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ETHICS OPINION 282-1930
ETHICS OPINION 282
NUMBER 282 1930
Question, is it proper conduct for a lawyer, on behalf of his client. to accept from one of the title and mortgage companies a payment in any form made by the mortgage company, arising from die fact that the lawyer places-guaranteed mortgage loans through it (that is. invests funds of a client, individual or estate, in such guaranteed mortgages of such title and mortgage company) provided the lawyer does not retain the payment but turns it over to his client? The title and mortgage company states that it does not make such payments to all; lawyers but does so only to selected lawyers who do or may place considerable funds in the course of the year in such guaranteed mortgages for clients. The work of the lawyer in connection with such matters is to consider the property covered by the mortgage either from his general knowledge or at times by personal inspection of the property, the examination of the bond mortgage and assignment title policy and survey and policy of guaranty, but not of the searches or abstract of title.
If the lawyer is a trustee of the estate which invests the money in such guaranteed mortgages, would such fact change the answer?
If the investment were made in guaranteed mortgage certificates instead of guaranteed mortgages, would such fact change the answer?
Answer. It does not appear from the question that the payment is calculated to induce the lawyer to neglect any reasonable precaution to safeguard his client or the estate, and it does appear that the lawyer does not retain any part of the payment for himself.
In the opinion of the Committee there is nothing improper in the proposed conduct of the lawyer, whether he be a trustee or not, and whether the investment be made in guaranteed mortgages or in guaranteed mortgage certificates. Obviously, if the lawyer be the trustee or the attorney for the trustee, the money should be accounted for to the trust estate.
The Committee expresses no opinion upon the rights of a trustee to make such investments.