PAINE v. STATE BAR OF CALIFORNIA (1939)

This is a petition to review a recommendation of the board of governors of The State Bar that petitioner be suspended from practice for two years.

The charges against petitioner were the making of false allegations in a petition to the probate court for compromise of a claim, and the procuring of a conveyance of property of the estate to another client without adequate consideration. The facts advance in support of these charges were as follows: The decedent, Louis C. Rapetta, died intestate in 1934. His son and only heir at law, Clement S. Rapetta, received letters of administration. Petitioner was attorney for the administrator. The major part of the estate consisted of real property in Santa Cruz county, a certain parcel of which was a dairy ranch. This ranch had been mortgaged in 1931 to Harry Von Bargen to secure a two-year note for $3,700. It was past due at the time of the decedent's death.

Shortly after the issuance of letters of administration, Von Bargen called on petitioner to discuss the obligation. Petitioner asserts that the mortgagee demanded payment, though Von Bargen denies this. Petitioner thereafter consulted another client, Mrs. Theresa Attei, and advised her that the mortgage on the Rapetta property would be a good investment for her. Petitioner then states that he communicated with Von Bargen requesting that he place the note and mortgage in escrow preparatory to Mrs. Mattei's purchase of it; this Von Bargen also denies.

On October 29, 1934, petitioner prepared and filed a petition by the administrator to compromise a claim against the estate. In it he stated that Mrs. Mattei was the holder of the Von Bargen note and mortgage; that she had made demand for payment; and that a compromise had been agreed upon whereby the property would be deeded to her in satisfaction of the mortgage. These statements were not true, for at that time Von Bargen still owned the note and mortgage. The petition also contained a description of the property which included a small parcel not actually included in the mortgaged parcel. The petition was heard, its allegations found true, and the court ordered the execution of a deed of the property described to Mrs. Mattei as prayed. This was done. Some time later, C. D. Stocking, a real estate broker, informed Von Bargen of the sale, and shortly thereafter petitioner paid Von Bargen the money due him from the funds furnished by Mrs. Mattei.

Charges were filed against petitioner before the local administrative committee by Stocking and Von Bargen. The first letter to petitioner by the secretary of the committee, dated July 26, 1935, declares that the substance of the charges was that the court's order was made upon misrepresentations in the petition, and that ‘attempts of C. D. Stocking to purchase said property as a real estate broker prior to said proceedings in said estate were frustrated by you’. After a preliminary hearing the matter was dropped. On October 27, 1937, more than two years later, a notice to show cause was issued by the committee, setting forth the same charges in more detail. Stocking and Von Bargen were again the complainants. Another hearing was had. The report of the committee recites that Stocking ‘claimed to have been deprived of the privilege of bidding on the property or finding a purchaser therefor, stating that the property was worth much more than the amount of the mortgage’. After reviewing the facts in detail, the committee found that petitioner was guilty of the false statements in the petition to compromise, and that the probate court had relied on them in making its order authorizing compromise; and ‘that the effect of the proceeding was to obtain for Theresa Mattei title to the real property without following the procedure prescribed by law applicable to sales in probate, thus depriving the estate of the safeguards provided by law relating to competitive bidding’. The committee concluded that he was guilty of professional misconduct and recommended a ‘public reproval’ by the board of governors. The proceeding came before the board of governors, and that body recommended that petitioner be suspended from practice for a period of two years.

Throughout the proceedings petitioner conceded that, strictly speaking, the statements in the petition concerning the ownership of the note and mortgage were not true, but stated his belief that they were substantially true. He refers vaguely to the transaction as an ‘escrow’ in the sense that the negotiations were going forward under which Mrs. Mattei would pay the money and become the ‘equitable’ owner of the mortgage; and points out further that the facts were all known to the administrator and sole heir, and the transaction was entered into with his approval. With respect to the additional property deeded to Mrs. Mattei, petitioner contends that though it may not have been described in the mortgage it was considered by all parties to be a part of the mortgaged tract, and contained a water right appurtenant thereto. We need not dwell on these defenses because it seems clear that petitioner as a reasonably competent attorney must have known that these statements in the petition were not true. The specific charge of misleading the court by a false document was proved, and discipline was therefore warranted.

There remains for consideration the extent of the disciplinary measures to be taken. Petitioner contends in his defense that the complainants in the proceeding had no legitimate interest in the matter; that the parties in interest made no complaint; that petitioner was not shown to have benefited by the transaction; and that no one suffered any real injury. The local committee found: ‘Apparently no one has suffered any financial loss by reason of the transaction. The administrator who is also the son and only heir appeared in court at the time of final distribution and stated that he approved all acts of the respondent done in his behalf. C. D. Stocking brought the transaction to his attention, by letter, immediately after the order was made authorizing the compromise, but the communication was referred by Rapetta to the respondent. Rapetta has not made known any complaint which he might have.’

Nevertheless, the plan conceived by petitioner was unworthy of an ethical practitioner. Honesty in dealings with the courts is of paramount importance, and misleading a judge is, regardless of motives, a serious offense. We have therefore concluded that the recommendation of the board of governors should be approved.

It is ordered that petitioner be suspended from the practice of law for a period of two years from the date of the filing of this opinion and order.

I dissent from the judgment. However, I concur in the conclusion that petitioner should be disciplined in punishment for the commission of the offense of which he was accused. But, notwithstanding that situation, to my mind, the punishment imposed by the judgment is much too severe. Although not suggested as at all indicative of petitioner's innocent intent, or as available to him for the purpose of minimizing the seriousness of his misconduct, but appropriately in mitigation of his punishment, it is not improper to direct attention to the fact that no one who has, or ever had, any direct financial interest in the transaction lost anything by reason of the misstatement which petitioner made to the court. At no time has the only heir to the estate complained of petitioner's conduct in the premises. To the contrary, with full knowledge of the facts in that connection, at all times he has been thoroughly satisfied with the procedure and practice that was adopted and carried into execution by petitioner, and has expressed his approval thereof. Apparently the only persons who gratuitously interested themselves in the prosecution of petitioner were a real estate agent, who perhaps hoped to gain something for himself through a purchase and later sale of the property, and the owner of the mortgage, who may have contemplated not only a possible advantage to be derived from a foreclosure of the mortgage, but also a probable benefit which likely would arise from a deficiency judgment in his favor. Shortly after the representations first had been made to the court, the matter was investigated by the local administrative committee of The State Bar, and thereafter was ‘dropped’. More than two years later, at the instance of the real estate agent and the mortgagee, the question was revived, with the resulting recommendation, as far as the local administrative committee was concerned, that petitioner should be publicly reprimanded. The instant investigation certainly savors of vindictive persecution by disgruntled persons, who could have no public interest in disciplining the petitioner, but rather only in gratifying personal spite. Undeniably, petitioner was guilty of having misconducted himself in his professional capacity; but there is not the slightest indication that he expected to or did either reap any financial reward or derive any advantage to himself by reason of the transaction. His sole object was to serve his client's interest and save the estate from bankruptcy. He is 39 years of age. He has lived and practiced his profession for over 12 years in the community in which the offense was committed. Never before was he ‘in trouble’. As far as the record disclosed, he has always lived an exemplary life. To impose upon him a judgment of two years' suspension from the practice of the law will amount to practical disbarment. At any rate, after such a period has elapsed, it is not improbable that it will or may be extremely difficult for him to reinstate himself either in his own estimation or that of his friends. Unquestionably he made a grave mistake. No matter what his nature, undoubtedly he has suffered intensely. In all probability, he has learned his lesson, and, as a consequence, never again would his conduct properly be subject to adverse criticism. Reduced to its effective element, petitioner's offense consisted in a gross affront to the dignity of the court. No other governmental agency, or person, was in anywise affected. In the future, the public would be safe. With reference to passing judgment on petitioner, the members of the board of governors of The State Bar, who made a ‘recommendation’ of two years' suspension of petitioner, were not nearly so well situated as was the local administrative committee, which recommended a ‘public reprimand’. The former saw no witnesses; they heard no oral testimony; nor had they the benefit of evidence of any kind other than the ‘cold record’. In those respects, they were not unlike the members of this court. A ‘recommendation’ does not rise to the dignity of a judgment. It amounts only to a suggestion, but, considering its source, should receive most respectful deference. However, in view of the extremely advantageous position in the premises that was occupied by the several members of the local administrative committee, their conclusion with reference to a proper and fitting punishment to which petitioner should be subjected—if not controlling—is entitled to great weight, and at least should receive the utmost consideration by this court in pronouncing its final judgment. To my mind, considering all the circumstances, this court might perform its entire duty not only by being just, but also by being merciful.

PER CURIAM.