Opinion ID: 2467267
Heading Depth: 1
Heading Rank: 1

Heading: Whether An Attorney Who Is a Salaried Employee of a Corporation May Prepare Mortgages To Which The Corporation Is a Real Party In Interest?

Text: II. Whether the Completion of Blanks on Standardized Mortgage Form By a Lay Employee, Pursuant to the Instructions of the Attorney Who Prepared the Form and Upon Which a facsimile of His Signature as Preparer Appears, With Information Which IS Common Knowledge and With Information Provided by Another Attorney Constitutes The Preparation of a Legal Instrument and, Therefore, The Unauthorized Practice of Law? (A) Whether Filling Uncompleted Spaces, Under the Facts and Circumstances of This Case, Requires the Exercise of Legal Knowledge or Legal Skills by the Lay Employee? (B) Whether A Lay Employee Who Transcribed Information Into Blanks on Prescribed Legal Forms Pursuant to an Attorney's Instructions Is Practicing Law? Though we do not have the information necessary to determine whether the Bank is in fact or law a real party in interest to loan transactions between local production credit associations and the borrowing public, we shall assume for the purposes of this opinion that it is, and that the local PCA therefore is an arm of the Bank. Three of our opinions in recent years express principles that should be borne in mind with reference to this case. Kentucky State Bar Association v. First Federal Sav. & L. Ass'n., Ky., 342 S.W.2d 397, 85 A.L.R.2d 178 (1961), held that although a corporation may properly employ its own licensed attorney to render legal services wholly for itself, it cannot sell to the public a service that includes legal services performed by its salaried attorney. Under this decision we are of the opinion that a lending institution certainly may have its mortgages drafted by its own counsel, so long as it collects for itself no charge against the borrower for that service and, as emphasized hereinafter, either its own counsel or some other licensed attorney passes judgment on and is responsible for the final product. Frazee v. Citizen's Fidelity Bank & Trust Co., Ky., 393 S.W.2d 778, 784 (1965), held that a bank or trust company cannot, through either salaried attorneys or lay employees, prepare deeds or mortgages for other persons; and Kentucky State Bar Association v. Tussey, Ky., 476 S.W.2d 177, 179 (1972), held that a lay employee cannot prepare legal instruments for his corporate employer, even though the employer is a party to the instrument. Addressing ourselves to the question as it was presented to and answered by the Bar Association, we are of the opinion that when a lending agency presents to the borrower for execution a real estate mortgage that has been completed on a form prepared by one lawyer, with information such as the property description and payment schedule copied by a lay person from a loan application and a title certificate furnished by another attorney, neither of the respective attorneys having examined the instrument in its final form prior to execution by the borrower, the lending agency is practicing law without a license. As a corollary proposition, it is fundamental that no person, lawyer or not, can truthfully certify that he has drafted an instrument unless and until it is completed and ready for signature, because until then it is not an instrument, but merely a form that can be sold by the bundle at any bookstore. It is no answer in this particular instance to say that each of the parts has been prepared by a licensed attorney. The fact is that when the instrument is presented to the unschooled layman as a fit and proper subject for his signature neither attorney has seen or passed on it as a whole. Of course we shall not be trapped into declaring that when a typist copies a property description into a deed or mortgage form she is practicing law. Cf. Carter v. Brien, Ky., 309 S.W.2d 748, 749 (1956). It is the person for whom she is doing the work, and who will pass upon and cause the completed product to be presented for signature, who undertakes the responsibility for its legal sufficiency. [1] Cf. Pioneer Title Trust Ins. & Trust Co. v. State Bar of Nevada, 74 Nev. 186, 326 P.2d 408, 411 (1958). In order to conform to the requirement that its mortgage be prepared by a licensed attorney it would be necessary for the local PCA (a) to return the final instrument to the Bank for approval and endorsement by its counsel or (b) to have the final instrument inspected and endorsed by local counsel [2] as the responsible drafter. One or the other must be done after the instrument is ready for signature and before it is signed. In summary, Advisory Opinion U-11 of the Kentucky Bar Association is affirmed. Full court sitting. All concur.