Case Name: In the Matter of the Application of The Associated Lawyers' Company, Petitioner
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1909-10-22
Citations: 134 A.D. 350
Docket Number: 
Parties: In the Matter of the Application of The Associated Lawyers’ Company, Petitioner.
Judges: 
Reporter: Appellate Division Reports
Volume: 134
Pages: 350–353

Head Matter:
In the Matter of the Application of The Associated Lawyers’ Company, Petitioner.
First Department,
October 22, 1909.
Attorney and client — practice of law by corporation — section 380, Penal Law, construed — court — when Appellate Division will not authorize corporation to practice law.
The Appellate Division is only authorized by section 280 of the Penal Law to approve the right of a corporation to practice law where it is organized, for benevolent or charitable purposes, or for the purpose of* assisting persons without means in the pursuit of any civil remedy.
The court will not authorize a business corporation to practice law where it is organized to do a general law and collection business, to make agreements with and employ attorneys and other representatives for the transaction of such business, even though it appears that the greater part of its business is the collection of claims without resort to law.
So far as the business of such corporation is confined to the collection of claims without legal proceedings, it is not within section 280 of the Penal Law, which prohibits the practice of law by corporations.
Application by the Associated Lawyers’ Company pursuant to section 280 of the Penal Law.
Edward M. Shepard, for the petitioner.

Opinion:
Per Curiam :
The petitioner was incorporated under the Business Corporations. Law as a stock corporation " to do a general law and collection business; to make agreements with, and to employ such attorneys at law and other representatives, employees and sub-agents of such corporation as may be desired for the transaction of such business." The corporation was formed by lawyers, and has a capital stock of $125,000, all the stockholders being practicing lawyers except five. It is alleged in the petition that " by far the greater part of its business consists of the collection of claims without resort to law. When suits need to be brought, they are intrusted specifically to lawyers who appear in their own name; " that the company employs in various parts of the United States as many as 6,000 practicing lawyers.
This application is made under section 280 of chapter 88 of the Laws of 1909, added by chapter 483 of the Laws of 1909, being chapter 40 of the Consolidated Laws, and known as the Penal Law. That section makes it unlawful for any corporation to practice or appear as an attorney at law for any person other than itself in any of the courts of this State, or to hold itself out to the public as being entitled to practice law, or to render or furnish legal services or advice, or to furnish attorneys or counsel, or to render legal services of any kind in actions or proceedings of any nature, or in any other way or manner, or in any other manner to assume to be entitled to practice law. It was also made unlawful for any corporation to solicit itself, of by or through its officers, agents or employees, any claim or demand for the purpose of bringing an action thereon, or of representing as attorney at law, or for furnishing legal advice, services or counsel to, a person sued or about to be sued in any action or proceeding, or against whom an action or proceeding has been or is about to be brought. The act then provides: " This section shall not apply to any corporation lawfully engaged in a business authorized by the provisions of any existing statute, nor to a corporation lawfully engaged in the examination and insuring of titles to real property, nor shall it prohibit a corporation from employing an attorney or attorneys in and about its own immediate affairs, or in any litigation to which it is or may be a party, nor shall it apply to organizations organized for benevolent or charitable purposes, or for the purpose of assisting persons without means in the pursuit of any civil remedy, whose existence, organization or incorporation may be approved by the Appellate Division of the Supreme Court of the department in which the principal office of said corporation may be located." And this application is made for the approval of the petitioner by this court under the provisions of the section last cited.
It seems to us quite evident that the only authority given to this court is to approve "organizations organized for benevolent or charitable purposes, or for the purpose of assisting persons without means in the pursuit of any civil remedy." While it has never been legal for a corporation to practice law, a system has grown up by which corporations undertake to procure attorneys for the transaction of the law business of its clients, and while the legality of such corporate action has been doubted, the impropriety of allowing corporations to enter into such business has been universally recognized and by this legislation it has been prohibited.
There was exempted from the prohibition provided for in this act a corporation lawfully engaged in a business authorized by the provisions of-any existing statute, a corporation lawfully engaged in the examination and insuring of titles to real property, and the act itself is not to prevent a corporation from employing an attorney or attorneys in and about its own immediate affairs or in any litigation to which it was a party. These provisions evidently did not require that this court should approve such corporate action to prevent its being affected by the provisions of the act. It certainly was not intended that a corporation should not employ a lawyer to defend it without the approval of this court, so that corporations which had been lawfully acting under the existing provisions of law or the title guarantee companies should be required to receive the approval of the court. It seems to us clear that this exemption applied generally to corporations coming within its terms. There were in existence, however, certain corporations that had been organized for the purpose of aiding those who were without means to obtain competent legal advice. It was recognized that such corporations were protecting the poor and improvident and where such a corporation obtained the approval of the court it should be allowed to continue its work and to it the prohibition of the statute should not apply.
We think, therefore, that the granting of this application would be entirely ineffective to allow the petitioning corporation to disobey the provisions of this section and that the court is given no authority to authorize it to continue to perform any act which this statute prohibits. It is quite clear that so far as the business of this corporation is confined to tire collection of claims without legal proceedings it is not affected by this statute.
It is not necessary for us now to determine just what portion of its business this statute will prohibit, but we are satisfied after care fui consideration that this corporation is not one whose " existence, organization or incorporation " this court is authorized to approve, and the application must, therefore, be denied.
Present — Patterson, P. J., Ingraham, Clarke, Houghton and Scott, JJ.
Application denied.