In Re Complaint as to the Conduct of Brown

493 P.2d 1376, 262 Or. 171, 1972 Ore. LEXIS 464
CourtOregon Supreme Court
DecidedFebruary 24, 1972
StatusPublished
Cited by7 cases

This text of 493 P.2d 1376 (In Re Complaint as to the Conduct of Brown) is published on Counsel Stack Legal Research, covering Oregon Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Complaint as to the Conduct of Brown, 493 P.2d 1376, 262 Or. 171, 1972 Ore. LEXIS 464 (Or. 1972).

Opinions

PER CURIAM.

This is a disciplinary proceeding by the Oregon State Bar charging the accused with unethical conduct. Most of the charges in the complaint arise out of the accused’s acts, or failure to act, while serving as attorney and administrator in Lane County, Oregon, of the estates of Robert and Marion Beach and their two sons.

Mr. and Mrs. Beach and their two sons died intestate as a result of an airplane accident on January 28,1957, and left a 20-year-old daughter, Garnet Claire Beach Ratley (hereinafter referred to as Garnet), as their sole heir.

The deceased parents were engaged in four sawmill and timber operations in Oregon at the time of their deaths. Two of the businesses were Oregon corporations, of which they owned all of the corporate shares, and two were conducted as partnerships. They also had an interest in and operated a timber, logging, and sawmill business in Siskiyou County, California.

The accused had been a friend of the deceased parents. He was appointed administrator of each of the four estates on January 9, 1958, upon the petition of Garnet, the sole surviving heir, who was then married and living in Mt. Shasta, California. As administrator, he acted as president of the two Oregon corporations and managed the partnership businesses.

[173]*173The deceased parents also owned a 50 per cent interest in the Oakridge Funeral Home, including the real property, in partnership with Mr. and Mrs. Dewey Mattie. In 1965, the accused, as administrator, sold the estates’ 50 per cent interest to the surviving partners for $10,872.74 cash and a secured promissory note in the amount of $8,564.24.

Dr. Eatley, a dentist, and husband of G-arnet, was appointed administrator of the deceased parents’ estates in ancillary probate proceedings in Siskiyou County, California. However, the accused made numerous trips to California and participated in an attempt to unravel the affairs of the California operation.

At the time of the deaths of the four members of the Beach family, most of the interested parties, including the accused, believed that the assets of the deceased parents were of substantial value. The value of the California operation and timber holdings was believed to be close to “a million dollars.” Within a few months the accused learned that much of the machinery and assets of the Oregon operations had been transferred to the California undertaking, and that the Oregon businesses (corporations and partnerships) were not profitable. He managed to terminate an unfavorable contract with the Bohemia Lumber Company and liquidated the assets of the Oregon logging ventures. The estates of the two deceased sons were of nominal value. Inventories in each of the parents’ estates were not filed until December 9, 1960.

In November, 1959, Dr. Eatley petitioned the Superior Court in California to terminate the ancillary probate proceedings on the basis that the assets in California were worthless. As early as October 25, [174]*1741960, Twin City Lumber Co., a major creditor of the California operation, filed a petition in Lane County, Oregon, to have the accused removed as administrator of the estate of Bobert G. Beach. The court denied the petition after hearing argument of counsel “provided that the Administrator, Neil Brown, file with this Court by the 9th day of December, 1960, an Inventory and Appraisement in the above-entitled estate and proceed with diligence in the further administration of said estate.” Prior to the filing of the inventory, the accused, as administrator, had petitioned and secured an order confirming the sale of certain of the assets of the two Beach estates. The final accounts in each of the parents’ estates were not filed until July 18, 1969, eleven and one-half years after the accused had been granted letters of administration. By the time the accused had filed his 1961 account in the estates, $18,000 had been paid to Twin City Lumber Co. on their claim filed in the Oregon probate proceedings. A total of $51,000 was paid to this California creditor, $12,000 of which was paid by the accused from his personal funds and the balance from assets of the Oregon estates. Numerous other creditors filed claims against the Oregon estates but they were not paid “because of the statute of limitations.”

Garnet separated from her husband, Dr. Batley, and moved to Eugene to attend the University of Oregon in 1962. In a deposition of Garnet taken on July 2, 1968, and received as an exhibit in the proceedings before the trial committee, she testified that she tried to get the accused to close the estates as early as the spring of 1962 and she could never find out why they were not closed. The accused was questioned regarding his financial problems and he stated, “Well, there isn’t any doubt about that. I was over-extended.” The ac[175]*175eused further testified that Garnet knew he was in need of money and that she offered to borrow some money against certain securities that she owned and make it available to him. He took her to the main branch of the United States National Bank and introduced her to a Mr. Arthur Pullen, and told Mr. Pullen that the purpose of the loan was for Garnet to give him some money. Garnet borrowed a total of $25,000 by December, 1963, which she delivered to him and he deposited the same in his personal account. He also testified that before making this loan he advised her to consult with other counsel and gave her the names of three lawyers. However, he did not know if she consulted with any of them. She pledged her securities with the bank to borrow the $25,000. Her loan to the accused was unsecured and was not evidenced by any writing. He did agree to pay the interest on her notes to the bank but at least two of the interest payments were made from assets of the estate in the amount of $1,865.56. The accused had made commitments to purchase two pieces of land, one north of Coburg, Oregon, and the other south of “Spencer Butte.” The $25,000 was used for payment on these two pieces of property. The short term notes executed by Garnet were renewed by the bank from time to time. Duplicate notices of interest due on the notes were sent to Garnet and to the accused. The notes were not paid for five years and this indirectly resulted in Garnet bringing action against the accused to recover the amount of the loan. This action was settled in the latter part of 1968. The settlement was effected by counsel for respective sides. The settlement required the accused to pay $13,111.22 to the United States National Bank of Oregon on account of the Garnet notes, and $6,888.78 to Garnet. The accused was given credit for $12,000, the sum he [176]*176claimed to have personally advanced on behalf of the estates to settle claims by estate creditors in California. In this connection, the accused took an “Assignment of Interest in Estate” from Garnet of “all of her right, title and interest” remaining in the estates of Marion J. Beach and Robert G. Beach, deceased. The above facts are either admitted or the testimony of the accused confirms the same.

The Bar charged the accused with eleven causes of complaint, setting forth various acts of misconduct and unethical practice. Nine of the complaints arise out of the accused’s mishandling of and failure to wind up the affairs of the four estates. The Board of Governors, nine voting, found the accused guilty as charged in seven of the causes of complaint. The accused appeals, arguing that the most that can be said against him is that he is guilty of procedural violations in his administration of the estates.

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In Re Complaint as to the Conduct of Brown
493 P.2d 1376 (Oregon Supreme Court, 1972)

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Bluebook (online)
493 P.2d 1376, 262 Or. 171, 1972 Ore. LEXIS 464, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-complaint-as-to-the-conduct-of-brown-or-1972.