Miller, In Matter of

• Decision Date: 13 March 1978
• Docket Number: No. 60136,60136
• Citation: 568 S.W.2d 246
• Parties: In the Matter of George H. MILLER, Respondent.
• Court: Missouri Supreme Court

Page 246

568 S.W.2d 246

In the Matter of George H. MILLER, Respondent.

No. 60136.

Supreme Court of Missouri,En Banc.

March 13, 1978.

Larry M. Woods, Columbia, for informant.

Thomas D. Cochran, Joe F. Willerth, Piedimonte & Cochran, Independence, Robert L. Wesner, Sedalia, for respondent.

PER CURIAM:

Harold W. Barrick, General Chairman of the Advisory Committee of the Missouri Bar Administration, filed an information in this Court charging George H. Miller, an attorney, with four counts of professional misconduct, and requested a hearing and a judgment of disbarment.

In response an answer was filed admitting the allegations of Counts I and II, pleading mitigating and extenuating circumstances, and denying the allegations of Counts III and IV.

Honorable Paul E. Carver, appointed Special Master, conducted a full hearing, and in due course filed a 27-page "Statement, Finding of Fact, Declaration of Law and Advisory Recommendation," concluding with a recommendation that respondent be found not guilty on all four counts for failure to prove the charges by a preponderance of the evidence, and discharged from all disciplinary actions. Briefs were filed and the matter was argued before the full Court.

In a disciplinary proceeding the findings and conclusions of a special master are advisory only, and not binding. This Court has the obligation of reviewing the evidence, making its own determination of fact issues, declaring the law, and finally determining the matter. In re Weiner, 547 S.W.2d 459 (Mo. banc 1977). With all due respect for the honorable and experienced special master, we are obliged to disagree with his ultimate conclusions and recommendations.

Essential background facts: Respondent was admitted to the bar in 1936. He and William H. Morris, members of the same church, were friends of long standing. Respondent was the confidant of Mr. Morris, who had implicit confidence in respondent's honesty, integrity and competence as lawyer and adviser. Mr. Morris accumulated some town property, a small farm, a $5,000

bond, mortgages and savings accounts. Early in life he and his wife took into their home and raised an orphan boy aged 3 or 4 years, who was given the name Jack Morris. Jack was never legally adopted by the Morrises. In 1966 William H. Morris suffered a stroke, after which he was physically incapacitated and bedfast until his death. On June 16, 1966, while still mentally competent, Mr. Morris executed a general power of attorney to respondent, who assumed management and control of his properties. Mr. Morris deteriorated mentally, and was not mentally competent from and after 1968 or 1969. He died intestate on December 10, 1974. Jack Morris was appointed administrator of his estate. In a separate proceeding in circuit court the equitable adoption of Jack Morris by William H. Morris was judicially decreed following Mr. Morris' death. The attorney for the administrator called upon respondent to make an accounting of his stewardship. Respondent responded by producing all his records, checks, settlements year by year, and other data, from 1966 to 1974, and by writing comprehensive and detailed letters of explanation. All the data respecting the transactions and movement of funds which provided the basis for the charges made in these disciplinary proceedings was first disclosed in respondent's correspondence and accounting, and not "dug out as a result of some investigation or some exploration of what transpired." Several discrepancies discovered by the attorney for the administrator were explained to the latter's satisfaction, or made good by respondent, who paid into the estate all sums due and as required by the administrator and his attorney, with interest, without contesting their demands or haggling over amounts, with one exception, of which more later. Jack Morris, the equitably adopted son and sole heir of William H. Morris, acknowledged on the stand that he had realized a full recovery of everything to which he was entitled, stating, "Yes, I got everything." The attorney for the administrator testified that every item or asset due the estate was accounted for and paid by respondent.

COUNTS I AND II

Count I alleged that beginning in the year 1968 respondent, acting under a power of attorney executed by William H. Morris on June 16, 1966, did use the funds of William H. Morris as a source of credit for his personal farming operation, withdrawing sums for said purpose from 1968 through 1974 in various amounts totalling approximately $30,000, contrary to the provisions of Disciplinary Rule 1-102(A)(4), ¹ (5) ² and (6), ³ and DR 5-104(A) ⁴ of Rule 4, Supreme Court of Missouri.

Count II alleged that acting under the power of attorney respondent contracted with his wife for the sale of property on behalf of his client, contrary to these disciplinary rules.

At the outset of the hearing before the special master respondent's counsel stated that the circumstances alleged had never been and were not then denied; that respondent was not of the opinion that his actions were proper or right; that respondent had "technically" admitted the charges in Counts I and II from the beginning, and made no attempt to cover up; that the first instance in which the circumstances giving rise to these charges came to light was a letter dated February 25, 1975, written by respondent to the attorney for the administrator, outlining the very facts upon which From the admissions, pleadings, the opening statement of respondent's counsel, respondent's admissions on the witness stand and in his brief, and the undisputed oral and documentary evidence, we find that respondent appropriated, treated as his own and availed himself of the personal use of a total of approximately $30,000 of William H. Morris' funds entrusted to him for safekeeping, management and investment, and that respondent made arrangements for respondent's wife to take title to real estate in which Mr. Morris had a security interest, in the course of which an unsecured promissory note was substituted for a note secured by a recorded deed of trust.

Counts I and II were based; that respondent's borrowings from Mr. Morris' assets were made without criminal intent or intent to do any moral wrong, and without subterfuge or involvement of third parties; that the borrowings were evidenced by promptly executed promissory notes, which respondent intended to and did repay in full to the estate; that the estate suffered no financial loss; that while there was a technical ethical violation, there was at most negligence or "something that might have approached malpractice." Respondent conceded the principal facts upon which the charges in Counts I and II were founded; that he had made errors of judgment; that in handling this matter, if he had it to do over again there were many things he would not have done in the way they were done, or would not have done at all, but claimed his actions were not acts of dishonesty. Respondent's brief, and his counsel in oral argument, admitted the basic facts alleged in Counts I and II and admitted errors of judgment but pleaded that respondent's use of his client's funds for his own uses and purposes was done with full disclosure either to William H. Morris or Jack Morris, and with a full accounting for all funds, with compound interest on amounts due, and that respondent's conduct did not involve dishonesty, fraud, deceit or misrepresentation.

Respondent had no authority, actual or implied, to appropriate his client's funds for his own personal purposes, and in so doing violated elementary rules of fiduciary obligation. The power of attorney to "transact (any) and all business in any way connected with any and all property or property rights (he possessed) whether real or personal property" gave him no such authority. The donee of such a power may not engage in self-aggrandizement. None of the borrowings not even the first one, in 1968 was made with the consent of William H. Morris. Subsequent borrowings could not have been made with his consent, for he was concededly mentally incapacitated after 1968 or 1969. It is no justification that Jack Morris consented to respondent's borrowing these funds. Jack Morris' consent did not constitute consent of the client after full disclosure, within the meaning of DR 5-104(A), Rule 4, because Jack Morris had no right to give or withhold consent for William H. Morris. Although William H. Morris' account, from which some of these loans were taken, was in the joint names of William H. Morris and Jack Morris, the inclusion of Jack's name was a mere formality, to enable Jack to obtain the funds at Mr. Morris' death and not to give Jack a present interest (a fact conceded by Jack). The mechanics of the first appropriation, in 1968, were as follows: Desiring to borrow $5,000 from his client's funds respondent wrote Jack Morris a check for $5,000, drawn on the joint account, and in return had Jack issue a check to respondent for $5,000, drawn on Jack's private bank account. Questioned as to why he adopted this strange procedure respondent's explanation was that this would show that Jack knew what respondent was doing with Mr. Morris' money knew that respondent was borrowing funds of William H. Morris. Unexplained is the fact that respondent did not follow this procedure thereafter. Subsequent borrowings were made by check made out and signed by "William H. Morris, by George H. Miller, Power of Attorney," payable to respondent or respondent's wife, who contemporaneously executed unsecured promissory notes payable to William H. Morris. Asked why he had his wife appear as the borrower in several transactions None of the following reasons suggested by respondent excuse his misconduct: that he always provided for a higher rate of interest in the promissory notes he signed than could be obtained by investing the funds in savings accounts of financial institutions; that he intended to repay the...