Petersen v. State Bar

THE COURT.

— The petitioner was charged with violations of his oath and duties as an attorney and of the commission of acts involving moral turpitude and dishonesty. (Secs. 6067, 6068, 6103, 6106, State Bar Act.) Notice was served on him on October 25, 1939. Protracted hearings extending over a period of nearly two years resulted in findings and a recommendation by the Board of Governors that the petitioner be disbarred. The matter is now before us on an application to review the findings and recommendation.

[868]

The petitioner is a native of Oakland, California, and is about fifty-two years of age. He was admitted to practice law in this state on December 13, 1913. Two prior proceedings terminated in disciplinary - action. On August 27, 1929, he was suspended for one year on a showing that he had withheld and appropriated to his own use funds entrusted to him by a client.

(In re Petersen,

208 Cal. 42 [280 P. 124].) In September, 1938, he was again called to account on a similar charge which resulted in an order on August 14, 1940, suspending him for one year

(Petersen

v.

State Bar,

16 Cal.2d 57 [104 P.2d 769].)

The events leading to the present charges and recommendation may be summarized as follows: Early in 1939 the petitioner was employed by Peter Steinkellner to refinance the business of Peter Steinkellner & Co., Inc., a California corporation which was in financial difficulties. He received $125 to cover the costs and fees involved in the reorganization, but claims of creditors were to be met from funds obtained in the refinancing. He revised the articles of incorporation, caused a stockholders meeting to be held, and took the articles into his custody for the purpose of filing the same, but when he learned that the corporation had failed to pay its franchise taxes, and that the sum necessary to reinstate its franchise was about the amount deposited with him for costs of reorganization, he did not file the papers. Thereafter he caused the Steinkellners to execute a note for $1,021.24 secured by a second deed of trust on their home in Marin County. Creditors’ claims of $350 and $150 were authorized by Steinkellner to be paid out of the escrowed funds. The balance was turned over to the petitioner to apply to purposes stated. Erom that balance $150 was paid as a discount, $50 as a brokerage fee, and $290.64 to petitioner “on account.” Petitioner also requested and received from Peter Steinkellner, Jr., the sum of $75 which he represented was needed to enable the company to meet the claims of creditors. Only one of the creditors, Pacific Gas & Electric Co., received from petitioner the payment of its claim which was in the sum of $14.62. The petitioner conducted some of the foregoing transactions through two companies, Investors Guaranty Corporation, and Associated Security Holders, Inc., of which he was president and in which he held controlling- interests. Those companies kept no separate books of account, the work necessary to keep them going was done