Methever v. State Bar

THE COURT. On June 28, 1937, Gertrude E. Kamla, wife to Peter Kamla, made complaint to local administrative committee number nine of The State Bar of California, charg[231]ing petitioner, a member of said State Bar, with defrauding ¡complainant and her husband of the sum of three hundred dollars by a scheme devised by him, whereby he was to form a Nevada corporation in which the Kamlas and petitioner and his wife, as majority stockholders, were to engage in the business of raising for market purposes sheep, cattle, hogs and all kinds of poultry on a somewhat extensive scale.

Peter Kamla was an oil worker and spent most of his time in the oil fields of Kern County. His wife resided in Los Angeles, and the husband spent as much time as his employment would permit at their Los Angeles home. They owned three hundred and twenty acres of unimproved land near Barstow, San Bernardino County. On September 22, 1935, they caused an advertisement to be published in a Los Angeles city newspaper, as follows: “Partner. Ideal location for sheep ranch, need partner with capital. 10253 San Miguel, South Gate.”

The advertisement came to petitioner’s attention and he contacted Mrs. Kamla and she interested her husband in petitioner’s proposition to form a corporation and issue capital stock in the sum of $100,000, of which the Kamlas and petitioner and his wife were to own 51,000 shares of stock, and the remaining 49,000 shares were to be sold to the public to raise funds to finance the project. Petitioner was to be the president of the corporation, Kamla, vice-president, and Mrs. Kamla and petitioner’s wife, treasurer and secretary, respectively. The proposition was entirely the scheme of petitioner. The Kamlas knew nothing about the organization or functioning of a corporation, and were guided wholly by the advice of petitioner, who represented himself as being well experienced in the organization and promotion of corporations. The capital necessary to operate the corporation was to be raised by the Kamlas deeding to the corporation their 320 acres of land, and by petitioner deeding a like acreage to the corporation, in consideration of which they were to hold 51,000 shares. The proceeds of the remaining 49,000 shares which were to be sold to the public were to be used in purchasing livestock and equipping the lands for production.

Petitioner had several conferences with Mrs. Kamla, who seemed to have been impressed with his proposals by reason [232]