
    In the Matter of Meyer Prinstein, an Attorney, Respondent.
    First Department,
    February 10, 1911.
    Attorney at law disbarred.
    Attorney at law disbarred for misappropriating moneys deposited with him in . trust to be used to cancel liens on real property which was the subject of a transaction between his client and a third party.
    Charges preferred by the Bar Association of the City of New York against the- respondent, an attorney of this court, for professional misconduct.
    
      Howard Taylor, for the petitioner.
    
      Louis Marshall, for the respondent.
   Ingraham, P. J.:

These charges involved the misappropriation by the respondent of the sum of $200 which had been deposited with him in trust on the closing of a transaction in relation to real property by which he agreed to apply this sum of $200 to the payment or cancellation of certain charges for Croton water on the premises which was the subject of the transaction between liis client and a third party.

The case was referred to the official referee, who took the testimony, and his report sustaining the charge is before us. The respondent was the attorney for one De Rosa, who had sold to one Natella a third mortgage upon certain premises in the city of New York. When the parties met to complete the transfer of this mortgage on September 19,1907, it appeared that there were certain liens upon the property for water charges, and it was agreed that out of the consideration money for the purchase of the mortgage the sum of $200 should be deposited with the respondent to provide for the discharge of these liens. Two. hundred dollars was then paid to the respondent, who executed an instrument to which he' was a party as trustee, and which provided that the sum of $200 had been placed in his hands as trustee to secure the payment or other cancellation of certain charges for Croton water for 1906 and 1907, and setting meter for premises 643 West Fifty-ninth street, New York, shown on search made for Jacob H. Corn by the Title Insurance Company of. New York; that “if said charges are not canceled by payment or otherwise before April 1st, 1908, the said trustee shall apply the- sum in his hands to the payment of said charges and produce the receipts therefor to mortgagee for inspection and verification.” This was signed by both the purchaser and the seller of the mortgage and by the respondent as trustee. The respondent says that he was in a position to retain the $200 until February twenty-eighth, when another agreement was • executed. He stated that he deposited this sum of $200 in the Bank of North America within a day or two after its receipt. He produced a transcript of his bank account in' which there appears a deposit of $200 on September 20, 1907, but the balance to the credit of the respondent in the Bank of North America was less than $200 . on October 9, 1907, and it does not appear to have been over $200 subsequently; on January 2, 1908, it was $62.47, and on January 3, 1908, $24; and the evidence is quite conclusive that the money was not retained by the respondent as trustee, but was at once appropriated to his own use. He testifies that he drew the money out of the Bank of North'America, or. did not make deposits, because of the financial condition existing at the time, and carried this $200 around in his pocket, but this explanation is incredible and not entitled to consideration.' About February 1, 1908, it appeared that a prior mortgage upon this property was to be foreclosed, and the respondent was notified not to pay these water charges. He had, therefore, this money as trustee, not alone for his client De Bosa, but also for Patella, who had purchased the mortgage, and the trust was evidently for the protection of Patella, and not De Bosa. It is quite clear that the respondent could not, without a gross violation of his trust, have disposed of this money in any way without Patella’s consent. After the foreclosure of the prior mortgage had been instituted, the parties met at the office of Patella’s attorney, at which his attorney (Mr. Corn), De Bosa and the respondent were present. An agreement was then executed by which De Bosa transferred to Patella the contents of a liquor saloon and other property, to secure Patella, and also transferred to Patella this $200 on deposit with the respondent.- To that agreement the'respondent was not a party, but he was present when it was executed and he signed it as a witness. Subsequently Patella demanded from the respondent this $200 and, the respondent refusing to pay it, Patella commenced an action in the Municipal Court against the respondent to recover it. Bespondent set up as a defense to that action the facts which he testified to before the referee, and the question was submitted to a jury, who found a verdict for the plaintiff, upon which a judgment in favor of Patella against the respondent was entered for $228.91, upon which execution was issued and returned unsatisfied, and these proceedings were then instituted.

There is presented here a clear ease of a breach of trust by which the respondent misappropriated this sum of money deposited with Mm for a specific purpose. It is clear that the money was intrusted to the respondent because of. his.position as attorney and counselor at law. The respondent claims that after he received the money his client De Bosa told him that whatever balance there was after paying the charges for Croton water, he (the attorney) could apply on account of the services that he had rendered to De Bosa; that subsequently, after the notice had been given him not to pay these Croton water charges, he appropriated the money, as he considered he had a right to do; that when this agreement was to be signed lie protested against the $200 being transferred to Natella, but that De Eosa told him to let it go and that he (De Rosa) would give him some money subsequently, and he signed the agreement as witness. Assuming this to be true, as before stated, the.respondent was trustee for Natella as well as for De Eosa, and his appropriating the money which he had held in trust, without Natella’s consent, was a distinct breach of trust. The referee, however, has found against the respondent upon his contention, and the referee’s finding is sustained by the evidence. The respondent’s whole story is evidently an afterthought made up for the purpose of excusing what was clearly a,breach of trust and serious professional misconduct, and which he has attempted to sustain by false testimony before the referee. The referee finds as follows: “.After a careful consideration of all the evidence, and the briefs and arguments of the respective counsel, I conclude, as a matter of fact, that, the respondent received the $200 in trust to be used for the specific purpose 'stated in the agreement of September 19, 1907, to which the respondent Frank De Eosa and Serverio Natella were parties ; that when respondent was notified, about February 1, 1908, that the fund should not be used for the payment of water charges, and setting meter, it was his duty to account to De Eosa and Natella, the other parties to the said agreement, as their respective rights in justice required; that the payment subsequent to the commencement of this proceeding of the judgment obtained by Natella against the respondent for the sum of $200 was not an excuse for his neglect in this regard, and cannot operate to exonerate him from the charge of unprofessional conduct ; that it was the respondent’s duty at this time to inform both De Eosa and Natella of the condition of the fund and of any facts ' calculated to affect it or of-any claims made thereto; and the respondent, by not promptly informing Natella of his claim to the fund, was guilty of an omission of duty; that the respondent negligently and improperly mixed the said trust money with' his private funds, and thereby violated his duty as trustee ; that the preponderance of evidence sustains the contention that De Eosa did not agree and promise that so much of the fund as was not required -to.meet the purposes of the trust agreement should become the property of the respondent and be applied by him on account of. the claims he had against De Eosa; that, in my opinion, by reason of the acts of commission and omission stated above, violative of the. respondent’s duty as a trustee and an attorney and counsellor at law, he is guilty of unprofessional conduct.” I think that conclusion is amply sustained by the evidence. It clearly appears that the respondent testified falsely in the Municipal Court action and before the referee and in his answer submitted to this court.

In view of this conclusion of the referee but one result can follow, and that is that the respondent must be disbarred.

McLaughlin, Laughlin and Scott, JJ., concurred.

Respondent disbarred.  