Court Opinion

ID: 9764740
Source: CourtListenerOpinion
Date Created: 2023-08-29 03:38:31.864969+00
Date Added: 2024-06-11T07:30:01.248500
License: Public Domain

William J. Brennan, Jr., J.
(dissenting). The majority-finds that the activities of the mortgage company, the advertising and the sales efforts, were carried on primarily to produce professional legal employment for the law partnership so that respondents as the law partners and the owners of the mortgage company are guilty of violating Canon 27. But the majority opinion recognizes that the mortgage company realizes “substantial profits” from brokerage and “percentage point” and processing fees incurred by financial institutions which acquire the mortgages through the mortgage company, which fees are either paid by the institutions or are passed on by the institutions to the mortgagors. This income. apparently exceeded by a considerable amount the legal fees received by the law partnership before its dissolution. The record, as I read it, clearly supports the inference that the advertising and sales efforts were directed exclusively to garnering the mortgage business and the mortgage fees which go with it; the professional work obtained by the partnership was an incident and not the object of the mortgage company’s activities.
The majority also finds that the mortgage company, in violation of Canon 35, was interposed as an intermediary between the law partnership and those for whom legal services were rendered, the “customers” of the mortgage company. But the “customers” for whom legal services were rendered were primarily the mortgagees who loaned their money through the agency of the mortgage company, and I fail to see how the legal services rendered on behalf of the mortgagees could be said to have been performed in the interest of the supposed intermediary. True, the mortgagors, almost entirely individuals purchasing homes and apparently most of them G. I.’s, who responded to the opportunity offered them by the advertising to get mortgage loans through the mortgage company were often required to pay legal fees *560charged for the services rendered to the mortgagees, and also the other charges for non-legal services. But that was a condition imposed by the mortgagees and is common and accepted practice in all such mortgage transactions and does not make the mortgagors the “customers” in any true sense. It may be that the mortgagors frequently did not retain their own attorneys independently to advise them as to the form and legal significance of the mortgage documents, but it is clear that they were entirely free to do so. It is also clear that the mortgagors paid no additional fees to the partnership.
The violation of Canon 47 is rested primarily upon the finding that the mortgage company offered a form of “one package deal” comparable to that condemned by this court in In re L. R., 7 N. J. 390 (1951). This is attempted to be spelled out of the “publicity for the company’s efficient and quick service in handling mortgage loans,” the advertising of “the unusual facilities of its title plant and quick service ‘under one friendly roof,’ ” and, as to some G. I. loans, the inclusion in the down payment of an amount for legal services. I cannot find that the advertisements anywhere emphasize legal services in the manner highlighted by the practitioner involved in In re L. R. They strike me as being more concerned with emphasizing the company’s talent for cutting through the red tape incident to mortgage financing under governmental auspices, particularly as they involve G. I. loans. The inclusion of the legal fees in the down payment was nothing more than part of the program of the federal agencies to liberalize the terms upon which G. I.’s could purchase homes.
In any event, this case involves only questions of professional propriety. There is no suggestion that respondents did anything dishonest or that they imposed upon or dealt unfairly with the mortgagees, the borrowers or the public. The rules they are charged with transgressing are of the kind which it has been said “have as their main object to secure that no member of the profession shall have any but a purely professional interest in his work, by excluding the incentive of speculative profit,” and the incidental object also “to pre*561vent the economic standards of the profession being lowered by unscrupulous competition,” E. H. Tawney, The Acquisitive Society (1920). The obligations assumed by the practitioner thereunder when he joins the profession help preserve and foster the ideal of the profession, which subordinates the criterion of financial return as the mark of success, and the essence of which is that “though men enter it for the sake of livelihood, the measure of their success is the service which they perform, not the gains which they amass.” Tawney, supra.
It is to be regretted that all who engage in the practice of the law do not primarily reserve themselves for the practice of their profession only. A business man seeking business may with complete propriety employ methods which if resorted to by a lawyer desiring professional employment would be dishonorable because unprofessional. The profession and the public interest are better served by the lawyers, fortunately the great majority, who do not attempt to make the inherently incompatible admixture. But our professional code does not require that practitioners refrain from commercial pursuits while at the same time actively practicing their profession. Chief Justice Qua of the Massachusetts Supreme Judicial Court has noted thát “commonly a member of the bar is free to engage in commercial pursuits of an honorable character and to advertise and to extend his purely mercantile business honestly and fairly by ordinary commercial methods.” In re Thibodeau, 295 Mass. 374, 3 N. E. 2d 749, 750, 106 A. L. R. 542 (1936). The business, however, must not be merely. a cover behind which to solicit professional employment by methods denied the lawyer although proper for the business man seeking business for a business.
When alleged professional conduct concerns only matters of professional propriety, the attitude of the lawyers under inquiry toward their obligations under our professional code is, of course, of first importance. The majority says that the respondents “obviously resolved all doubts in their own favor and against the Canons of Professional Ethics, notwithstanding the fact that they must have been conscious *562of their precarious position.” I do not have that impression from my reading of the record. I see no evidence that their effort to live up to their professional obligations was and is not sincere. The evidence impresses me the other way. Mr. 'Irving first sought advice as far back as "the early part of 1946 and 1947” when the rapidly accelerating growth of the' mortgage enterprise cramped their quarters and the practical difficulties of avoiding the mingling of personnel and activities became apparent. Changes were initiated from time to time to accomplish not only the fact but also the appearance of separateness between the mortgage business and the professional practice. These changes were made both before and after our decision in In re L. R., supra, and culminated in the arrangement which now exists and which existed at the time of the hearing before the committee. Under that arrangement the partnership of Rothman & Irving has been dissolved, nothing remotely suggesting legal services is done by the mortgage company or its affiliates, (indeed, I discover no proof that this ever was the case), Mr. Rothman devotes himself exclusively to the management of the mortgage business and has no participation in the proceeds of the law practice which Mr. Irving carries on with his own staff in quarters completely separated from, though located in the same building with, the mortgage company and its affiliated enterprises. In that posture of affairs it seems to me that, there being nothing whatever to indicate that the precautions taken to separate the business from the law practice now carried on exclusively by Mr. Irving aré not real or that they cover any subterfuge, the respondents should be judged upon whether their present arrangement violates the canons or any of them and not upon practices or methods which have been abandoned. This was the conclusion reached by the Massachusetts Supreme Judicial Court in the not dissimilar situation presented in In re Thibodeau, supra, and appeals to my sense of justice and fairness to practitioners whose endeavors to live up to their professional obligations do not appear, on this record, to be lacking in sincerity. I agree that the mortgage company’s *563advertisements might be still further revised as regards the references to Mr. Eothman, the lawyer, bnt I see no reason to question the earnestness of the proffer by respondents at the opening and close of the hearings and repeated on the oral argument to make any additional changes indicated by the committee or the court as desirable in the interest of complete and literal compliance with the canons.
It is, of course, true that Mr. Irving’s professional income is and.probably will continue to be realized largely from the professional work which comes to him from the mortgage company and its affiliates. In that sense the mortgage company is the “feeder” of his law practice.' While he' has no part whatever in the management of the mortgage business he is a one-third owner thereof and perforce shares in its success to the extent of the dividends on his stock interest. 'Is Mr. Irving’s present situation, which, in my view, is the only just area of inquiry, in truth so “far removed” from that of innumerable'past and present leaders of the bar who have been and are identified in executive capacities, as directors, and as owners, with building and loan associations, insurance companies, savings and loan associations, banks and trust companies, and like socially useful enterprises, with the result and in some cases for the purpose of having their law practices benefit from these connections? Neither the institutions nor the law practices which serve them have ever been any less socially useful because of the connection. And such institutions are of course peculiarly fruitful sources of legal work. If respondents’ present arrangement, including Mr. Irving’s retention of his one-third stock interest, is contrary to the canons, so also are these other arrangements which the bar knows are commonplace throughout the State. If these practices are to be prohibited that should be accomplished by unmistakable rules to be applied prospectively and equally among all members of the bar. Upon the plainest principles of simple fairness in the exercise of our disciplinary powers, these respondents should not be singled out for punishment.
Justices Wachenfeld and Jacobs join in this dissent.
*564Guilty and for reprimand — Chief Justice Vanderbilt, and Justices Heher, Oliphant and Burling — 4.
Not guilly and for dismissal — Justices Wachenfeld, Jacobs and Brennan — 3.