With respect to Giordano: For acceptance of resignation with prejudice -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. Opposed -- None. With respect to Henneberry: For suspension for six months -- Chief Justice Weintraub and Justices Jacobs, Francis, Proctor, Hall, Schettino and Haneman. Opposed -- None.
The Monmouth County Ethics Committee returned two presentments charging respondent A. Henry Giordano with unethical conduct. The proceeding against respondent James F. Henneberry, Jr. grew out of conduct coming to our attention in one of the Giordano proceedings. We directed the Committee to hold a hearing and report to us thereon, upon receipt of which we issued an order to show cause why Henneberry should not be disbarred or otherwise disciplined, as had previously been done with respect to the Giordano presentments. Disposition of the Giordano charges has been withheld pending completion of the Henneberry matter.
The Giordano presentment which does not concern Henneberry involved a charge of improper withholding of a real estate broker's commission received by Giordano as trust funds at a title closing. The sum was finally paid over after the complaint was filed with the Committee, which, while properly critical of his handling of the matter, did not find unethical conduct in that connection. Giordano had, however, used moneys in his trust account for purposes other than those for which they were to be held and the Committee reported him guilty of violating Canon 11. There can be no question of the correctness of that finding.
The other presentment and the Henneberry proceeding derived from Giordano's representation of a criminal defendant and Henneberry's participation in a loan transaction to raise the fee Giordano exacted. Walter DeGrote, Sr., an
elderly man of limited education and little business experience, who earned his living as a clammer in Monmouth County, had a son who was in difficulties there. He had pleaded non vult to a larceny charge and, on June 12, 1960, while on bail awaiting sentence, was arrested for carnal abuse of a 13-year-old girl. On June 24 he was sentenced to an indeterminate term in Bordentown Reformatory on the larceny charge and commenced serving the sentence. Neither respondent had any connection with the larceny case.
About this time the father retained Giordano to defend the son on the carnal abuse charge and paid him a $150 retainer. No fee was fixed or apparently even discussed at that time. A short time later, on July 13, DeGrote paid Giordano an additional $500 at the latter's request. He said no mention was even then made of the total fee, but Giordano testified he indicated it would be $3,500 and that DeGrote agreed. Be that as it may, some time thereafter Giordano asked for a further $3,000. DeGrote said it was on the representation that if it was paid, Giordano would get the son out of jail within six months. The latter denied any such representation and the Committee found that the evidence did not establish any had been made. DeGrote did not have the money and, while he apparently did not object to the figure, said it could only be obtained by a mortgage on one of two properties he owned in Port Monmouth. One property was his dwelling; the other was also a residence. Both were of relatively low value and subject to first mortgages. There is no question but that Giordano offered to obtain a second mortgage loan to satisfy the fee. DeGrote testified it was to be secured by only one property. Giordano said it was understood the mortgage was to cover both. In any event DeGrote realized that he could never pay the proposed loan except through a sale of one of the properties and he said Giordano assured him he would never be without a home.
On August 14 the son signed an agreement, presented to him at the reformatory, agreeing to pay Giordano $3,000 "in addition to retainer heretofore paid." The son testified nothing
was said then about the proposed mortgage and that Giordano told him he could pay the sum from his earnings as a clammer after his release from prison. The record is not clear whether the son's agreement was signed before or after Giordano and the father had their conversation about the loan, and it is equally uncertain whether during this period it was understood the son would go to trial on the charge or would enter a plea.
Around this time, whether before or after payment of the additional $3,000 was agreed to is not apparent in the evidence, but before any further fee payment was made or anything occurred with reference to the proposed mortgage, Giordano conferred with the Chief Clerk of the Monmouth County Prosecutor's Office, a lay employee, about a reduction of the carnal abuse charge. According to the testimony of the Chief Clerk, taken by the Committee on remand by this Court to explore this phase of the matter, the charge (as to which an indictment had not been returned) was reduced to attempted carnal abuse, although, as the Chief Clerk testified, the State's evidence of a completed offense was "strong" -- "they were caught red-handed and he admitted it." On August 24 the son entered a plea of non vult, on waiver of indictment, to an accusation for the attempt.*fn1
The second mortgage loan was consummated on September 28, after young DeGrote had entered the plea and the only thing remaining was the imposition of sentence. This brought about the involvement of Henneberry, who otherwise had no
connection with the DeGrotes or with Giordano in the criminal matter. Henneberry was then or formerly a relative of Giordano by marriage. Admittedly, Giordano solicited Henneberry to obtain a loan after he had been unsuccessful elsewhere and the latter procured a corporate client in the realty investment business, Lehmann-Gerth Estates, Inc., to make it. Giordano testified that he informed Henneberry that the DeGrotes "owed me a fee and so forth, and if he could get it, it would be as a personal favor to me and to the DeGrotes." (Henneberry had previously testified that he understood the DeGrotes wished a short term loan to consolidate some debts pending a sale of the properties; he was not thereafter questioned about Giordano's testimony in this regard.)
It is undisputed that Giordano took the elder DeGrote and his wife to Henneberry's office on September 28 where they met the latter for the first time. DeGrote's brother testified he was also present, but Giordano and Henneberry said he was not. At least no one else was there. The DeGrotes at that time signed documents for a second mortgage loan from Lehmann-Gerth Estates, Inc., in the amount of $3,000 covering both properties, payable in four months, with interest at 6%. They contended before the Committee that they were not advised the mortgage included both properties, but the ...