Reynolds, In re
| Decision Date | 18 March 1965 |
| Docket Number | No. 38720,38720 |
| Citation | 205 N.E.2d 429,32 Ill.2d 331 |
| Court | Illinois Supreme Court |
| Parties | In re James D. REYNOLDS, Attorney, Respondent. |
William Bruce Richards, Chicago, for respondent.
Richard B. Allen, Chicago, amicus curiae.
This is a disciplinary proceeding under Rule 59 of this court in which the Illinois State Bar Association, through its Board of Governors as ocmmissioners of this court, on complaint by the Inquiry Division of the Committee on Grievances of the Illinois State Bar Association inquired into the conduct of James D. Reynolds as an attorney with reference ot alleged conduct and practices tending to defeat the administration of justice or to bring the courts and legal profession into disrepute.
The complaint contained twelve counts. Counts I through X (the bankruptcy counts) charged that respondent in his professional capacity represented ten different persons in ten separate voluntary bankruptcy proceedings in the United States District Court for the Southern District of Illinois, in the course of which he wrongfully and unprofessionally made or caused to be made as a part of the bankruptcy petition in each case an affidavit stating that he had 'not and will not accept any compensation for his serveces as such attorney until the filing fee and referee's costs are paid in full', and that said affidavit was false and a fraud upon the court inasmuch as he had at the time of making the affidavit and did thereafter request and receive professional fees before the filing fee and referee's costs were paid. These ten counts were amended at the conclusion of complainant's evidence so that each charged that respondent made affidavits or caused them to be made or consented to their being made by his agents, and that such affidavits were false and a fraud upon the court.
Count XI charged wrongful and unprofessional acts in connection with obtaining fees in a criminal matter.
Count XII charged improper actions in a transaction involving the purchase of real estate in Florida from one Eugene H. Skipper.
Respondent denied all charges of unprofessional conduct and fraud. He contends also that since the actions of respondent charged in count XII did not occur in an attorney-client relationship, even if the charges were true, they would not constitute grounds for discipline by this court.
The complainant dismissed count XI and the charges of count X were found not to have been proved.
The evidence on the bankruptcy counts was that respondent handled many bankruptcy cases, most of which were voluntary nonasset cases. In many of these the bankrupt did not have sufficient funds to pay the filing fee. Rule 3 of the Bankruptcy Rules of the United States District Court permitted filing a voluntary pertition without the payment of the filing fee if petitioner's attorney made an affidavit that he would receive no fees until the filing fees and referee's cost were paid.
In the voluntary bankruptcy proceedings which are involved in counts I to IX, respondent acted as attorney. In each was filed an 'Affidavit of Attorney' purporting to be an affidavit under oath by respondent that 'he has not and will not accept compensation for his services as such attorney until the filing fee and referee's costs are paid in full.' In each case the name of respondent was signed by Catherine M. Yerby, who was his secretary. She then acknowledged the signature as notary public. Respondent testified he would consult with the clients in a nonasset case, send them home to make a list of creditors, and in a day or two they would return to see his secretary who would prepare the papers and file them. He would not see the people again until the first meeting of creditors before the referee. In the meantime, the clients would pay a certain amount each week into his office and usually after the first meeting of creditors, he would pay the filing fees. The respondent testified regarding his directions and authorizations to his secretary as to signing the affidavits; at one time testifying she had no specific authority, at another that she did, and at another the he probably delegated her that authority.
The record also showed that respondent was indicted in the United States District Court for the Southern District of Illinois for criminal offenses in knowingly and fraudulently making a false oath in relation to bankruptcy proceedings. the indictment in ten counts was based upon the same cases which were the basis of counts I to X of this proceeding. Five of the counts were dismissed by the government and a nonjury trial on the other five counts resulted in a finding of not guilty, since respondent did not himself make the sworn statements, but they were made in his name by his secretary.
The evidence as to the charges in count XII concerned respondent's negotiations to purchase a hotel of Mr. and Mrs. E. H. Skipper in Florida. The sellers asked a sale price of $100,000, which was to include real estate, furniture, fixtures and inventory, except the stock of liquor used to operate the hotel's bar. Respondent and another, as owners of a corporation, agreed to purchase the hotel for $100,000 with $8,000 down and the remainder evidenced by a purchase money mortgage bearing 5% interest, which mortgage was to be inferior to an existing mortgage. The stock of liquor was to be inventoried and paid for by the corporation separately, but the liquor license was to be included in the purchase price. The transaction appears to have been completed in somewhat of a rush without seller's attorney, as respondent said he was in a hurry ot leave by airplane. Papers were executed and the liquor license was transferred. Upon Mr. Skipper's return to his hotel, he could not find the mortgage for the balance of $92,000. He called respondent in Peoria and talked by telephone on several occasions with him. However, respondent did not provide Skipper with either the original or a new mortgage, although indicating that he might have picked it up by mistake. After several days passed, Skipper went to Peoria...
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