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In Re Anderson

OPINION FILED SEPTEMBER 20, 1972.

IN RE CHARLES JOHN ANDERSON, ATTORNEY, RESPONDENT.


Disciplinary proceeding.

MR. JUSTICE GOLDENHERSH DELIVERED THE OPINION OF THE COURT:

The Board of Governors of the Illinois State Bar Association, sitting as Commissioners of this court under Rule 751 (Ill. Rev. Stat. 1971, ch. 110A, par. 751), has recommended that Charles John Anderson, the respondent, who was admitted to the practice of law in this State in 1946, be disbarred. Although the Commissioners made numerous findings of professional misconduct arising out of respondent's dealings with his "sister-like friend" and client, Verna Johnson, a spinster, during her lifetime, and during the administration of her estate after her death, we shall, in this opinion, discuss only those findings which are challenged in respondent's brief.

Shortly after the death of Verna Johnson on February 25, 1966, respondent mailed to various of her heirs entries of appearance and consents to have a stranger act as administrator. One of the heirs, Ann Hay, took respondent's letter and the entry of appearance and consent to John Cook, an attorney. After several phone conversations and some correspondence with respondent, Cook effected the appointment of Mrs. Hay as administrator of the estate. The probate proceedings were had in the circuit court of Lake County. Cook learned that the home in which Miss Johnson and her mother had lived and in which Miss Johnson resided at the time of her death was in a land trust created on July 2, 1964, with Elmhurst National Bank as trustee, and inquired of respondent whether he had any knowledge of the matter. Respondent told him that the beneficial interest in the land trust was in a joint tenancy comprised of the deceased, Miss Johnson, and another party who was not related to her, but declined to identify the surviving joint tenant. Several weeks later he advised Cook that he was the surviving joint tenant. Cook also learned that there was a savings account with the Deerfield Savings and Loan Association in which Miss Johnson and respondent were joint tenants.

Several months later, after additional conversations and correspondence between Cook and respondent, the administrator filed a "petition for citation to discover information" alleging that respondent was in possession of information concerning the land trust and the savings account and praying that he be ordered to appear for interrogation. The citation was issued and after three hearings the administrator and respondent entered into, and the circuit court of Lake County approved, a settlement agreement under the terms of which respondent paid the administrator the sum of $12,000 and assigned to her his interest in the land trust.

Respondent contends that there is no evidence to support the finding that he overreached his client in the creation of the joint tenancies. He argues that "The land trust agreement and the joint bank account were in existence for two years before Verna Johnson died. Both transactions required affirmative actions by her which, from the evidence, she entered into freely and with no apparent or written or voiced dissent."

Respondent did not testify in the disciplinary proceeding and the only testimony offered to explain the creation of the joint tenancies was taken during the hearings held in connection with the citation proceeding. At the first citation hearing respondent testified he had put $5000 into the savings account in which there was a balance of $5300 at the time of Miss Johnson's death. In the second hearing he stated that he had given Miss Johnson and her mother $5000 in cash and checks over a period of years and that Miss Johnson wanted him to have the account at her death, for the reason that it was really his. To support this contention he produced, at the court's direction, checks he had written to decedent and her mother. In her income tax return Miss Johnson's mother had reported these checks as interest income and he had reported them on his tax return as interest expense. He maintained, however, that the checks were gifts, that they were reported as interest at the mother's insistence and that he obliterated the writing after "FOR" on the checks because it indicated the account on which they were drawn and that was personal to him and not relevant to the citation proceeding.

Respondent testified that after the death of Selma Johnson, Verna Johnson's mother, he had several conversations with Verna concerning her making a will. He stated that she had had prior experience with a land trust in which her uncle was involved and suggested the title to her residence be placed in trust, and that she wanted him to have the home after her death because of their close relationship and all he had done for her and her mother. He told her it could be placed in trust in a joint tenancy and that "this was one method in which she would always have control." The trust agreement provided that in the management of the property the trustee would act only upon the written direction of Verna Johnson.

The only conclusion to be drawn from respondent's testimony is that the decedent was using the joint tenancies in lieu of a will. It is apparent that no one was present on the occasions when he and Miss Johnson discussed the creation of the joint tenancies, that he took no notes of their discussions, that in the creation of the joint tenancies he was acting as her attorney and that she did not receive independent legal advice. It does not appear that the decedent was present when the documents creating the land trust and the joint tenancy in the savings account were delivered to the trustee and the savings and loan association.

It has long been the rule that "Proof of the relationship of attorney and client, and of the fact that the beneficiary, in whom trust and confidence were reposed by the testator, prepared or procured the preparation of the will by which he profits, raises the presumption that undue influence induced the execution of the will." (Dial v. Welker, 328 Ill. 56, at 63.) It is equally well established that when an attorney engages in a transaction with a client during the attorney-client relationship and benefits thereby, in order to show that the benefit he received did not proceed from undue influence, he must prove (1) that he made a full and frank disclosure of all the relevant information that he had, (2) that the consideration was adequate, and (3) that the client had independent advice before completing the transaction. (McFail v. Braden, 19 Ill.2d 108.) Whether measured by the test applicable to testamentary dispositions or the rule enunciated in McFail, the testimony adduced by respondent falls far short of that which is required to overcome the presumption arising from his relationship with Miss Johnson.

Challenging further the findings of the Commissioners, respondent argues that "there is nothing in the record to justify the charge that he exhibited a lack of candor and honesty and willfully obliterated evidence. The so-called obliterations were disclosed to the Court and the reasons for them, and the Court, in effect, agreed that these were personal records. There is not in this record one word of censure or question by the Court conducting the proceedings with regard to Mr. Anderson's actions concerning these records."

The transcript of proceedings at the second citation hearing shows that respondent had partially obliterated certain cancelled checks written by him to Verna Johnson and her mother and partially obliterated a letter to him from "Verna and Mom." The originals of these partially obliterated documents were impounded by the court. Thereafter the court entered an order authorizing the administrator to withdraw these documents for the purpose of subjecting them to a scientific examination intended to restore, or ascertain the content of, the obliterated portions. The record does not contain any expert testimony or a report based upon an examination of the obliterated portions of the documents apparently for the reason that the settlement agreement was made shortly thereafter and the citation proceeding was dismissed. Respondent deliberately obliterated portions of documents which the court had ordered him to produce and the seriousness of this action is not diminished by the fact that the court hearing the citation proceeding did not take immediate disciplinary action.

Respondent contends next that in failing to list the savings account held in joint tenancy in the Deerfield Savings and Loan Association on the Form 600, "Application for Inheritance Tax Consents," filed with the Attorney General, he was not attempting to conceal its existence. He testified at the first hearing on the citation proceeding that he did not list the savings account on the Form 600 because he had deposited $5000 into the account in which there was a balance of $5300 at the time of Verna Johnson's death. At the second hearing he shifted his position and stated that he had given $5000 to Verna Johnson and her mother in cash and checks over a period of years. The record shows clearly that although he had knowledge of the account at the time he prepared the Form 600, he failed to include it therein and subsequently withdrew the funds without informing the financial institution of Miss Johnson's death.

Although the Commissioners made no mention of it, the record shows that this account was originally opened as a certificate account in the names of Verna Johnson and her father and mother. After the death of her father, the account was carried in the names of Verna Johnson and her mother and after the death of her mother the certificate account was transferred into a savings account in Verna Johnson's name alone. On July 10, 1964, ownership of the account was changed to a joint tenancy comprised of Miss Johnson and respondent. On March 12, 1966, respondent withdrew the entire balance and the account was closed. The records of the savings and loan association show that inheritance tax consents were not received at the time of any of these transfers. In the citation hearing respondent testified that he did not obtain a tax consent at the time of the mother's death because the account had been transferred to Verna Johnson prior to the mother's death. The record shows, however, that the transfer to the name of Verna Johnson alone occurred approximately one month after the mother's death. The records of the Deerfield Savings and Loan Association also show that it was not notified of the deaths of the father, the mother or Verna Johnson until the administrator notified it of Verna Johnson's death.

The report of the Commissioners goes into some detail concerning a $6500 withdrawal from the joint savings account on February 13, 1965, and concludes that the respondent's testimony in the citation proceeding was untruthful. The ...


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