Black v. State Bar of Cal.

• Decision Date: 16 January 1962
• Citation: 57 Cal.2d 219,368 P.2d 118,18 Cal.Rptr. 518
• Court: California Supreme Court
• Parties: , 368 P.2d 118 Winston Churchill BLACK, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent. S. F. 20814.

Page 518

18 Cal.Rptr. 518

57 Cal.2d 219, 368 P.2d 118

Winston Churchill BLACK, Petitioner, v. The STATE BAR OF CALIFORNIA, Respondent.

S. F. 20814.

Supreme Court of California, In Bank.

Jan. 16, 1962.

Landels, Weigel & Ripley, Stanley A. Weigel, San Francisco, and Roger A. Parkinson, for petitioner.

Garrett H. Elmore, San Francisco, for respondent.

PER CURIAM.

After two hearings before a local administrative committee the Board of Bar Governors has found that petitioner misappropriated funds entrusted to his care by a client and willfully commingled his own funds with those of a client. The board recommends that petitioner be suspended from the practice of law for three years.

Petitioner was retained in 1944 by the Friesleben Estate Company, a corporation organized in 1899 and dissolved in 1949. Sometime in mid-1944 petitioner was made a director, and in 1946 secretary-treasurer, of the corporation. In these capacities and as counsel, petitioner received $121,263.74 on behalf of the corporation.

At different times he maintained three bank accounts in which corporate funds were held. He had a trustee account at the Crocker Bank in San Francisco, which is not relevant to the questions here at issue. He had a trustee account at the Bank of America, San Francisco Main Branch, from which most of the disbursements of corporate funds were made. Finally, he opened a commercial account in the name of the corporation at the First National Bank of San Mateo. For convenience, the Bank of America account will be referred to as the trustee account. The First National Bank account will be referred to as the corporation account.

The evidence establishes that petitioner deposited in the corporation account all funds received on behalf of the corporation. He then transferred them piecemeal to the trustee account, from which disbursements were made. The difficulty of establishing petitioner's guilt or innocence with respect to the misappropriation charge arises from his failure to keep adequate records of these transfers and disbursements.

'It would be a distortion of justice to permit a trustee, or attorney handling funds of a client, to escape responsibility by the simple act of not keeping any record or data from which an accounting might be made.' (Bruns v. State Bar, 18 Cal.2d 667, 672, 117 P.2d 327, 330.) Nevertheless, 'charges of unprofessional conduct on the part of an attorney should be sustained by convincing proof and to a reasonable certainty and * * * any reasonable doubts should be resolved in favor of the accused. (Citations.)' (Brawner v. State Bar, 48 Cal.2d 814, 818, 313 P.2d 1, 3.) Although 'The burden is upon one seeking a review of a recommendation of the Board of Governors to show that its findings are not supported by the evidence or that its recommendation is erroneous or unlawful (citations)' (Rock v. State Bar, 55 Cal.2d 724, 726, 12 Cal.Rptr. 857, 858, 361 P.2d 585, 586), 'findings of fact by local administrative committees and the Board of Bar Governors are not binding on the Supreme Court, which will weigh and pass upon the sufficiency of the evidence to sustain the findings of the board.' (Ibid.; Sturr v. State Bar, 52 Cal.2d 125, 127, 338 P.2d 897, 898.) We have concluded that the evidence does not establish that petitioner misappropriated funds belonging to the Friesleben Estate Company.

Respondent relies upon income and disbursements during the years 1953 and 1955 to establish petitioner's guilt. Prior to mid-August 1953 petitioner received and deposited $75,222.93 in the corporation account for the corporation. He transferred $43,100 from the corporation account to the trustee account. Of this sum he disbursed $13,546.53 from the trustee account on behalf of the corporation. In late August 1953 petitioner and the corporation agreed that petitioner's fee should be $35,000 for his services to date. Petitioner, however, was not entitled to this fee at the time approximately $29,500 over the established disbursements on behalf of the corporation had already been transferred to the trustee account.

Although petitioner testified that the trustee account was not used for the retention of money, he also testified that at all times funds for which he was accountable were held either in the corporation account, the trustee account, or in the form of cashier's checks. Respondent offered no evidence tending to establish that petitioner was not holding the $29,500 either in the trustee account or in the form of cashier's checks. Notwithstanding the absence of such evidence, the board expressly found that petitioner took his fee before he was entitled to it by agreement with the corporation.

In late 1953 and early 1954 most of the remaining $32,122.93 was withdrawn from the corporation account. During this period petitioner disbursed $10,000 from the trustee account on behalf of the corporation. Thus, at the conclusion of the 1953-1954 transactions, petitioner was accountable to the corporation for $16,676.40, of which only a small part remained in the corporation account. The record is devoid of evidence that petitioner misappropriated any part of this sum. Indeed, petitioner testified that at about this time he began the purchase of cashier's checks to hold personally to protect the funds of the corporation against attachment in threatened litigation. Although petitioner offered no evidence corroborating this testimony, nothing of a substantial character in the record provides a basis for doubting that the outstanding balance of corporate funds was either on deposit in the trustee account or held in cashier's checks, or both.

During 1955 petitioner received and deposited $27,500 in the corporation account. He made various withdrawals aggregating $27,300. The evidence establishes that this sum was deposited in the trustee account. Petitioner was entitled to a contingent fee of $9,166.66 from the $27,500, and was thus accountable for the remaining $18,333.34. Petitioner disbursed $11,988.20 on behalf of the corporation, leaving a balance of $6,345.14 for which he was accountable. On September 30, 1955, the balance in the trustee account was $315.47.

Petitioner testified that the balance must have been held in cashier's checks. He could not recall, and had no record of the bank from which such checks were purchased. Respondent contends that 'The trustee bank statements themselves do not indicate any figures indicating the purchase of cashier's checks in substantial amounts from said trustee account.' These statements, however, show that the two largest checks written on the trustee account during 1955, other than for disbursements admittedly made for the corporation, were for $2,000 and $3,477.50. Several other checks for almost $1,000 each were also charged to the trustee account. Thus, there is no evidence tending to contradict petitioner's admittedly uncorroborated testimony as to the existence of the cashier's checks.

A certified public accountant examined the available records and testified that the existence of such checks was not precluded. Respondent discounts this testimony because the board found that 'Due to the failure or inability of respondent to furnish records from which a proper audit could be made, the opinion of the accounting witness was, at best, inconclusive on the matters which were relevant to this inquiry.' The expert examined all the evidence available to the board. If this evidence was insufficient to render the expert's opinion conclusive, it would also seem insufficient to support a contrary finding.

Petitioner's final accounting established his liability to the company for $22,746.97. The accuracy of this accounting was not questioned, although it is not likely to have been completely accurate, considering the inadequate records kept by petitioner. Petitioner admits that the $22,746.97 was in neither the corporation account nor the trustee account. Indeed, he answered the demands of the corporate representatives with a cashier's check that admittedly represented a loan to his mother from a Los Angeles bank secured only a day or two before the check was tendered to the corporate representatives. Petitioner testified, however, that he was holding in his office safe a $25,000 cashier's check that was marked as representing corporate funds. The purpose for this secret holding was purportedly to protect the funds, and petitioner's possible interest therein, from attachment in connection with threatened litigation. Petitioner could not recall and had no record of the bank from which this check was purchased, its date, or any other detail. He testified that he...