
    In the Matter of Thomas H. Smith, an Attorney, Respondent.
    First Department,
    July 10, 1916.
    Attorney at law — suspension from practice — conversion of money of client.
    Attorney at law suspended from practice for two years for misconduct in indorsing his client’s name on a cheek received by him on behalf of said client and cashing the same and retaining one-half of the proceeds to his own use under a claim that it was for services rendered.
    Application on the report of official referee upon charges against the respondent, an attorney and counselor at law, for professional misconduct.
    
      Einar Ghrystie [George Thoms of counsel], for the petitioner.
    
      Thomas IT. Smith, respondent in person [John McGregor of counsel].
   Clarke, P. J.:

The respondent was admitted to the bar in May, 1880. The gravamen of the charge contained in the petition is that the respondent, without authority, indorsed his client’s name to a check received by him on behalf of said client, cashed the same and converted one-half of the proceeds to his own use.

The undisputed evidence established that some time prior to 1912 one Mary A. Pugh died intestate a resident of Kings county, leaving a small estate which was administered by the public administrator of that county. The residue of the estate, after the payment of debts and administration expenses, was ultimately paid over to the State Treasurer to await proof of kinship. It appears that the decedent’s only next of kin was one Lawrence P. Hyland, a first cousin, residing- in Dublin, Ireland. Hyland, under date of November 29, 1911, executed and delivered to Messrs. Perkins &Trautwein of New York a power of attorney authorizing them to proceed 1 ‘ at their own cost and expense ” to establish and recover his interest in said estate, and agreeing to pay them for the services thus rendered fifty per cent of the amount recovered, which amount was thereby assigned to them. Perkins & Trautwein were not lawyers, and what, if anything, they did in the matter does not appear.

Sometime thereafter Crowley & Bolger, Hyland’s attorneys in Dublin, wrote to Charles O’Conor Irwin, a neighbor and friend of the respondent in New York city, and he in accordance with their instructions retained the respondent to establish Hyland’s kinship and right to the fund. The power of attorney, theretofore given to Perkins & Trautwein, was thereafter given to the respondent by Irwin or sent to him by Crowley & Bolger. The respondent thereupon took such necessary proceedings as resulted in an order of the surrogate of Kings county directing the State Treasurer to pay the balance of the fund, amounting to $653.83, to Hyland. Pursuant to said order the State Treasurer drew his check in that amount to the order of Hyland and delivered the same to the respondent. The respondent, without authority, indorsed Hyland’s name on the check in a disguised hand, affixed his own signature thereto and procured it to be cashed by a friend. Upon the receipt of the proceeds, the respondent promptly sent one-half of the same, less the cost of exchange, to Crowley & Bolger in Dublin, accompanied by the following letter:

“ Thomas H. Smith “Attorney and Counsellor at Law “ 105 West 10th Street “Borough of Manhattan, New York City.
April 3rd/14.
“Estate of Mary A. Pugh, dec’d.
“Messrs. Crowley & Bolder:
“ Gentlemen.— Enclosed please find draft for £66/14/2 to your order. I received from the State of New York as per the enclosed statement the sum of Six hundred and fifty-three dollars and eighty-three cents $653.83, of which under agreement I have retained one-half amounting to $326.91. The cost of the draft is $4.90, leaving a balance due you of Sixty-six pounds, fourteen shillings two pence, which I enclose and for which you will kindly mail me a receipt. With my kindest regards and with the love of an Irishman’s son who never saw Ireland, but hopes to see it before long, and that Home Buie will succeed, I remain,
“ Tours very truly,
“ THOS. H. SMITH.”
Crowley & Bolger acknowledged the receipt of the draft in a letter dated April 24, 1914, which is-as follows:
“24th, 4.
Estate of Mary A. Pugh, deed.
“Dear Sib.—We duly received yours of the 3rd inst. with enclosures therein referred to. We observe that you have retained one-half of the amount received, as you say, under agreement. We are not aware that any such agreement was entered into and that you would only charge the usual professional fee to which you were entitled according to the practice of your courts.
“You must remember that this matter was entrusted to you in consequence of what we considered the excessive charge of Mr. Perkins, whose fee was the same as you now charge, and this being so, there would be no object in making any change if there is no advantage to our clients. We trust, therefore, you will reconsider the matter, and after deducting a reasonable fee,- we hope to get a cheque for the difference.
“Yours faithfully,
“ CROWLEY & BOLDER.
“ Thomas H. Smith, Esq.,
“ Solicitor,
“105 West 10th Street,
“ New York.”

Negotiations between Crowley & Bolger, Irwin and the respondent resulted in the respondent’s giving Irwin, in June, 1914, a check for seventy-five dollars drawn to the order of Crowley & Bolger, in settlement of the matter. Irwin sent the check to Crowley & Bolger, who indorsed it and returned it to him. He thereupon cashed the check, retained twenty-five dollars for himself and sent fifty dollars back to Crowley & Bolger.

There is a sharp conflict of evidence as to the terms of the respondent’s retainer. The respondent claims to have been retained upon a fifty per cent basis, as were Perkins & Trautwein before him. Irwin, on the other hand, testified that it was agreed that the respondent should receive for his services a fee of $100. It is clear from the letter of Crowley & Bolger, acknowledging the receipt of the money sent them by the respondent, that they knew of no definite agreement with the respondent as to the amount of his compensation. It is undisputed that Irwin, from the beginning, contemplated some compensation for his own services out of the fund recovered by the respondent, and that Irwin’s first information of the collection of the money came from Crowley & Bolger some six weeks thereafter. The evidence fairly establishes that the matter was taken from Perkins & Trautwein on account of what Crowley & Bolger considered an excessive claim for services, and I think, as the referee concludes, that the preponderance of evidence indicates that it never was agreed that the respondent should receive for his services fifty per cent of the amount collected.

It does not appear, however, that Crowley & Bolger made any further demand upon the respondent after the receipt of the second remittance of seventy-five dollars, and the petitioner concedes that the retaining of the money by the respondent was not a conversion. The evidence as to the retainer is, however, important in considering the motive of- the respondent in indorsing his client’s name on the check. As stated by the referee, “no loss ensued to his client as a necessary incident of the manner in which the respondent indorsed the check. From such an action, however, surreptitious intention might be, and in the state of facts shown by the record, should be inferred.” The referee concludes: “ The respondent’s handling of the matter from the time of the receipt of the check from the Comptroller of the State of New York shows that he lacked a proper appreciation of ethical conduct, and his acts should not pass unnoticed. I find the respondent guilty of misconduct in his profession.”

We think the act of the respondent in indorsing a simulated signature of his client upon the check drawn to his client’s order was highly improper and was undoubtedly done so that, having obtained possession of • the cash, he would be in position to assert his claim.

For his professional misconduct the respondent is suspended for two years, with leave to apply for reinstatement at the expiration of that term upon proof of his compliance with ‘the conditions to be incorporated in the order to be entered hereon.

Scott, Dowling, Smith and Page, JJ., concurred.

Respondent suspended for two years. Order to be settled on notice.  