4 Cal.2d 744, 15433, Johnson v. State Bar

Docket Nº:15433
Citation:4 Cal.2d 744, 52 P.2d 928
Opinion Judge:[10] Peters
Party Name:Johnson v. State Bar
Attorney:[7] Livingston & Borregard, Lawrence Livingston and Paul C. Maier for Appellants. [8] Robert C. Burnstein and Fred F. Cooper for Respondent.
Case Date:December 23, 1935
Court:Supreme Court of California

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4 Cal.2d 744

52 P.2d 928

GEORGE C. JOHNSON, Petitioner,



L. A. Nos. 15249, 15433.

Supreme Court of California

December 23, 1935

In Bank.

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[Copyrighted Material Omitted]

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George C. Johnson, in pro. per., for Petitioner.

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Philbrick McCoy for Respondent.



Two disciplinary proceedings were instituted against the petitioner, the first notice [52 P.2d 929] to show cause, setting forth that he had violated rule 2 of the Rules of Professional Conduct of The State Bar, and his oath and duty as an attorney at law, within the meaning of subdivision 2 of section 287 of the Code of Civil Procedure, and the second asserting that petitioner had violated rules 3, 4 and 7 of the Rules of Professional Conduct, as well as subdivisions 2 and 5 of section 287 of the Code of Civil Procedure.

Local administrative committee No. 3 found that petitioner had offended against the rule and the subdivision of the code section, as set out in the first notice to show cause, and had also violated subdivision 5 of the same section. It recommends his disbarment. However, the Board of Governors reduced its recommendation to suspension for one year. With respect to the second charge, local administrative committee No. 8 recommended that petitioner be suspended for two years, which was approved and adopted by the Board of Governors. We have issued writs of review in both proceedings, at the instance of petitioner, for the purpose of determining whether the recommendation of the board should be adopted and, while we deem it appropriate to consider both proceedings in one opinion, we shall, in the interest of clarity, detail separately the facts as disclosed by the record. Hence, we turn at this juncture to the record which respondent says supports the first charges.

It appears that in the early part of 1934, petitioner prepared, in part at least, and mailed or caused to be mailed to from between five hundred and one thousand lawyers throughout the United States, the following circular:

"Mortgage Adjustment & Salvage Company

"408 South Spring St.,

"Los Angeles, California.

"Dear Sir:

"This circular is as unusual as is the offer herein made to you.

"You personally know several persons who have 'lost' or are 'about to lose' their properties through foreclosure. We

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are launching a nationwide campaign of buying certain properties, and offer you the opportunity to share with us thru the attached contract.

"This panic has created the almost unbelievable situation that certain mortgages and trust deeds are invalid and unenforceable. The United States Constitution, the Acts of Congress, court decisions, and the acts of the President all contribute to this conclusion. We have the legal opinion of George C. Johnson, lawyer, of Los Angeles, and we are fully convinced, that the proposition is sound and that if attacked in court it will stand the final test. The idea also will have popular support, and it may be the next national campaign issue.

"George C. Johnson, LLB Northwestern University, is a member of the California, Texas and Illinois bars. In 1914, at the request of General Funston, the War Department sent him to Vera Cruz, Mexico, with General Funston's Chief Staff to handle matters there for the War Department during the American occupation. In 1914 Dean John Henry Wigmore of Northwestern University and the Judge Advocate Department wrote the 1914 Army Courts- Martial Manual, and supplementing it Mr. Johnson wrote a memorandum Courts- Martial Procedure, many hundred thousands copies of which were used by the Army Courts as authority on procedure. In 1922 Mr. Johnson assisted the Mexican government to secure recognition by the United States government. In 1925 he was associated with the General Counsel for the American Bankers' Association and salvaged several large corporations for eastern banks. In 1926, he liquidated assets of Equitable Trust Company, in Missouri and Texas, involving titles to some 4,000 pieces of realty, and in connection therewith filed one suit in San Antonio, Texas, against approximately 1,000 defendants. In 1931, in Re Weeks Poultry Community, Inc., 51 F.2d 122, he established new law in California, that co-operative marketing associations are not amenable to the Bankruptcy Act. In 1934, in action No. 318,472, in the Superior Court of Los Angeles County, he established new procedure in that a judgment debtor, by merely hiding in his home, can be arrested for absconding, and also that a receiver can be appointed for a judgment debtor corporation. We believe Mr. Johnson is again right in the above proposition and

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we are so convinced of it that we are sending you this proposition thru the mail.

"This offer is open for ten days. You will not be required to make any purchase or do any act of which you yourself do not first approve. To assure your good faith in your own work, we must have the right to require you to assign your interest [52 P.2d 930] later if the specific asset becomes involved in court action, or that you advance the court costs to retain it, which should not aggregate more than $25.00 a suit.

"If interested, fill in the plan desired and sign the contract and mail it to us with U.S. Postal Money Order. Do not send bank checks. A duplicate signed contract, the plan and brief will be mailed you in the rotation the contracts are received. You will also receive free a copy of Mr. Johnson's analysis of the cause and cure of the panic, which will be of inestimable value to you.

"This is the big opportunity for lawyers to rehabilitate themselves.

"Very truly yours,

"Mortgage Adjustment & Salvage Company."

"AGREEMENT, made at Los Angeles, California, this ___ day of ___, 1934, by and between MORTGAGE ADJUSTMENT & SALVAGE COMPANY, hereinafter called the client, and ___, whose address and name appears on the reverse side hereof, hereinafter called the attorney.

"1. Said client, hereby retains and employs said attorney to act as such exclusively for said client to purchase certain properties under the direction of said client as outlined in certain plans of operation to be forwarded said attorney and to prosecute and defend any and all actions to final adjustment that may arise in connection therewith.

"2. It is understood and agreed that all purchases and court proceedings shall be subject to the approval of said attorney; that the client will lend to said attorney the plans of operation and the legal opinion of its general counsel George C. Johnson to assist said attorney and that said attorney need make no purchase nor take any legal action of which he himself does not approve.

"3. In view of the fact that the client will operate this business throughout several states and that the ultimate financial success of said business depends largely upon keeping the plan

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and the legal theory secret so as to enable said client to obtain advantageous purchase contracts and because thereof it will be impracticable or extremely difficult to fix the actual damages for a breach of this contract, it is agreed that in case said attorney, without the written consent of said client, discloses to any person, firm, corporation or court, the plan or any part thereof or the theory or the law under which the client is...

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