In re Levy

260 A.D. 722, 23 N.Y.S.2d 414, 1940 N.Y. App. Div. LEXIS 4701
CourtAppellate Division of the Supreme Court of the State of New York
DecidedNovember 22, 1940
StatusPublished
Cited by1 cases

This text of 260 A.D. 722 (In re Levy) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Levy, 260 A.D. 722, 23 N.Y.S.2d 414, 1940 N.Y. App. Div. LEXIS 4701 (N.Y. Ct. App. 1940).

Opinion

Martin, P. J.

The respondent Louis S. Levy was admitted to practice as an attorney and counselor at law of the State of New York by this court on February 17, 1902. The Association of the Bar of the City of New York on December 19, 1939, filed charges against him alleging professional misconduct. The respondent served an answer thereto and a referee was appointed to hear the testimony. The report of the referee states that the charges set forth in the petition have been sustained and that the respondent was guilty of professional misconduct.

The conduct of Mr. Levy was the subject of a disciplinary proceeding in the United States District Court for the Southern [723]*723District of New York (.Matter of Levy, 30 F. Supp. 317). The decision in that proceeding, as pointed out by the referee in his report, is “ not binding or of any force in this proceeding.” The facts which are the basis for this disciplinary proceeding have been fully set forth in the opinion in the Federal court, rendering necessary a recital, herein, of only the more important details.

In the spring of 1932 there were pending in the United States Circuit Court of Appeals, Second Circuit, appeals in two stockholders’ representative actions instituted on behalf of the American Tobacco Company against certain of the officers of the company and growing out of a bonus plan by which the officers and employees were permitted to subscribe for shares of the common stock of the company at twenty-five dollars a share at a time when the stock was being sold in the market in excess of $100 a share. The claimed liability of the defendants amounted to millions of dollars. The defendants were represented by the law firm of which respondent Levy was a member. Martin T. Mantón was then senior judge of the Circuit Court of Appeals in the Second Circuit and respondent's relations with Mantón were intimate and friendly. Levy had known Mantón since their law school days; had interested a partner in Manton’s ambition to secure an appointment to the Federal court, and in the prosperous days of the 1920’s had become a stockholder financially interested in a manufacturing corporation in which Mantón was the dominating factor. He was familiar with Manton’s ventures in connection with commercial and real estate enterprises and, in fact, had taken an active interest in an effort to dispose of a large parcel of real estate controlled by Mantón.

While the American Tobacco Company litigation was pending in the court of which Mantón was senior member, Mantón was in serious financial difficulties and respondent knew of the situation. Through respondent’s assistance there was made available to Mantón the proceeds of what has been called a 11 loan ” of $250,000. The moneys which benefited Mantón were furnished by an agency known as Lord and Thomas, Inc., through Mr. Albert D. Lasker who was then and had been for many years the principal owner of that company. Lord and Thomas, Inc., as advertising counsel had received millions of dollars in commissions from the American Tobacco Company. There was no apparent reason for the advertising agency of the tobacco company making the loan to Mantón. It was first approached as a medium for making the loan by Paul M. Hahn who was then assistant to the president of the American Tobacco Company. He knew the importance of the stockholders’ litigation; he had been a junior partner in respondent’s law firm [724]*724and, in fact, owed his position there and his more important position with the tobacco company to the respondent’s interest in him. The referee has found that “ * * * Mantón used Sullivan and Levy used Hahn and succeeded in arranging the loan through Lasker in the offices of the American Tobacco Company.” As a result of Hahn’s activities in the loan transaction here under review, he was made a respondent, with Levy, in the disciplinary proceedings in the Federal court. He escaped censure there, the suggestion being that he was a victim of the imposition of this respondent.

Belief to Mantón took the form of a loan to one James J. Sullivan who had been associated with Mantón in his commercial and real estate ventures. The report of the referee points out that Levy knew that Sullivan was a “ dummy ” acting for Mantón, and the referee properly characterizes the arrangement for the loan ” as a plan to conceal the real transaction.

In June, 1932, at about the time the funds were placed at the disposal of Mantón, a two-to-one decision was rendered in favor of the defendants in the American Tobacco Company litigation by the Circuit Court of Appeals in the Second Circuit, and the prevailing opinion was written by Judge Mantón. The charge here under consideration grew out of Levy’s activities during the pendency of that litigation.

Throughout the hearing before the referee an effort was made to prove that the so-called loan of $250,000 to Mantón in reality was initiated by respondent’s law partner, Thomas L. Chadbourne, and that respondent was merely a conduit for the carrying through of the arrangements. In 1938, prior to the institution of disciplinary proceedings against the respondent, Chadbourne died. As frequently happens in proceedings of this character, the blame is sought to be placed on a dead man. However, in this proceeding, documentary evidence directly connected respondent with the transaction and destroyed his claim to the role of messenger. Four days after Chadbourne had sailed for Europe, a letter dated April 26, 1932, purporting to have been written by Sullivan was sent to the respondent. Only after it became apparent that the receipt of this letter could not be successfully denied did the respondent admit its receipt. The letter referred to the loan of $250,000 which we are endeavoring to place through you ” (respondent). It was established that this letter was typed by Manton’s secretary on the same typewritter on which Mantón was at that time corresponding with respondent concerning one of the former’s real estate ventures, and Sullivan’s name was placed at the foot of the letter by Manton’s secretary. The paper [725]*725on which it was written bore the government watermarks. It is evident that Levy and those associated with him clearly appreciated the damaging effect of this letter. The history of this important piece of evidence leaves no doubt that an attempt was made to conceal it from the scrutiny of those investigating respondent’s connection with the entire matter. Before the Federal grand jury, in the early part of 1939, Levy testified, in answer to a direct question, that he had no correspondence whatsoever about the Sullivan loan. He now admits that he received the letter in question, but maintains that it had completely passed out of his memory until it was shown to him by one of his partners on July 19, 1939, a few days before the hearings in the disciplinary proceeding in the Federal court. The record shows that in February, 1939, while respondent was appearing before the grand jury, one of his associates was delegated to assemble the factual data in the matter. In a file containing other papers the letter in question was turned over to respondent’s partner, David S. Hecht, by a former associate, George W. Whiteside, who, at that time, commented on the importance of the letter. Whiteside clearly knew its value as evidence. The letter remained in Hecht’s possession from February 23, 1939, until March 4, 1939, when Hecht returned the file to Whiteside, despite the latter’s protestations. The file and the letter remained in Whiteside’s office until June 22, 1939, when Hecht again took possession thereof.

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Related

In re Levy
261 A.D. 229 (Appellate Division of the Supreme Court of New York, 1941)

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Bluebook (online)
260 A.D. 722, 23 N.Y.S.2d 414, 1940 N.Y. App. Div. LEXIS 4701, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-levy-nyappdiv-1940.