Seavey v. State Bar

THE COURT.

Proceeding to review action of the board of governors of The State Bar of California recommending disbarment of petitioner Ernest L. Seavey. It is charged that petitioner has committed acts involving moral turpitude and dishonesty in the course of his professional relations in that he has been guilty of a breach of trust and of the embezzlement of money entrusted to him. The local administrative committee before whom the charge was heard found that the “acts, doings and omissions of the accused in the premises, amount to a violation of the provisions of section 506 of the Penal Code of the state of California”, and recommended his suspension from the practice of law for three years. Section 506 of the Penal Code provides that, “Every . . . attorney ... or other person otherwise entrusted with or having in his control property for the use of any other person, who fraudulently appropriates it to any use or purpose not in the due and lawful execution of his trust ... is guilty of embezzlement.” The board of bar governors approved and adopted the findings of fact of the local administrative committee, but recommended that petitioner be disbarred from the practice of law.

The order to show cause was predicated upon the claim that a sum of money amounting to $4,72'0.75 came into the hands of petitioner in the settling up of a partnership business and

[75]

that he knowingly failed and neglected to keep the money in a trust account subject to the disposition of the proper owners separate from his personal account, and upon demand of the partners refused to pay over said money to them or either of them. This charge is substantiated by the evidence adduced at the hearing. Petitioner does not dispute that the following facts are true: Petitioner, as an attorney, drew up the papers of dissolution of a partnership in a rock-crushing business consisting of H. B. Bulmer and John T. Murphy, whereby Murphy turned over to Bulmer all of the partnership property to handle and dispose of as his own, but with the provision that as between the parties the interest in the partnership property owned by Murphy should be held in trust by Bulmer until a proper division of the proceeds was made either by agreement or lawsuit. The provisions of the agreement relative to this phase of the dissolution of the partnership are as follows: “7. It is the express intent of the parties hereto that this agreement shall be interpreted as follows: (a) In any questions arising between either or both parties hereto and any third party, the property hereby transferred and conveyed by second party [Murphy] to the first party [Bulmer] shall be held and construed to be the sole and exclusive property of first party, with the absolute right to sell and transfer, mortgage, pledge or otherwise deal with the same free from any claim by second party, (b) In any question arising between the parties hereto the interest of second party in the partnership property hereby conveyed to first party shall be deemed to be held in trust for second party, but subject, nevertheless, to the provisions of the preceding section (a) hereof. ...” Petitioner having prepared the contract, was, of course, conversant with the terms thereof. Thereafter Bulmer sold the partnership property to the Spreckels Commercial Company for the total sum of $45,000. Of this amount $15,000 was to be paid upon delivery of possession and the balance to be paid in instalments. Before the final payment was made the Spreckels Commercial Company became bankrupt and thereafter the claim against Spreckels Commercial Company was compromised for a sum equal to 50 per cent thereof, and the sum of $4,720.75 was paid over to petitioner in full settlement. In the meantime, Murphy had filed an action in the Superior Court of San Diego County to recover the amount due to him from Bulmer