Allen v. State Bar

THE COURT.

In this disciplinary proceeding, the Board of Governors of The State Bar recommended that petitioner be suspended from the practice of law for 60 days.

In March, 1948, Temple of Yahweh, Inc., a corporation, was indebted in the sum of $500 to Mr. and Mrs. Linster for money theretofore advanced by them. Mrs. Linster was the treasurer of the corporation. A mortgage on property situated in the city of Los Angeles, owned by the Temple Corporation, was executed by Mr. Crowell, its president, on behalf of the corporation, and recorded. Petitioner was attorney for the Temple, and was named as mortgagee and payee in a copy of a note for $500 set forth in the mortgage. The Temple was not indebted to petitioner. Petitioner was named as mortgagee and payee without his knowledge, and at the request of the Linsters, as they did not want their names to appear of record in the transaction. They understood, however, that the note and mortgage were to protect their $500 claim against the Temple. Petitioner was away from Los Angeles at the time the mortgage was executed and he had no knowledge of the transaction until April or May of 1948, when, according to his testimony, he was advised of it by

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Crowell, who stated that both a note and mortgage had been executed naming petitioner as mortgagee and payee. Petitioner also testified that he did not know that the Linsters were the real beneficiaries of the note and mortgage until after this proceeding was instituted before The State Bar.

The Temple was involved in bankruptcy proceedings in March, 1948. A settlement was reached, whereby certain real property, including that embraced in the mortgage, was transferred by the Temple to the clients of L. H. Phillips, an attorney, and Phillips’ clients agreed to pay all indebtedness against the property including the instant mortgage.

In November or December, 1948, Phillips communicated with petitioner by letter and telephone, stating that he desired to pay the mortgage and clear the property. He requested that “the note,’’ plainly referring to the note which was given concurrently with the mortgage, a copy of which appeared therein, and the mortgage, together with an executed satisfaction, be delivered to him upon his payment of the $500. The Linsters called at petitioner’s office and he told them to bring the note and mortgage to him to deliver to Phillips. After a search, Mrs. Linster found the mortgage, but was unable to find the note. There was some discussion between Linster and petitioner, and Linster requested petitioner to prepare a substitute note. There is some conflict as to whose idea it was. At any rate, petitioner prepared one and Linster retired to the next room, and out of petitioner’s presence, signed the Temple’s name to it and Crowell’s name as president of the Temple Corporation. Petitioner knew that Crowell was not in the next room at that time. He also knew that the note was not executed by Crowell. Petitioner delivered the mortgage, substitute note and satisfaction (the latter executed by himself) to Phillips and received $500 which he handed to Linster who paid him $50 as his attorney’s fee.