On order to show cause why the respondent should not be disciplined.
For suspension for one year -- Chief Justice Vanderbilt, and Justices Wachenfeld, Burling, Jacobs and Brennan. For suspension for six months -- Justices Heher and Oliphant. The opinion of the court was delivered by Wachenfeld, J. Heher, J. (concurring in part). Oliphant, J., joins in this opinion.
[22 NJ Page 212] This disciplinary proceeding comes to us by way of a presentment made by the Essex County Ethics and Grievance Committee. The committee report finds that the respondent (a) exacted an unconscionable fee for handling estate and mortgage transactions, contrary to Canon 12;
(b) violated Canon 6 by representing conflicting interests in transactions between the Orange Land Company, which he owned, and his client; (c) took advantage of the confidence reposed in him by his client and failed to properly and promptly account for trust moneys in his possession and commingled said moneys with his own funds, contrary to Canon 11.
Edward H. Backes was admitted to the bar in May 1927 as an attorney and in 1932 as a counsellor. In November 1954 he was suspended for a year for fraud upon the court in procuring a client's divorce and for willful violation of R.R. 4-11. 16 N.J. 430 (1954). He was reinstated in December 1955. 19 N.J. 621 (1955).
Stephen W. Sutton died testate on September 2, 1949, a resident of Union County, New Jersey. After his last will and testament had been duly probated, the respondent qualified as executor of the estate and thereafter acted in such capacity and as attorney for the estate as well.
The will provided two specific bequests of $100 each for the decedent's widow, the complainant, and his sister, Mary White, and devised the premises, No. 34 Oregon Street, Vauxhall, New Jersey, to his sister, Mary White, "upon the death of my wife, Nellie Sutton," and to his widow "a life interest."
The only assets of the estate consisted of the real estate just mentioned, which, according to the inheritance tax return filed, was valued at $1,250, and a savings account in the sum of $621.97 in the Howard Savings Institution, Newark. No formal inventory or account was ever filed in the Union County Surrogate's Court.
Decedent's wife, Nelly Sutton, filed a complaint with the Ethics and Grievance Committee setting forth in part her financial transactions with the respondent and alleging she had overpaid him a certain sum of money. She said the executor closed the bank account but "made no report about the savings," asserting, "To this day I do not know about it." She wanted to know "what happened to the balance of $613 from the savings account" and "why is there a balance
due on the funeral expenses, because the money was available for these expenses?" She inquired: "Can an executor take over a savings account without giving proper information when asked?"
Mr. Backes, answering the complaint, filed with the committee an account showing a deficit of $538.78. Notwithstanding that the only liquid asset of the estate was the bank account of $621.97, he listed as paid a funeral bill of $439; a hospital bill of $90.25; two $100 legacies; witness fees and surrogate's fees, $22.25; filing fees for recording refunding bonds and releases, $6; long distance calls, $22.75; death certificates, $3; application for birth certificate and filing claim for Social Security, $77.50; executor's commission and counsel fees, $300.
The grievance committee found the respondent exacted an exorbitant fee considering the size of the estate. It computed his fee at $343.90, arrived at by deducting 5% of $621.97, as executor's commissions, from the sum of $300, and adding $75 of the $77.50 charged for "obtaining a delayed birth certificate and filing ...