Court Opinion

ID: 9640414
Source: CourtListenerOpinion
Date Created: 2023-08-22 17:05:38.033208+00
Date Added: 2024-06-11T18:10:29.653390
License: Public Domain

EDGERTON, Associate Justice.
Plaintiffs are the members of a Committee on Suppression of Unauthorized Practice of Law of the Bar Association of the District of Columbia. Defendant is an incorporated trust company. Plaintiffs sought an injunction to restrain defendant from practicing law and from holding itself out as authorized or able to furnish legal services or legal advice. In the District Court Justice Bailey, after a hearing on the merits, found that defendant is not engaged in the practice of law. 22 F.Supp. 177. Plaintiffs appeal from his decree dismissing their bill.
Although no statute here forbids corporations to “practice law,” we assume that they may not do so and that a court may restrain them from doing so.1 “Judges have nearly all been practitioners and they are naturally apt to retain the loyalties and prejudices of their old guild, and to give high value to the claims and qualities of their group. * * * It is, indeed, a difficult matter for the members of one group to resolve with complete fairness the conflict between their own group and other groups.”2 But there are no special tribunals for such conflicts, and courts must resolve them as best they can.
The underlying facts are not disputed. Defendant is' authorized to, and does, carry on a fiduciary business as executor, administrator, trustee, guardian, agent, custodian, and manager. It solicits employment in some of these capacities. Its advertisements state that it “understands tax and investment problems” and “will be glad to discuss estate problems with you and your attorney. * * * Our intimate knowledge of tax laws and how to deal with them is constantly attracting new trust business to us. * * * Why not talk with one of our Trust Officers and learn how you may benefit from the operation of a Living Trust?” In a 32-page booklet entitled “Modern Methods of Administration and Conservation of Estates,” defendant says: “You are invited to discuss your desires with our officers. They do not draw wills; that is a task for your attorney. But they can offer suggestions, based on long experience in the administration of hundreds of estates ■ and trusts, that will help you to make your estate plan fully effective. * * * Have you planned your will to minimize the taxes your estate will be compelled to pay? * * * Have you left part or all of your estate in trust * * * to secure the maximum savings in death taxes ? * * * If your wife is to receive the major portion of your estate for use during her life; your children to receive it. after her death, you can arrange for her to have the income from it, even portions of the principal if necessary, through *273a trust under your will. At her death, the property could be given under the trust to the children, or the trust could be continued for them. By this plan, your estate will avqid possible probate publicity and avoid paying the heavy estate taxes twice. * * * Living trusts group themselves into two general classes, the revocable and irrevocable. * * * You may continue the protection of the trust for successive beneficiaries, subject to the limitations of the law. * * * Our officers will be glad to answer your questions about a living trust, and to give you a more detailed explanation of its advantages.” To create a life insurance trust “you should consult with your attorney and our officers. * * * ”
Twenty of defendant’s officers and employees, including eleven members of its trust department, are members of the bar, Its officers and employees, on inquiries from customers and prospective customers, discuss investment and estate problems, give information about tax statutes and statutes of descent and distribution, and discuss the nature of trusts. No charge is made for these services. Defendant does not advise or attempt to influence or guide a customer as to which of several courses he should pursue. When a customer appears to be confronted with a legal problem, defendant insists that he consult his own attorney.
Defendant draws no wills, either by its attorney-officers (a term used herein to mean officers or employees who are members of the bar) or by outside counsel (lawyers who maintain separate offices). It draws no trust agreements except that (a) simple, stereotyped, revocable and non-testamentary agreements to which defendant is a party are sometimes prepared by attorney-officers, and (b) defendant sometimes has its counsel prepare trust agreements to which it is a party, without making a charge then or later against the customer or the trust estate. Defendant’s attorney-officers prepare, usually on stereotyped forms, custodian and management agreements to which defendant is a party. Defendant sometimes prepares a release of a deed of trust on a printed form, but usually it has deeds, mortgages and deeds of trust prepared by title companies; and it receives no compensation for such services. Defendant prepares income tax returns for about 50 customers, without charge. It prepares, largely by a lay employee, necessary tax returns in cases -where it is a fiduciary. No charge is made for preparation of tax returns and the like; except as employees sometimes do overtime work for which they, and not defendant, are paid by customers.
Defendant’s employees appear before tax officials on behalf of estates of which it is fiduciary, but in contested tax matters it is always represented by outside counsel. In uncontested probate matters it is represented before the Register of Wills and the Probate Court by its attorney-officers. No charge is made for their services, apart from the regular commission of an executor or administrator. No part of their salaries is charged to any particular estate. In contested probate matters defendant is represented by outside counsel, who are paid out of the funds of the estate involved. “Neither defendant, nor any of its officers or employees, ever receive or share in any attorney’s fee paid by any estate, of which defendant is fiduciary.”
Appellants contend, and cite authorities to show, that the practice of law is not limited to the conduct of cases in court but includes the giving of legal advice and the preparation of wills, contracts, and other legal instruments. We have no doubt that one who does those things, and holds himself out to the public as doing them, as a business or profession, practices law. The New York Court of Appeals has held that “Counsel and advice, the drawing • of agreements, the organization of corporations and preparing papers connected therewith, the drafting of legal documents of all kinds, including wills” amounts to law practice. “ ‘To practice as an attorney at law’ means to do the work, as a business, which is commonly and usually done by lawyers here in this country.” People v. Alfani, 227 N.Y. 334, 338, 339, 125 N.E. 671, 673. There the defendant “had an office in which he carried on a real estate and insurance business. Distinct from such work he also drew legal papers, contracts for real estate, deeds, mortgages, bills of sale, and wills. A large sign placed over his * * * window bore the words in big letters ‘Notary Public — Redaction of All Legal Papers.’” (227 N.Y. at page 336, 125 N.E. at page 672.) His conviction of practicing law without a license, in violation of statute, was affirmed. That case should be compared with People v. Title Guarantee & Trust Co., 227 N.Y. 366, 125 N.E. 666, which the same court decided on the same day. There the defendant was charged with violating a statute which *274forbade corporations to practice law or hold themselves out as doing so. The corporation circulated a booklet which it called “Fees for the Examination of Titles.” This booklet listed also “fees for drawing and recording papers,” “fees for surveys,” and “Average Charges for Drawing Papers.” (227 N.Y. at page 369, 125 N.E. at page 667.) The court interpreted the booklet as referring only to papers which the defendant might be called upon to draw incidentally to its authorized business, and not as indicating that it solicited or engaged in the drawing of legal papers unconnected with that business. The court distinguished the Alfani case and reversed the defendant’s conviction. In the opinion of Chief Judge Hiscock and the concurring opinions of Judge Pound and Judge Crane a distinction was drawn between drafting legal papers as a business and drafting legal papers pertinent to other business which the corporation was authorized to carry on. Of drafting as a business Judge Pound said: “If such services * * * are customarily rendered, I think that they should be characterized as legal services. This does not imply that a real estate broker may not prepare leases, mortgages and deeds, or that an installment house may not prepare conditional bills of sale, in connection with the business and as a part thereof. The preparation of the legal papers may be ancillary to the daily business of the actor or it may be the business itself. The emphasis may be upon the services of the broker or the business of the trader or it may be upon the practice of law. In the case before us, I think that the defendant may not make it a business to prepare even simple legal papers for all who apply, independently of its chartered powers. * * * On the evidence, it does not hold itself out as preparing legal instruments generally but only in connection with its legitimate business.”3
The cases, for the most part, support this distinction between the primary and the incidental; and it is not confined to the drafting of papers. It has been held that an unlicensed individual may not engage, for hire, in the business of giving advice and conducting negotiations for the settlement of personal injury claims4 or workmen’s compensation claims.5 It has been held that a corporation may not engage in the business of contracting to furnish, by an attorney, legal advice and consultation on “all business, personal and private matters,”6 or the business of “managing and conducting any legal actions,” or advertise that it will “issue distraints * * *275and bring dispossess proceedings up to the point of starting suit.”7 It has been held that a bank may not, through licensed lawyers whom it employs, transact for its customers and others “almost every form of legal business except the handling of divorce cases;”8 that a trust company may not engage, for hire, in the business of drav ing wills and trust agreements ;9 that a ' jrporation or an association practices law if it carries on the business of furnishing legal services and legal advice to members or customers, for a fee;10 and that a corporation may not make a business of collecting claims owned by others, determining whether and when to sue, selecting and paying the attorney, and handling the suit in accordance with is own discretion.11 On the other hand, it has been held that “There can be no objection to the preparation of deeds and mortgages or other contracts” by real estate brokers “so long as the papers involved pertain to and grow out of their business transactions and are intimately connected therewith. The drafting and execution of legal instruments is a necessary concomitant of many businesses, and cannot be considered unlawful. Such practice only falls within the prohibition of the act when the documents are drawn in relation to matters in no manner connected with the immediate business of the person preparing them.”12 The Missouri Supreme Court in a recent opinion distinguished casualty insurance companies, which settle claims made by third persons against the insured, from companies which “hold themselves out to the public as being engaged in the business of settling claims.” The court held not only that the insurance companies might properly settle claims against their insured but also that, if they employed lawyers ‘ for litigation and for legal advice, they might properly allow lay adjusters to take part in conferences with or before the Workmen’s Compensation Commission looking to amicable settlement, and to select, fill out, and obtain the execution of appropriate forms of release.13 One not a member of the bar “may draw instruments such as simple deeds, mortgages, promissory notes, and bills of sale when these instruments are incident to transactions in which such person is interested, provided no charge is made therefor;” and the distribution of booklets containing “general explanations of the desirability and usage of wills and trust agreements, and soliciting the selection of the defendant as executor or trustee,” and advising the employment of lawyers, is not a representation that the company gives legal advice.14 A trust company does not practice law when its salaried attorneys draft pleadings, and appear in court, in its behalf as fiduciary. “Trust companies are empowered by law to act as fiduciaries. * * * In performing the legal phases of that .business, attorney-employees are acting for their employers.”15 *Detroit Bar Ass’n v. Union Guardian Trust Company involved a statute which forbade a corporation to practice law “or to hold itself out * * * as being entitled to practice law, or render or furnish legal services or advice * * *The court refused to enjoin either the drafting of revocable non-testamentary trust instruments or, provided no charge was made other than the statutory fee, the performance of routine probate-court, work incidental to fiduciary duties. The court observed: “It would be strange indeed if a court in which the proceeding was pending so appointed a trust *276company and continued it in such appointment, but simultaneously took the position that such appointee was without power to execute the trust.”16
While we might not agree, if occasion arose, with all of the cases we have cited, we accept the general distinction between the primary and the incidental. The practice of law is restricted to persons whose character and competence have been examined, who have been licensed, and who can be disbarred, in order that the public may be protected against lack of knowledge or skill on the one hand and lack of integrity or fidelity on the other. Practice by corporations or other unlicensed persons, even though they act exclusively through licensed lawyers, is undesirable because the interjection of an employer between lawyer and client tends to dilute the lawyer’s loyalty to his client and divert it to his employer. In general, if there is to be an intermediary employer he must himself be a licensed attorney.17 But “a man may- plead his own case in court, or draft his own will or legal papers.”18 He may draft any papers to which he is in a substantial sense a party, and any which closely concern his own affairs. He may discuss the legal aspects of his affairs with other parties to them or with third persons. He may hold himself out as able and willing to do these things. Either a man or a corporation may employ lawyers to do them. If other parties concerned wish to employ lawyers on their part, they may do so.
The distinction in question disposes of the present case. All the services which defendant advertises, or performs in or out of court, are reasonably incidental and most of them are practically necessary to the conduct of its authorized business. They concern defendant no less because they concern its customers. It follows that defendant is not practicing law. It cannot be an executor without probating wills. It cannot be an adequate estate manager without giving advice on the management of estates; and the chief opportunity for such advice is just before the drafting of the estate instrument. Business necessity, which probably requires defendant to present checks (which are legal instruments) to the customers of its banking department, requires it to present some elementary legal information to the customers of its trust department. A bank may state the difference between a drawer’s obligation and an endorser’s, and a trust company may state the difference between testacy and intestacy.
Real estate brokers furnish prospective customers with transportation. A broker’s commissions are intended to leave him a profit after covering all his costs including that one; but he makes no charge as for transportation, and a prospective buyer who buys nothing pays nothing for his ride. Licensed passenger carriers cannot complain of the broker’s activities. He is not in the business of carrying passengers, since he carries none but prospective purchasers, his compensation is not fixed in relation to carriage, and frequently he carries without compensation. Carriage is incidental to his business, and not the business itself. His furnishing, and occasionally advertising, transportation bears much the same relation to the taxicab business that the defendant’s advertising and furnishing of legal information bears to the practice of law. The defendant gives information to none but actual or prospective customers, and gives it only in connection with actual or prospective employment in its authorized business; its compensation is not fixed in relation to the information; and .frequently it gives information for which no compensation is received.19 In *277giving legal information it is not carrying on an unauthorized business, but performing an incident in its authorized fiduciary business.
Some years 'ago defendant occasionally employed attorney-officers, or outside counsel, to draft wills for customers; and in a few cases in which defendant was co-executor with an individual, defendant’s trust officer acted as attorney for the individual as well as for defendant. Defendant has long since abandoned 'these practices and intends not to renew them. It has adopted a rule which forbids its attorney-officers to appear as attorneys for any one other than defendant.
There is only one party to a will; .but a trust agreement has two or more parties, and one of them is the trustee! Trustees frequently assume larger powers and duties of management than executors. Normally an executor settles an estate within a limited time after he qualifies, but a trustee is frequently occupied with a trust for many years. Frequently the settlor: can oversee the performance of his trust, but the testator can never oversee the performance of his will. A trust seldom disposes of the settlor’s entire assets, while a will commonly disposes of the testator’s entire assets. Normally, for such reasons as these, the form and substance of a will are more peculiarly the business of the customer, and they concern the fiduciary less intimately, than the form and substance of a trust agreement. While it is proper for the executor to make suggestions to the testator regarding the contents of the will, it has sometimes been held that the actual drafting of wills,20 or of wills and trust agreements,21 is not properly incidental to the named fiduciary’s business and constitutes the practice of law. We know of no case in which the drafting of trust agreements alone, by a concern which, like the present defendant, drafted no wills, has been held to constitute the practice of law by the named trustee. A custodian, manager, or other agent may draft the agreement which defines his agency, and it is not clear why a trustee may not draft the agreement which defines his trusteeship. Its form and substance may vitally affect his interests. Such drafting by trustees was expressly upheld in Detroit Bar Ass’n v. Union Guardian Trust Co., 282 Mich. 216, 276 N.W. 365. In People v. Peoples Trust Co., supra, in which the court condemned the drafting of wills, it said: “This is not like the case where trust companies, through their own attorneys, although at the expense of the client, examine and advise as to trust deeds before accepting the trust. In such case the attorney represents the trust company only, and owes no duty or obligation to the grantor in the deed.”22 We think the defendant’s occasional drafting of trust agreements is properly incidental to its business as trustee, and does not amount to the practice of law. This is the clearer because, as Justice Bailey found, (1) “If a customer requests defendant to draft a trust agreement, ordinarily defendant recommends that the customer employ his own independent attorney for that purpose, at his own expense;” (2) “defendant does not advise or attempt to influence or guide a customer as to which of several courses he should pursue;” (3) “whenever a customer appears to be confronted with a legal problem, defendant insists that he consult and obtain the legal advice of his own attorney;” and (4) defendant makes no additional charge for its drafting services. The case contains no suggestion that the defendant ever takes advantage of its customers or treats them with less than perfect fairness. If a trustee’s attorneys, however innocently, draft an agreement which is unfair to the customer, the transaction may be upset. Jothann v. Irving Trust Company, 151 Misc. 107, 270 N.Y.S. 721, affirmed 243 App.Div. 691, 277 N.Y.S. 955. The defendant’s practices give ample recognition to the fact that a settlor is wise to obtain independent legal advice.
Appellants ask us to draw a distinction, at least in respect to probate work, between the employment of attorney-officers and the employment of outside counsel; indeed, during argument appellants’ counsel said in effect that the case narrows down to the fact that in uncon*278tested probate matters defendant acts through its salaried attorneys instead of independent counsel. No authority is cited for this distinction. The question whether defendant is practicing law cannot turn upon it. Defendant is as free as any corporation to consult its own convenience in selecting and employing attorneys. What it may do through one member of the bar it may do through another, if he is not specially disqualified. The attorney’s employment may be sporadic, frequent, or continuous ; it may be performed in and from defendant’s offices or other offices; and it may be paid for by fee or by salary. Salaried attorneys and outside counsel are subj ect to like motives' and obligations, public and private, and to like public control. Either may be employed to perform legal services which are properly connected with their employer’s business. The probating of wills and every other activity, in or out of the courts and the executive departments, which is involved in the discharge of defendant’s duty as a fiduciary is necessarily incidental to its business.
Appellants do not emphasize the fact that defendant employs laymen to prepare tax returns and address arguments to tax officials. Such work may properly be done by lawyers or laymen. Appellants’ petition for rehearing included requests that the rights of laymen to practice before workmen’s compensation commissions and similar agencies be determined, and that the power of the courts to regulate the practice of law be so enunciated as to settle controversies concerning the activities of collection agencies, accountants, tax consultants and experts, and associations which furnish legal counsel to their members, such as automobile associations, trade associations, boards of trade,' chambers of commerce, and the like. During the re-argument, however, appellants conceded that we cannot undertake to dispose of issues which are not before us, or of the rights of organizations which are not represented.
Affirmed.

 Cases are collected in 73 A.L.R. 1327, 105 A.L.R. 1364. Cf. 44 Harv.L.Rev. 1114.

 Cheatham, Cases and other Materials on the Legal Profession, p. 55.

 227 N.Y. at pages 379, 380, 125 N.E. at page 670.
Section 280 of the N. Y. Penal Law, Consol.Laws, c. 40, which prohibited corporations from practicing law, contained a proviso that it should “not apply to any corporation or voluntary association lawfully engaged in a business authorized by the provisions of any existing statute, nor to a corporation or voluntary association lawfully engaged in the examination and insuring of titles to real property.” This section had been amended as follows: “But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state nor to solicit directly or indirectly professional employment for a lawyer.” The proviso in favor of title companies antedated the amendment. Appellants suggest" that the decision in the Title Guarantee case was due to the proviso. But no opinion in the ease contains any such suggestion. No judge took the position that legal drafting incidental to the corporation’s authorized business (1) amounted to the practice of law but (2) was taken out of the general statutory prohibition by the proviso. On the contrary, each of the three concurring opinions took, implicitly or explicitly, tbe position that this incidental drafting was not within the general prohibition at all, for the reason that it did not amount to the practice of law; and on this point the three dissenting judges apparently agreed with the majority. The dissent was apparently due to the fact that on one or two occasions the corporation had drawn, for a fee, legal instruments not connected with the transaction of its authorized business. The majority thought these sporadic acts did not amount to practice. . Judge Cardozo and two of his colleagues, while expressly “accepting * * * the conception of legal services embodied in Judge Pound’s opinion” (227 N.Y. at page 381, 125 N.E. at page 671), dissented from the judgment of reversal on the ground that there was evidence which supported the conviction.

 Fitchette v. Taylor, 191 Minn. 582, 254 N.W. 910, 94 A.L.R. 356.

 People ex rel. Chicago Bar Association v. Goodman, 366 Ill. 346, 8 N.E.2d 941, 111 A.L.R. 1, certiorari denied 302 U.S. 728, 58 S.Ct. 49, 82 L.Ed. 562.

 People ex rel. Los Angeles Bar Association v. California Protective Corporation, 76 Cal.App. 354, 244 P. 1089, 1090.

 Unger v. Landlords’ Management Corporation, 114 N.J.Eq. 68, 71; 168 A. 229, 230, 231.

 People ex rel. Illinois State Bar Ass’n v. Peoples Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901, 903. In re Otterness, 181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319.

 In re Eastern Idaho Loan & Trust Co., 49 Idaho 280, 288 P. 157, 73 A.L.R. 1323.

 Rhode Island Bar Association v. Automobile Service Ass’n, 55 R.I. 122, 179 A. 139, 100 A.L.R. 226; People ex rel. Courtney v. Association of Real Estate Tax-Payers of Illinois, 354 Ill. 102, 187 N.E. 823. Cf. In re Thibodeau, Mass., 3 N.E.2d 749, 106 A.L.R. 542.

 State ex inf. McKittrick v. C. S. Dudley & Co., 340 Mo. 852, 102 S.W.2d 895, certiorari denied 302 U.S. 693, 58 S.Ct. 12, 82 L.Ed. 535; State ex rel. Freebourn v. Merchants’ Credit Service, 104 Mont. 76, 66 P.2d 337; Richmond Ass’n of Credit Men, Inc., v. Bar Association of City of Richmond, 167 Va. 327, 189 S.E. 153.

 Childs et al. v. Smeltzer, 315 Pa. 9, 171 A. 883, 885.

 Liberty Mutual Insurance Co. et al. v. Jones et al., 130 S.W.2d 945, 960.

 Cain v. Merchants Nat. Bank & Trust Co. of Fargo, 66 N.D. 746, 268 N.W. 719, 720, 723.

 Judd v. City Trust & Savings Bank, 133 Ohio St. 81, 12 N.E.2d 288, 293.

 282 Mich. 216, 276 N.W. 365, 366, 371, rehearing denied, 282 Mich. 707, 281 N.W. 432.

 “The professional services of a lawyer should not be controlled or exploited by any lay agency, personal or corporate, which intervenes between elient and lawyer.” Canons of Professional Ethics of the American Bar Association, No. 35.

 People v. Alfani, 227 N.Y. 334, 125 N.E. 671, 674.

 As the idea of a business or profession includes the idea of claiming compensation, many cases, including several of those stated above, recognize that one’s custom in regard to compensation tends to show whether one is engaged in the practice of law. Thus it has been held that a charge for the drafting of wills and trust agreements “brings it definitely within the term ‘practice of the law.’ ” In re Eastern Idaho Loan & Trust Co., 49 Idaho 280, 288 P. 157, 159, 73 A.L.R. 1323. It has even been held that claiming compensation for legal services is “an essential element” in the practice of law. State v. Bryan, 98 N.C. 644, 4 S.E. 522. This is an extreme view, and the contrary has been held. State ex rel. Wright, Attorney General, v. Barlow, 131 Neb. 294, 268 N.W. 95.

 People v. Peoples Trust Co., 180 App.Div. 494, 167 N.Y.S. 767, 770.

 Judd v. City Trust & Savings Bank, 133 Ohio St. 81, 12 N.E.2d 288; People ex rel. Committee on Grievances of Colorado Bar Ass’n v. Denver Clearing House Banks, 99 Colo. 50, 59 P.2d 468, 470; State ex inf. Miller v. St. Louis Union Trust Co., 335 Mo. 845, 74 S.W.2d 348. Cf. In re Eastern Idaho Loan & Trust Co., 49 Idaho 280, 288 P. 157, 73 A.L.R, 1323.

 180 App.Div. 494, 498, 167 N.Y.S. 767.