Opinion ID: 1771061
Heading Depth: 1
Heading Rank: 2

Heading: law did labarre and barber convert the proceeds received from the sale of the house from gold and jabour?

Text: We remanded this case to determine whether Gold's funds retired the indebtedness that existed on the property on February 15, 1980. Resolution of this issue necessarily determines whether Gold had an interest in the Barber property. Where a grantee retains title to land and holds it for the benefit of another in order to secure a loan made by the grantee, the conveyance is a mortgage. The mortgage is evidenced by a deed absolute (and the grantee) is entitled to retain title until payment of the claim for which it is held for security. Osborne, Mortgages, § 91 (1970). See also Medders v. Ryle, 458 So.2d 685 (Miss. 1984); Conner v. Conner, 238 Miss. 471, 119 So.2d 240 (1960). The chancellor found that John Bell delivered $46,000 to Alex Gold and Harvey Gold, and that Alex Gold and Harvey Gold in turn lent the money to Huette Barber. He found Gold's loan was evidenced by a receipt for $37,966.53 dated February 15, 1980, which LaBarre signed for Barber's benefit. Further, the chancellor found: The balance of the money was put into a special account and was paid by Mr. Harvey A. Gold and Mr. Alex Gold to pay for work being done on the house ... On appeal the appellant argues that Barber, not Bell, was the source and owner of funds which were the subject of LaBarre's receipt to Gold. True, in their testimony, both LaBarre and Barber denied any knowledge of Bell's loan to Gold for Barber's benefit. The chancellor, however, had ample evidence on which to base his finding. Gold, Bell and Jabour all contradicted LaBarre's claim of ignorance as to the source of the money. LaBarre could not sufficiently explain why he signed a receipt to Gold for $37,966.53 on February 15, 1980. Moreover, these transactions arose because Barber needed money for his used car business. If Barber already had the money to retire the indebtedness on his property as he now claims, he did not need the Golds to participate in the transaction. Because Gold had an interest in the Barber property, he also had an interest in the proceeds resulting from the sale of the property. Although Gold's security interest was not evident on the face of the deed, his interest can be converted by one having actual knowledge of his interest in the property. Ross Cattle Co. v. Lewis, 415 So.2d 1029 (Miss. 1982); Mississippi Motor Finance v. Thomas, 246 Miss. 14, 21, 149 So.2d 20, 24 (1963). There is little doubt that Barber and LaBarre knew of Gold's interest. Barber initiated the transactions and Gold helped negotiate them. Conversion results from conduct intended to affect an owner's interest which is inconsistent with the owner's rights. In order to maintain an action for conversion, the defendant must have acted so as to deprive the plaintiff of his interest. Masonite Corp. v. Williamson, 404 So.2d 565, 567 (Miss. 1981); Mississippi Motor Finance v. Thomas, 246 Miss. at 20, 149 So.2d at 23. The day before the closing, Harvey Gold deeded the property to Jabour and relied on LaBarre's promise to pay him for his interest with the proceeds on the sale. On April 7, 1981, LaBarre and Jabour met with James Cole, president of the American Bank, at Cole's office to transfer title and close a loan. At trial Jabour, the only disinterested party, testified that he was aware of the real nature of the transaction when he purchased the Barber house and was concerned that neither Bell nor Gold would receive the proceeds from the sale. Jabour told the court what happened at the loan closing: Q. Who was it (the check) payable to? A. Johnny Jabour and Oscar LaBarre, an attorney. Q. When you received the check, what did you do with it? A. Well, I never received it. Mr. LaBarre gave it to me to sign, and he was going to disperse the funds. Q. And were those funds dispersed? A. I do not know that, whether they were dispersed or not. They told me they were going to go by and pay off somebody, Mr. Gold. Q. They told you they were going to go by and pay off Mr. Gold? A. Yes, sir. I think the check was cashed and that $10,000 was given to me, and the other money was given to Mr. Barber. Q. All right, sir. Did you question the cashing of the check at the bank? A. I just thought he was going to disperse by the check. I made a statement to that (effect). Other than that, I did not question it. Q. You thought he was going to disperse it by the check? What do you mean? A. Well, all loan closing I have been to they have been dispersed by check. Q. While you were there did you make any phone calls? A. Yes, sir. I did. Q. Who did you call? A. I called John Bell and told him they were closing the loan out and that Mr. Barber was bringing the money, or either Mr. LaBarre by Harvey Gold's office. Q. Why did you call John Bell. A. Because John Bell notified me that he had lent some money to Harvey Gold on the house. Q. Were you aware of the outstanding indebtedness? A. Right. Vol. II, pp. 164-165. Despite LaBarre's assurances that Gold would be paid, he allowed Barber to abscond with the proceeds from the sale. Barber and LaBarre had notice of Gold's interest in the proceeds from the sale to Jabour, and they acted with the intent to deprive Gold of his interest. Thus Gold and LaBarre are liable for conversion. LaBarre suggested that he cannot be liable for conversion because he was only representing Barber in the transactions. In its previous decision the Court reminded LaBarre an attorney has a responsibility to disclose that he represents only one of the participants of a multi-person transaction which is fraught with the probability of conflicting interests. By notifying the other participants of the true situation, they are able to take reasonable steps to protect themselves. Gold v. LaBarre, 455 So.2d at 748; Mississippi Code of Professional Responsibility, EC 5-14 (1971). While an attorney cannot be held liable to third parties for his actions made in furtherance of his role as counselor, he has a duty to refrain from committing tortious acts against third parties. ... Admission to the bar does not create a license to act maliciously, fraudulently or knowingly to tread upon the legal rights of others. (Cites omitted.) Newburger, Loeb & Co., Inc. v. Gross, 563 F.2d 1057, 1080 (2nd Cir.1977). See also Giuliani v. Chuck, 620 P.2d 733, 736-737 (Hawaii Ct.App. 1980). The fact that LaBarre's client received the benefit of LaBarre's tortious act will not relieve LaBarre of liability for conversion. There was nothing in the defendant's status as an attorney for ... (his client) which made it his duty to pay to his client money which he knew, or must be charged with having known, belonged to the plaintiff. (Cites omitted) The defendant had complete control over the money. It was his duty to hold for the plaintiffs so much of the proceeds ... as represented the plaintiff's known interest in it.... Defendant received the entire sum in the first instance and thereupon became accountable to the plaintiff for the part of the money of it as received. (Cite omitted) He could not relieve himself of that accountability by making an unauthorized payment of the whole sum to (his client)... . General Exchange Insurance Corp. v. Driscoll, 52 N.E.2d 970, 973 (Mass. 1944). LaBarre was instrumental in defeating Gold's right to the proceeds of the Jabour sale. LaBarre helped negotiate the transactions. He told Jabour and Gold he would distribute the proceeds to extinguish Barber's debt to Gold. Because of this promise and because LaBarre served as the only attorney closing the transactions, Gold entrusted LaBarre with complete control over the proceeds of the sale. Despite LaBarre's notice of Gold's interest, he gave all but $10,800 of the $80,000 to Barber. Thus, LaBarre as well as Barber is liable for conversion.