In the Matter of LOUIS STECKLER, an Attorney, Respondent.
CHARGES by the Bar Association of the city of New York against the respondent, an attorney of this court, as being guilty of unprofessional conduct in his office of attorney and counselor at law,
Arthur S. Hamlin, for the petitioner.
George Gordon Battle, for the respondent.
INGRAHAM, P. J.:
The charges in this case referred to the appropriation or disposition of certain property of the estate of one Lina Matthias which came into the respondent's hands as attorney for the executors and legatees under her will. The estate amounted to about $2,700 in personal property, consisting of savings bank accounts and a bond secured by a mortgage upon real property in the city of New York. After the execution of the will by the decedent she attempted to modify the will by a codicil which, not having been executed in accordance with law, could not be admitted to probate. The will, however, was admitted to probate and letters testamentary issued to one Geib on May 28, 1908. The legatees named in the will
were two residents of this State and three persons residing in Germany. The respondent was retained by the executor and others interested in the estate to have the will probated and to perform the proper professional services in collecting the assets and closing up the estate. There was no trust created by the will and it was the duty of the executor to promptly collect the assets, pay debts and expenses, and distribute the balance among the legatees. Upon the same day that the will was admitted to probate, namely, May 28, 1908, the legatee and creditors in this country executed an agreement which in substance provided that the said Geib was to act as the executor of the estate; that in acting as such executor he was to carry out all the provisions of the will as well as of this alleged codicil, and that all moneys of the estate were to be turned over to Louis Steckler (the respondent) as attorney of the estate of the late Lina Matthias to be distributed by him as agreed upon, as follows--then followed the various payments to be made to the creditors, including the funeral expenses and expenses in connection with the winding up of the estate; that he was to collect as soon as possible a mortgage of $1,750, held by the decedent, and the life insurance due to the estate; that he was to wind up the estate as expeditiously as possible, prepare the final accountings, and pursuant to such final accounting distribute the balance due according to the will of the testatrix. This agreement was signed by the creditors and legatees in this State and also by the respondent. Acting under the authority contained in this instrument the respondent proceeded to collect the money due the estate. He received from the savings banks the sum of $836.09 which he deposited in the Carnegie Trust Company in his own account. In June he collected $34 from an insurance company, and on August 11, 1908, collected the mortgage which, with interest, amounted to $1,843.17. The total collections amounted to $2,713.20. Between June and August he paid out for funeral expenses, a legacy to Woodlawn Cemetery, and to a legatee and creditors, a total of $436.85. Thus by August 11, 1908, he had received all the property of the estate and had it in his hands in cash. Under the agreement which he signed he was immediately upon realizing the estate to distribute it among those interested.
He had nothing to do with investing any of the money. He did not hold it as trustee upon any trust, but simply as an attorney to collect on behalf of his clients, the executor and legatees of the estate, the money coming due and distribute it when collected to those entitled to it. There is no possible excuse for his disposing of this money in any way except in accordance with the agreement and the will of the testatrix.
The respondent was admitted to practice in 1886, and had, therefore, been a practicing lawyer for upwards of twenty years. He drew all of these agreements; procured them to be executed, presumably knew their contents, and it must be assumed that he correctly appreciated his duty to his clients, having reduced the estate to money on August 11, 1908. The creditors and legatees wanted what was due them and commenced to make demands upon the respondent for their share of the money in the fall of 1908. No distribution of the estate was attempted until December, 1908, when the respondent gave several checks upon the Lafayette Trust Company of Brooklyn, which trust company had on November 30, 1908, suspended payment, and the Banking Department had taken possession of its assets. Of course these checks were never paid and there is nothing to show that the respondent had any money in this trust company to pay the checks. Subsequently on June 7, 1909, he drew three checks for $200 each and sent them to the legatees in Germany who were entitled to a portion of the estate. These checks were drawn on the Carnegie Trust Company of the city of New York and when returned they were not paid. I cannot find any evidence that there were funds in the Carnegie Trust Company to pay these checks, but the respondent testified that he instructed the Carnegie Trust Company not to pay them because a release that he had sent with the checks had not been signed and returned with them. Proceedings were subsequently commenced in the Supreme Court to compel the respondent to pay the moneys of the estate that he had collected. These proceedings were begun on August 27, 1909, and on September 13, 1909, a referee was appointed by the Special Term of the Supreme Court. On January 9 and April 16, 1910, the respondent paid to the attorney for the executor who instituted this proceeding various
sums aggregating $900, leaving a balance of $1,367.37 unpaid. On July 19, 1910, a notice of hearing before the grievance committee of the Bar Association was served upon the respondent and on July 22, 1910, he paid to the attorney for the executor the balance of the claim against him.
Here was a palpable misappropriation of the money of this estate received by the respondent as attorney for the executor under a specified agreement by which he was to collect the money and promptly distribute it. It was as much a breach of trust for him to attempt to invest this money as to make any other disposition of it. The duty of the respondent was so clear that it is asking too much for the court to believe that he considered that he had any duty to invest the money to procure an income or make any other disposition of it except a distribution among the creditors and legatees of the decedent. What the parties interested in this estate wanted was the money to which they were entitled. They had intrusted the respondent as an attorney of this court to collect this money and distribute it, and that he assumed to do. He collected the money but the only attempt he made at distribution was to give checks upon a trust company which had failed, or a trust company in which he had no money, and the checks were not paid. Of course such misconduct requires this court to disbar an attorney unless an explanation as to his misconduct is presented which justifies the court in excusing his fault.
The respondent having the money in his possession from August, 1908, in December came to the conclusion, as he says, that 'the only way that I would pay these moneys would be if all parties in interest would in writing consent to the distribution.' He then drew up an agreement which was executed by the heirs in this country in December, 1908, and the heirs abroad in February, 1909. Having received this agreement for distribution, which would seem to have then required an immediate distribution, he sent these checks on the Carnegie Trust Company, where he had no money to pay them, and which were in fact not paid. By this agreement each of the German ...