Clark, In re

• Decision Date: 02 December 1965
• Citation: 47 Cal.Rptr. 681,407 P.2d 993,63 Cal.2d 610
• Court: California Supreme Court
• Parties: , 407 P.2d 993, 18 A.L.R.3d 1403 In re Oliver O. CLARK on Suspension of License. L. A. 28405.

Page 681

47 Cal.Rptr. 681

63 Cal.2d 610, 407 P.2d 993, 18 A.L.R.3d 1403

In re Oliver O. CLARK on Suspension of License.

L. A. 28405.

Supreme Court of California, In Bank.

Dec. 2, 1965.

Rehearing Denied Jan. 12, 1966.

Morris Lavine, Los Angeles, for petitioner.

F. LaMar Forshee, San Francisco, for respondent.

PER CURIAM.

Clark was convicted in 1962 on four counts of violating subdivision (a) of section 26104 of the Corporations Code by knowingly selling stock without a permit, and the judgment was affirmed (People v. Clark, 215 Cal.app.2d 734, 30 Cal.Rptr. 487 (petition for hearing denied)). We referred the matter to the State Bar for a report as to whether moral turpitude was involved and, if so found, for a recommendation as to discipline.

The Board of Governors found that moral turpitude was involved and recommends that Clark be suspended for three years. (There were no dissenting votes.) The local committee made the same finding and recommendation. Clark has filed objections to the report and recommendation and contends that moral turpitude was not involved and that, in any event, the discipline recommended is too severe.

It is well established that the findings of the State Bar must be given great weight, although they are not binding upon this court (Grove v. State Bar, 63 A.C. 327, 330, 46 Cal.Rptr. 513, 405 P.2d 553; Werner v. State Bar, 24 Cal.2d 611, 623, 150 P.2d 892) and that the burden is upon the petitioner seeking a review of the Board of Governors' recommendation to show that the findings are not supported by the evidence or that the recommendation is erroneous. (In re Hallinan, 48 Cal.2d 52, 53, 307 P.2d 1). In our opinion Clark has not met this burden.

Violations of the Corporate Securities Act involve moral turpitude if they are not merely technical but are accompanied by an intent to evade the act with the object of gain or profit. (In re Clark, 52 Cal.2d 322, 324, 340 P.2d 613; In re Hatch, 10 Cal.2d 147, 152, 73 P.2d 885.) In In re Clark we suspended petitioner herein for violations of the same provision of the Corporations Code as that involved here. Clark was on probation for the prior violations when he committed the instant offenses.

The four counts on which Clark was convicted in 1962 involved the sale of stock in Quality Discounts, Incorporated, to Joseph Mirabella, Herbert Jacobs, Peter Montana, and Richard Wall. The corporation was formed in 1959 by Clark and Emil Ruberti, a codefendant in the criminal action, in furtherance of a plan they conceived for establishing a chain of discount stores. According to Clark, the organization was set up in corporate form in order to effect a tax saving under legislation relating to small business corporations (26 U.S.C.A. § 1371 et seq.). The corporation never applied for or was issued a permit to sell its securities in California.

Clark loaned the corporation several thousand dollars, which had not been repaid at the time of the criminal action. In addition to being a creditor of the corporation he was an officer and director, of, and an attorney for, the corporation.

The four persons named in the counts against Clark paid a total of $35,000 for stock in the corporation in 1960 after seeing newspaper advertisements relating to the enterprise. Later that year the corporation ceased to operate.

Clark contends in the instant proceeding, as he did in the criminal action against him, that he is innocent of the offenses because his conduct came within subdivision (m) of section 25100 of the Corporations Code. ¹ In this proceeding, however, the record of conviction is conclusive evidence of guilt of the crimes of which Clark was convicted. (Bus. & Prof.Code, § 6101; In re Hatch, supra, 10 Cal.2d 147, 150, 73 P.2d 885.)

Clark further asserts that he in good faith thought his conduct came within sub-division (m) of section 25100 and had no intent to evade the Corporate Securities Act. However, he was admited to practice in 1907 and is an able practitioner. He has had considerable experience in corporation law and was familiar with the provisions of the Corporate Securities Act. The plan of action that led to his 1962 conviction was characterized by both the trial court and the District Court of Appeal as a 'very thinly veiled attempt to avoid the Corporate Securities Act.' (See People v. Clark, supra, 215 Cal.App.2d 734, 737, 30 Cal.Rptr. 487, 489.)

The board found that...