gave Mrs. Rodin a check for $4,000 dated May 11th drawn on his attorney account, but according to her he told her not to deposit it for several days because he might be overdrawn. This statement was denied by him notwithstanding his account was then $276.78 overdrawn. Smith denied he was unable to pay the check and stated he had drawn cash out of this same account at various times totalling $3,250 which he had kept for her in a file in his office. He also stated that she insisted on the $4,000 check and when he gave it to her he urged her to take $3,250 in cash which he said he actually offered to her and she saw it. He also asserted that he only owed her $3,250 and that the $750 he wanted to retain was his attorney fee for advice he had given her in the divorce case and in other matters over a period of years.
When repeatedly asked why he gave Mrs. Rodin a check for $4,000 when he knew the money was not in bank, he finally said it was because "she would pay me my fee from other funds that I knew she did have." He stated that when he gave her the $4,000 check on May 8th, dated May 11th, the account was not overdrawn. The bank records, however, show that on May 5th it was overdrawn by $2,276.78 and that on May 11th he deposited $2,000 in that account thereby reducing the overdraft to $276.78. He insisted, however, the account was not overdrawn because the check was dated May 11th and he intended to refund the account so that the check would be good; that he had sufficient money in his filing cabinet to make it good although the only deposits made in the account after May 8th was the $2,000 on May 11th and $400 on May 12th. What he labored to establish was that he drew the money out of the account about May 8th or shortly before so that the check would not be good until his fee was paid. (The money, however, was due since April 17th.) Here again is a confused retreat to falsehood when confronted by the uncontroverted fact of the bank record and his previous sworn to, unbelievable and varied explanation of his own conduct.
His explanation is another weird and unbelievable narrative containing nothing but untruth all the while being consistent with the pattern of his explanations in other cases. In attempting to establish that he was actually drawing money out of the account for Mrs. Rodin and keeping it in his file for her, he said he had been doing so since May 7th until June 30th in various amounts. This statement was likewise deliberately false for the account shows an overdraft on May 5th of $2,276.78 and only deposits of May 11th and May 12th amounting to $2,400, leaving a balance on May 12th of $123.22, which was drawn out by eleven small checks, the last one on June 25, 1953, amounting to $7.16 which closed the account. As there was no corroboration of his statement that he had assembled the $3,250 in his file to pay Mrs. Rodin, he was asked whether he had any record of such an amount in his office, to which he replied, "I didn't enter that in my books." He reasserted that he did not use one cent of the money withdrawn for his own personal purposes, but he failed to produce any one of the twenty-five checks drawn out of this account from May 14th until the date of the hearing, showing to whom they were payable and any endorsements thereon, nor did he offer any explanation as to why he did not stop payment on the check rather than reduce the account to a point where the check would be refused for lack of funds.
Had any of these checks been payable in cash there might have been some semblance of veracity to his statements that they were drawn for the purposes stated but inasmuch as all checks were of varied and uneven amounts and were drawn at different times, this, together with his failure to produce them makes the conclusion irresistible that they were drawn for purposes of his own and, therefore, all of his testimony is deliberately false and intended to mislead the Court.
A summary of respondent's testimony in each case establishes very clearly a confession that he had not remitted monies of his clients when due and when demanded but an avoidance of guilt or misconduct thereby. He offered as an excuse that "I never at any time tried to cheat any client or take money away from him . . . . The tragic thing I was very, very careless . . ." All of his testimony, however, establishes conclusively that he not only failed to remit large sums of money due many of his clients, but that his failure to do so was because he treated those funds as his own. In the several matters before the Committee of Censors and before us, this is clearly evident and it is also evident that he returned monies of his clients only when the Committee took action compelling him to do so.
We note that he had been warned repeatedly by the Committee of Censors in certain cases disposed of by that Committee; that he had accepted this warning and admonition and agreed to follow the mandate of the Committee and abandon his practice of placing his client's money in his own account and of identifying his client's funds as his own money. He also promised that he would open a separate attorney account distinct from his own personal account and in the future would keep all of his clients' funds in such account until properly distributed. Notwithstanding this he never opened such an account but persisted in the same practices for which he had been previously censured and warned by the Committee to discontinue. Why he refused to obey the mandate of the Committee has not been answered by him in the proceeding before us, and this, it seems to the Court, is reflective of an utter and flagrant disregard of his duty so carefully and painstakingly pointed out to him by the Committee of Censors.
By way of defense the respondent offered three exhibits as follows: a 1951 diary, a cash book, and a photostat of an account with one Hugh Roberts. He relied on the diary to corroborate his statement that he was constantly engaged with the business of clients which took him from place to place outside of Philadelphia and to assert this as a reason for his failure to remit monies promptly. When the Court examined the alleged diary in his presence and called his attention to the fact that while being a diary in form, it was simply an appointment book containing on the various pages the names of persons and places written in several handwritings, the respondent agreed that it was not a diary. This piece of evidence contains nothing to show when the appointments noted therein were made, or whether they were kept or cancelled by respondent. Neither the book itself nor any entry therein has any probative value.
The cash book, produced only at the suggestion of the Court, does not reflect one item of debit or credit to a single client. It is absolutely devoid of any entry of receipt from or remittance to Tomaszek. It is an unbalanced book showng many entries in various handwritings reflected the cash received on one side and monies paid out on the other side in the nature of expenses, but not reflecting debits or credits to Smith or to his clients. When asked by the Court if he kept ledger cards, he replied, "I don't know what you mean by ledger cards," although he had previously stated that he kept ledger accounts with his clients and made entires in such accounts. Later on he reaffirmed that he didn't know what a ledger account meant, that he kept a set of books, and subsequently told this Court that he understood "ledger accounts were cards." All of his testimony relating to his books, his knowledge of ledger cards and accounts with clients was a pathetic though arrogant demonstration, of an intelligent person feigning ignorance for the purpose of shielding his own misconduct.
The final exhibit he offered was the one relating to the account of Hugh Roberts. It showed more than three hundred items of credit to the respondent in dated sequence and meticulous order which apparently were gathered in the most part from check book stubs. This account related to the Christianson case, one of the three that had been closed following censure by the Committee, and consequently, there was no necessity for the offer of evidence or testimony. All the entries on this account were made between 1941 and 1945, establishing very conclusively that the respondent has records of some kind which were not offered by him in corroboration either to the Committee of Censors or to the Court. Why he offers something of no probative value and still is unwilling to completely expose what records he has; to call his associates and his secretary to corroborate many of the statements upon which he relies as affecting his innocence or guilt, and to establish the only defense he offers, that of business pressure amounting to carelessness but no wilful act of wrongdoing, makes it quite clear to the Court that in his explanation he is pursuing the same pattern and character of reasoning he must have employed when dealing with his clients.
In our study of the voluminous record made before the Committee of Censors and the examination of the respondent himself we searched without success for some factor of mitigation, in particular that of economic pressure. Our surmise in this respect was completely eliminated by the respondent himself, who, in a second brief, ostensibly written by himself, sets forth the fact that his net fees collected from January 1, 1953, to July 1, 1953, were in excess of $20,000, all of this at a time when he was without legal assistance, except that of his secretary. This compels us to conclude that the egocentricities of the respondent, so evident from all of his conduct, are so deeply inbred in him or have been so fully developed by him that he acts without regard to every basic moral or legal standard and is guided only by some standard of his own emanating from his self interest. His affected superiority in legal matters and his assumption of an air of injured innocence are consistent with the very definite traits of his character which were evident to the Committee of Censors and are apparent to the Court.
We therefore have no other course than to find that he lacks those traits or character which have to do with fidelity, veracity, honesty, and integrity, and that without the mandate of the Act of 1834, imposing a definite duty upon us, which the respondent himself classified as "ineffective, obsolete" and "old fashioned law," we would, nevertheless, as protection to the public and, indeed, to himself, be required to strike him from the roll of this Court, being one who has violated the canons of ethics and his oath of office requiring him to conduct himself with fidelity both to his clients and to the Court. See Moyerman's Case, 312 Pa. 555 (1933); Montgomery County Bar Association v. Rinalducci, 329 Pa. 296 (1938); Degillio v. Board of Governance, 345 Pa. 73 (1942).
Respondent appealed.
F. Raymond Heuges, with him John M. Smith, Jr., in propria persona, for appellant.
Theodore Voorhees, with him Mary E. Groff, for appellees.
This is an appeal from a decree of a Special Disciplinary Court of Common Pleas No. 2 of Philadelphia County, that John M. Smith, Jr. be disbarred from practice at the bar of the common pleas of the first judicial district of Pennsylvania, and striking his name from the roll of attorneys.
The case is before us de novo but the findings of the Special Disciplinary Court, if supported by competent evidence, are of especially persuasive influence: Samuel W. Salus's Case, 321 Pa. 103, 184 A. 69; Moyerman's Case, 312 Pa. 555, 167 A. 579.
After considering the entire record with care, the decree of the learned Special Disciplinary Court is affirmed on the opinion of JOHN MORGAN DAVIS, J., VINCENT A. CARROLL, J., and RAYMOND MacNEILLE, P.J.
I concur in the decision of the majority affirming the decree of the lower court finding the appellant guilty of unprofessional conduct, but I dissent from the penalty imposed.
While the appellant has engaged in practices both unethical and improper, I do not believe that his misconduct merits the severest punishment that can be visited upon a member of the Bar. Disbarment is no less than professional decapitation. It is for a lawyer the ultimate in dishonor. It is the lowest level in the Blackstonian abyss of dispair.
The appellant, whom so far as I know I have never seen, would appear from the record to be a man of considerable ability and tremendous energies. Certainly there should be a way to harness those energies so that they will inure to the best interests of society. I cannot believe that one who has achieved so much in the profession is utterly without hope of redemption.
A limited suspension, in my opinion, would jolt him into a solemn realization of the sacred obligations devolving upon him, as a member of the bar, not to take liberties, even though falling short of defalcation and crime, with property belonging to his clients.
I am not prepared to say what should be the period of suspension, but I feel confident that taking away his office, books and briefcase for five years would provide him with the discipline, punishment and therapeutics necessary to rehabilitate him in ethics, morals and spirits so as to make him again worthy of this most wonderful and honorable profession of the law.