Court Opinion

ID: 3541375
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:52:43.93306+00
Date Added: 2024-06-11T14:21:32.941696
License: Public Domain

At the opening of the hearing counsel for the defendants interposed a general objection to the introduction of evidence upon the ground, among others, that this court had no jurisdiction over the defendants or either of them. They contend that if they are guilty of the offense charged, then they are responsible only to the justice or district court. If there be any doubt as to its jurisdiction over the corporate defendant or the individual defendant, it is only necessary to refer to the unbroken line of authority found in former decisions of this court to dispel such doubt (In re Bailey, 50 Mont. 365,146 P. 1101, Ann. Cas. 1917B, 1198; In re White, 54 Mont. 476,171 P. 759; In re Phillips, 64 Mont. 492, 210 P. 89; see, also, People v. People's Stock Yards State Bank, 344 Ill. 462,176 N.E. 901). A very recent case disposes of the objection to the jurisdiction of this court. (See State v. Barlow, (Neb.) 268 N.W. 95.)
What is the legal position of the corporate defendant, and what is its relation to creditor-clients upon demands placed in its hands for collection? The defendants' answer indicates that the corporate defendant will take the position that it is the valid assignee of all demands upon which it undertakes collection and that its assignments are absolute, so that all acts are done for and on its own behalf. The plaintiff's position is that the evidence shows that there is in fact no legal assignment of demands and that demands are in effect only listed or placed with the defendant for collection, that the only bona fide interest of the defendant in any of such demands is its agreed commission, contingent upon collection and that through the course of the proceedings for the collection of a demand the defendant corporation acts as the agent of the real owner of the demand, i.e., the pretended assignor or creditor.
Plaintiff is well aware of the general rule that an assignment in absolute terms and vesting in the assignee the apparent legal title to a chose in action, is considered as being unaffected by a collateral contemporaneous agreement respecting the proceeds, *Page 79 
and that the assignee may sue in his own name as the real party in interest, even though the entire consideration for the assignment is made to depend on the contingency of collection or the assignee is to account to the assignor for the proceeds when collected (2 R.C.L., p. 640, sec. 51). This general rule has been uniformly followed by the California courts as is illustrated in the recent case of Cohn v. Thompson, 128 Cal.App. (Supp.) 783, 16 P.2d 364, where it is said: "Provided the assignment is absolute, as to vest the apparent legal title in the assignee, the latter is entitled to sue in his own name whatever collateral arrangements have been made between him and the assignor respecting the proceeds." (See, also, Ralph v. Anderson,187 Cal. 45, 200 P. 940; Hopkins v. Contra Costa County,106 Cal. 566, 39 P. 933.)
The so-called "claim sheet" in general use by the defendant states: "The accounts listed on this sheet are hereby assigned to you for collection in accordance with your regular schedule of rates and terms." Thus it is apparent that the assignment is not absolute and that the only intention which can be attributed to creditors using the form is that the defendant is appointed and authorized to collect the account. Further the claim sheet recites, that in case of suit, "this assignment makes you the party in interest in whose name suit is to be filed." This latter declaration is meaningless unless there is in fact an absolute assignment for it is elementary that a party in order to file suit in his own name must have some remedial interest recognized by the law and personal to him (47 C.J. 21, sec. 30). All the authorities agree that the transfer between assignor and assignee is not complete so long as the assignor retains any control and right to the cause of action. (Cummings v. Morris, 25 N.Y. 625;Chase v. Dodge, 111 Wis. 70, 86 N.W. 548; 5 C.J. 995.) Although the distinction between "legal" and "equitable" assignments is not of importance in this state, where the reformed procedure has been adopted (Pomeroy's Eq. Jur., 4th ed., sec. 356), it is significant that there can be not even an equitable assignment where the *Page 80 
assignor retains control. (Christmas v. Russell, 14 Wall. (U.S.) 69, 20 L. Ed. 762; In re Wood, 243 Pa. 211, 89 A. 975.)
The record establishes that no consideration of any kind is paid to creditors at the time accounts and other demands are placed with the corporation for collection. The authorities generally agree that the presence or failure of consideration is a relevant fact to be considered where it is sought to show that the assignee is not in fact the real party in interest. (Muller
v. Witte, 78 Conn. 495, 62 A. 756; Coombs v. Harford,99 Me. 426, 59 A. 529; Gregoire v. Rourke, 28 Or. 275,42 P. 996.)
Where the method of operation was very similar to that followed by the defendant corporation the assignment has been held fraudulent, sham, and merely a subterfuge for the purpose of enabling the collection agency to practice law. (People v.Securities Discount Corp., 279 Ill. App. 70; affirmed in361 Ill. 551, 198 N.E. 681; State v. James Sanford Agency,167 Tenn. 339, 69 S.W.2d 895.)
If it be conceded, for the purpose of argument, that the defendant does become the owner of demands placed with it and that there is a consideration for such transfer of ownership, the defendant is caught on the other horn of a dilemma. Section 8980, Revised Codes, expressly provides: "An attorney and counselor must not, directly or indirectly, buy, or be in any manner interested in buying, a bond, promissory note, bill of exchange, book debt, or other thing in action, with the intent and for the purpose of bringing an action thereon." Section 8983, declares: "The last four sections [including the above] apply to a person prosecuting an action in person, who does an act which an attorney and counselor is therein forbidden to do." It thus clearly appears that a person prosecuting an action in his own name is by the statute placed in the same position as an attorney and counselor. If defendant's contention be accepted, they undoubtedly "buy" within the meaning of the statute, and further there can be little *Page 81 
question but that defendants take demands from creditors for the purpose and with the intention of bringing action, and this fact is well known to the so-called assignors. Defendant acquires no rights, even assuming it has assignments, for so far as the defendant is concerned the whole transaction is void. This court has said: "Where a statute designed for the protection of the public prescribes a penalty, that penalty is the equivalent of an express prohibition and a contract in violation of its terms is void." (McManus v. Fulton, 85 Mont. 170, 181, 278 P. 126, 67 A.L.R. 690, and cases cited.) A contract founded on an illegal consideration or made for the purpose of furthering any matter or thing prohibited by statute or to aid or assist any party therein is void. (King v. Johnson, 30 Cal. App. 63, 157 P. 531;Third Nat. Exch. Bank v. Smith, 17 N.M. 166, 125 P. 632.)
Defendant corporation is without authority practicing law in justice court. As to what constitutes "practice of law" within the meaning of section 8944, Revised Codes, see In re Duncan,83 S.C. 186, 65 S.E. 210, 24 L.R.A. (n.s.) 750; Berk v.State, 225 Ala. 324, 142 So. 832, 84 A.L.R. 740; Re Pace,170 A.D. 818, 156 N.Y. Supp. 641; People v. People's StockYards State Bank, supra; People v. Alfani, 227 N.Y. 334,125 N.E. 671; National Sav. Bank v. Ward, 100 U.S. 195,25 L. Ed. 621.
Defendants will undoubtedly contend that any person may practice in justice courts without a license under sections 9843, 9629, Revised Codes. Assuming for the moment that the legislature could validly make such statutes, did it intend to permit a corporation to engage in the business of practicing law in such courts? If it did, this court is not bound by such statutes. The legislature, it is true, in the exercise of the police power of the state, may establish minimum requirements to be met by applicants for admission to the bar and may prescribe criminal penalties for practice declared to be illegal, but it has been established by a multitude of cases that the sole judge of who, having complied with whatever statutory *Page 82 
requirements may exist, shall engage in the practice of law before the judicial department is that department. This power of the judicial department to regulate the practice of law not only must necessarily be implied from the constitutional grant of complete judicial power to that department (sec. 1, Art. VIII, Const.), but inheres therein by reason of its very nature, independent of express or implied grant. The following cases will suffice as illustrations: Opinion of Justices, 289 Mass. 607,194 N.E. 313; Opinion of Justices, 279 Mass. 607, 180 N.E. 725, 81 A.L.R. 1059; In re Day, 181 Ill. 73, 54 N.E. 646, 50 L.R.A. 519; People ex rel. Illinois State Bar Assn. v. People's StockYards State Bank, (1931) supra; In re Cannon, (1932)206 Wis. 374, 240 N.W. 441; In re Richards, (1933) 333 Mo. 907,63 S.W.2d 672; In re Olmsted, (1928) 292 Pa. 96, 140 A. 634;Rosenthal v. State Bar Examining Committee, 116 Conn. 409,165 A. 211, 87 A.L.R. 991. If it be true that a corporation does not fall within the class authorized to practice law before the courts of this state there can be no question but that defendants' acts amount to a contempt punishable by this court, under subsection 6, section 9908, Revised Codes. The supreme court of Vermont in Re Morse, 98 Vt. 85, 126 A. 550,36 A.L.R. 527, held the respondent guilty of contempt of that court although his practice was confined to justice courts.
The defendant company is engaging in the practice of law in district court without authority. There are a multitude of cases in the reports condemning practices substantially similar to the practice of the corporate defendant. It is said that there is no difference of judicial opinion on the proposition that a corporation may not practice law either directly or indirectly (72 A.L.R. 1328 et seq.; 2 R.C.L., p. 946; In re Cooperative LawCo., 198 N.Y. 479, 92 N.E. 15, 16, 139 Am. St. Rep. 839, 19 Ann. Cas. 879, 39 L.R.A. (n.s.) 55; Land Title Abstract  Trust Co.
v. Dworken, 129 Ohio, 23, 193 N.E. 650, 653; Unger v.Landlords' Management Corp., 114 N.J. Eq. 68, 168 A. 229,231; People v. California Protective *Page 83 Corp., 76 Cal. App. 354, 244 P. 1089; People v. MerchantsProtective Corp., 189 Cal. 531, 209 P. 363; Re Otterness,181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319; Depew v. WichitaAssn. of Credit Men, 142 Kan. 403, 49 P.2d 1041; People
v. Motorists Assn. of Illinois, 354 Ill. 595, 188 N.E. 827;People v. People's Stock Yards Bank, supra; State ex rel.Lundin v. Merchants Protective Corp., 105 Wash. 12,177 P. 694; State v. Retail Credit Men's Assn., 163 Tenn. 450,43 S.W.2d 918; State v. James Sanford Agency, 167 Tenn. 339,69 S.W.2d 895.)
Corporations may be punished for contempt when they engage in the practice of law indirectly and through duly licensed and admitted attorneys. (People v. People's Stock Yards StateBank, supra; People v. Motorists Assn. of Illinois, supra;Rhode Island Bar Assn. v. Automobile Ser. Assn., 55 R.I. 122,179 A. 139, 100 A.L.R. 226; see, also, Richmond Assn. ofCredit Men, Inc., v. Bar Association of the City of Richmond, (Va.) 189 S.E. 153, decided January 14, 1937; In re ShoeManufacturers Protective Assn., (Mass.) 3 N.E.2d 746.)
A particularly vicious element, so far as defendants in justice court are concerned, is this: the defendants as a matter of general practice attach for the full amount prayed in the complaint including these very contingent attorney's fees. It is submitted that this practice is not only a fraud upon those affected but a deliberate abuse of process. It is universally held for obvious reasons, that to authorize recovery of attorney's fees a note must have been actually and necessarily placed in an attorney's hands for collection. (8 C.J. 1098, n. 23; Morrison v. Ornbaun, 30 Mont. 111, 75 P. 953;O'Sullivan v. Burling, 91 Mont. 244, 6 P.2d 1103.) It follows, therefore, that whenever defendant corporation demands attorney's fees without having employed an attorney, it in effect admits that it is not suing on its own behalf and further is representing to the public, to debtors affected, and to the *Page 84 
court that it is an attorney at law entitled to receive emoluments allowed only to attorneys at law.
Jurisdiction of the court: It is apparent that the enforcement of no private rights by any party litigant is here involved, for the action is by the state, on relation of its former attorney general, and therefore this proceeding must be one for punishment of a constructive, or indirect, criminal contempt.
It is clear that contempt proceedings are designed to protect the courts, to the end that they may not be hampered in the dispensing of justice and that their decisions may be obeyed and made effective. For this reason the rule has never been disputed that a court may punish only contempts committed against itself. (6 R.C.L. 520; Ex parte Bradley, 7 Wall. 364, 19 L. Ed. 214;Davenport v. Davenport, 69 Mont. 405, 222 P. 422; see, also, 12 Am. Dec. 183; 117 Am. St. Rep. 958; Ann. Cas. 1915D, 1051.) If any contempt has been committed, it has been a contempt of either the justice courts or district court, and as the Supreme Court of the United States observed in the Bradley Case
(19 L. Ed. 214) there is no need to punish a contempt of a court which can inflict its own punishment. The courts involved here have that power. (Secs. 9910, 9699, 9700, 9701, Rev. Codes.)
Suit upon assigned claims does not constitute unauthorized practice of law. Plaintiff contends that on the facts herein the defendant corporation merely acts as agent for the creditor to collect his claim on a contingent fee basis, and assumes to, and does, render legal services (practices law) on behalf of such creditor. We contend that after the assignment the agency and Palmer Johnson, its agent, act solely on behalf of the corporation, and not for the creditor or anyone else. *Page 85 
We believe that the evidence and the principles of law applicable thereto sustain our contention.
Opposing counsel concede that where an assignment is absolute in its terms and vests the apparent legal title in the assignee, he may sue on it in his own name, and cite Cohn v. Thompson, 128 Cal.App. (Supp.) 783, 16 P.2d 364, Ralph v.Anderson, 187 Cal. 45, 200 P. 940, and Hopkins v. ContraCosta Co., 106 Cal. 566, 39 P. 933. (Plaintiff's brief, p. 24.) To escape the force of this rule they assert that the words "for collection" used in the assignment show that it is not "absolute." It is our view that the words "for collection" merely indicate the purpose of the assignment and state the consideration for which it is given. In other words, the creditor says: "I hereby assign this claim to you, in consideration of your promise to try to collect it and your promise to pay me a certain proportion of the amount collected." The use of the words "for collection" does not limit the amount of ownership transferred any more than the use of the words "for farming purposes" in a deed or a lease would cut down the estate granted. The words "for collection" could be omitted altogether, and the meaning or effect of the assignment would not be changed. Likewise, the stipulation that the assignee may forward accounts to others does not weaken the effect of the assignment as an unqualified transfer. It is true that this may be surplusage if the assignee has full title, but such an extra precautionary measure surely does not indicate that full title is not granted. Moreover, it does show that the assignor regards the transfer as absolute, and it is absolute, else he would not agree to such a power in the assignee. It is undisputed that in some instances of suit, the creditor has made an advance on costs. From the testimony this is undoubtedly the exception rather than the rule. In any event we fail to see how this indicates that the assignor has control over the claim or the suit. The situation is merely one where the assignor feels that by putting up part of the costs he may be enabled to receive his purchase price for the *Page 86 
assignment, and his doing so does not indicate that he still owns the claim sued upon.
Finally, counsel urge that the assignments are not valid because no consideration passes from the assignee to the assignor. If the quotation from Cummings v. Morris, 25 N.Y. 625
(cited at page 25 of plaintiff's brief) is correct, the lack of consideration is not material. The rule is well established that an assignment for collection passes title and constitutes the assignee the real party in interest for the purpose of suit on such an assigned claim, and this is true notwithstanding the fact that no consideration is given for the assignment and the assignee must account to the assignor for all or a part of the proceeds. (4 Am. Jur. 328; 2 R.C.L. 640; Manley v. Park,68 Kan. 400, 75 P. 557, 66 L.R.A. 967; Falconio v. Larsen,31 Or. 137, 48 P. 703, 37 L.R.A. 254; Citizens Bank v.Corkings, 9 S.D. 614, 70 N.W. 1059, 62 Am. St. Rep. 891;Mosher v. Bellas, 33 Ariz. 147, 264 P. 468; Collins v.Heckart, 127 Or. 34, 270 P. 907; Keon v. Saxton  Co., 236 N.Y. Supp. 503; Elam v. Arzaga, 122 Cal. App. 742,10 P.2d 805; Hammell v. Superior Court, 217 Cal. 5,17 P.2d 101; Perkes v. Utah-Idaho Milk Co., 85 Utah, 217,39 P.2d 308; Bechtel v. Baglieto, 13 Cal. App. 2d 495,57 P.2d 192; Hibernia Securities Co. v. United Mfg. Co., (Or.) 59 P.2d 384; Carson Pirie Scott  Co. v. Long, (Iowa) 268 N.W. 518; note, 64 L.R.A. 582.)
Plaintiff argues that even though the assignments might pass full title to the defendant corporation, still they are invalidated by the provisions of sections 8980 and 8983, Revised Codes. There are two answers to this. In the first place those sections, were undoubtedly adopted to cover, in statutory form, the old common-law doctrine of champerty. As such, they void the assignment and give the obligor a defense to an action on the assignment. But they are no authority for the proposition that a plaintiff suing in its own name on such an assigned claim is thereby practicing law or rendering legal service to another. The mere fact that an assignment is void *Page 87 
for champerty does not make the assignee guilty of practicing law when he sues on the claim. To so hold would be to rule that every assignee who sues on a claim, void for any reason, would be practicing law.
In the second place, the present fact situation does not come within the terms of section 8983, which applies "to a person prosecuting an action in person." In this case the claim is purchased by the defendant Merchants Credit Service, Inc. This entity does not prosecute the action in person, for that is done by the defendant Palmer Johnson or one of the other agents of the corporation. The fact that the corporation could not appear in person, but only through an agent does not alter the case, for two distinct persons are involved, i.e., the corporation, which buys and owns the claim, and the individual, Palmer Johnson, who prosecutes the action for the corporation. Suppose Smith buys a claim and pays Jones to represent him in justice court in a suit thereon. In such a case there would be no violation of section 8980. It is only when the purchaser represents himself as attorney pro se that the assignment becomes void, and such is not the case here.
It is to be noted that an essential factor in the prohibition of section 8980 is the intent and purpose of bringing an action on the debt. There is absolutely no evidence in the record that the defendant corporation intends or has the purpose to sue on any claim purchased by it. It is true that in rare cases some of these claims result in suit, but it is apparent that such happens only when all methods of collection other than a resort to litigation have proved ineffectual.
For these reasons the assignments are not voided by sections 8980 and 8983, for the owner of the claim does not appear in court for itself, and the claims are not purchased with the intent and purpose to sue. The individual defendant, Johnson, acts within his rights in representing the corporation in justice court (sec. 9629). The corporation is the bona fide owner of the claims and it furnishes legal service to no one but itself in the conduct of its business. *Page 88 
The corporation does not act as an attorney. The fallacy of counsel's contention lies in their apparent assumption that anything which an attorney does constitutes the practice of law and that no one outside of the charmed circle of the chosen few can perform these functions. Attorneys often act as escrow depositaries; they receive fees for acting as statutory agent for foreign corporations; they often serve as business agents to collect rents; they act as insurance investigators and adjusters; they prepare income tax returns and they collect debts, either with or without resort to legal process. The definition of practicing law as doing the things that lawyers usually do is fallacious as the above examples of lawyers' activities clearly show. Although practicing attorneys probably do all of the things which defendants do to make collections, that is not authority for saying that defendants practice law within the meaning of the statutory prohibitions and all of the argument in the plaintiff's brief as to whether or not the legislature could authorize a corporation to practice law is beside the point.
We have examined the cases relating to corporate practice of law cited by plaintiff. Without exception they differ widely on their facts from the present case, and deal with situations where a corporation contracts with its clients to employ attorneys as agents to furnish them with legal services, the corporation receiving the fees for such services rendered. In such cases the suit is brought or the legal advice is given or legal documents are prepared for the client of the corporation and there is no privity between him and the attorney. In this case the attorney acts solely for the defendant corporation. No advice is given to the original creditors; no suit is brought in their names. No services, legal or otherwise, are rendered to them by the attorney or anyone else.
Plaintiff's counsel assert that the defendants have represented that they are authorized to bring actions against debtors, both directly and indirectly by seeking to collect attorney's fees when suing on notes providing for such recovery. *Page 89 
It seems clear that when the corporate defendant sued in its own name on a note providing for attorney's fees it asked for them in the prayer so that if it should prove necessary to employ an attorney in the case, fees could be collected. Undoubtedly there have been cases where no attorney appeared in which judgment was entered including an amount allowed as attorney's fees. This evidence, however, shows positively that the defendants have never assumed to collect any attorney's fee. Further, it shows that whenever an attorney's fee is collected, the fee is paid to the attorney for his services in the action. Thus it is clear that attorney's fees are demanded only to reimburse the attorney appearing in the case and that the defendants never receive any portion of such fees, nor do they assume to demand or collect them for their own benefit. Under section 8958, Revised Codes, it would seem that the burden of preventing the allowance of attorneys' fees to a person not a licensed attorney is upon the court. It is very probable that in the cases shown where attorneys' fees were allowed and no attorney appeared, this result was caused entirely by inadvertence. There is no showing anywhere that the defendants deceived the court or underhandedly procured the allowance of fees.
In their effort to sustain their contention that the defendants represent that they can act as attorneys at law, plaintiff's counsel refer to the "Claim Sheet," statement of policy, and letter-head announcements that the defendant will garnish wages and attach property, saying that all of these things constitute representations that suits can be brought by the defendants. This may be true, but these are not in any way representations that such action will be taken in behalf of anyone but the defendant corporation as owner of the claim. The representations go no further than to suggest that if a claim is purchased by it, the defendant corporation will collect it by suit, if such becomes necessary after all other methods fail, and the suit will be on its own behalf. But counsel make much of the fact that the so-called "final notice" is written on legal cap *Page 90 
and that the words "plaintiff" and "defendant" are used. We fail to see how this is a representation that suit has been begun, in view of the express language of the notice itself. The case ofState Bar v. Retail Credit Assn., 170 Okla. 246,37 P.2d 954, is cited and relied upon as authority that such notices are illegal. We do not agree that the facts of that case are the same as in the one at bar, for a reading of the opinion discloses that the forms employed by the defendant in that case were flagrant misrepresentations of the manner in which the courts might function, and this brought the processes of the law into disrepute.
We have endeavored to argue this case fully and fairly. It is of extreme importance to this court, to the bar in general, in other states as well as Montana, and to persons in defendants' business and the lay public in general that all of the points raised by this proceeding be considered by this court, to the end that it may be more definitely understood what constitutes the practice of law, and what these defendants and others situated like them may do.
The following members of the Montana Bar were permitted to appear as Amici Curiae: Mr. Howard M. Lewis and Mr. VernonHoven, of Plentywood; Mr. Bert W. Kronmiller, of Hardin; Mr.L.J. Onstad, of Broadus; Mr. M.L. Parcells, Mr. P.R. Heily, and Mr. E.A. Blenkner, of Columbus; Mr. Rock D. Fredrick andMr. T.W. Greer, of Whitefish; Mr. Carl Lindquist, of Scobey;Mr. John N. McFarlane, Mr. A. Ronald McDonnell, Mr. Chas. W.Campbell, and Mr. E.O. Overland, of Big Timber; Mr. E.K.Cheadle, Jr., and Mr. Cedor B. Aronow, of Shelby; Mr. J.J.McDonald, Mr. D.M. Durfee, and Mr. Edwin T. Irvine, of Philipsburg; Mr. John J. Cavan and Mr. Robert E. Purcell, of Jordan; Mr. Ernest E. Fenton, of Forsyth; Messrs. Grubb Rockwood, of Kalispell; *Page 91 Mr. L.D. French, Mr. W.J. Burke, Mr. C.J. Brower, Mr. John P.Farr and Mr. Lloyd I. Wallace, of Polson; Mr. W.W. Mercer,Mr. F.L. Watts, Mr. F.W. Mettler, and Mr. A.G. McNaught, of Roundup; Mr. John F. McGough, of Boulder; Mr. MartinVetleson, of Livingston; Mr. E.H. Goodman, Mr. Frank T. Hooks,Mr. J.E. Kanouse, and Mr. Fred W. Schmitz, of Townsend; Mr.Robert H. Allen and Messrs. Duncan  Duncan, of Virginia City;Mr. W.S. Hartman, Mr. Justin M. Smith, Mr. H.A. Bolinger, Jr.,Mr. Edmund Burke, Jr., Mr. H.A. Bolinger, Mr. Fred Lay, Mr.George Y. Patten, and Mr. Walter Aitken, of Bozeman; Mr. W.G.Gilbert, Mr. T.E. Gilbert, Mr. Henry G. Rodgers, Mr. Theo. F.McFadden, Mr. Leonard L. Shultz, Mr. J.E. Kelly, and Mr. JohnCollins, of Dillon; Mr. Fred C. Gabriel, and Mr. W.H. Rasey, of Malta; Mr. H.H. Hullinger, of Conrad; Mr. W.C. Husband, Mr.L.D. Glenn, and Mr. Emmett O'Sullivan, of Harlowton; Mr. J.H.McAlear, of Chester; Mr. Thomas Dignan, Mr. C.D. Borton, Mr.Harry H. Dale, Mr. J.O. Weaver, Mr. John M. Kline, Mr. C.H.Roberts, Mr. James T. Shea, Mr. Thomas Dignan, Jr., Mr. Edwin S.Booth, Jr., and Mr. Otis A. Hallett, of Glasgow; Mr. ThomasC. Colton, of Wibaux; Mr. Leon L. Bulen, Mr. E.F. Gummer, Mr.Fred W. Schilling, Mr. Thomas N. Marlowe, Mr. George F. Higgins,Mr. Dalton T. Pierson, and Mr. Edward Dussault, of Missoula;Mr. T.H. Burke, Mr. Horace C. Davis, and Mr. M.J. Lamb, of Billings; Mr. Wm. R. Taylor, and Mr. W.P. Halloran, of Anaconda; Messrs. King  Rognlien, Messrs. Kendall  Baldwin,Messrs. Foot, Aronson  Foot, Messrs. Logan  Child, and Mr.A.D. Stillman, of Kalispell; Mr. P.J. Gilfeather, of Winnett;Mr. H.O. Varlstead, and Mr. John B. Muzzy, of Stanford; Mr.Eugene L. Murphy, Mr. Bert I. Packer, and Mr. George Coffey, of Chouteau; Mr. George W. Howard, Mr. Harry Meyer, Mr.Alexander Levinski; Mr. Clarence E. Wohl, Mr. Francis J. McGaw,Mr. John A. Shelton, Mr. J.F. Emigh, Mr. J.E. Corrette, Jr., Mr.J.M. Doepker, Mr. A.C. Rodger, Mr. W.E. Coyle, Mr. Donald J.Stocking, Mr. H.D. Carmichael, *Page 92 Mr. Tom J. Davis, Mr. Roy F. Allen, Mr. L.C. Meyers, Mr. JosephP. Vilk, Mr. T.J. Sullivan, and Mr. John B. Tansil, of Butte.
This is an original proceeding brought to have the defendants adjudged in contempt of court for practicing law without a license. Many lawyers throughout the state, as well as collecting agencies, have been permitted to appear as amici curiae. After issues were framed by the pleadings the court appointed Honorable A.F. Lamey, a practicing attorney of Havre, as referee to take testimony. The testimony was taken at a hearing held in Great Falls and has been certified to this court. The important facts are these:
The Merchants' Credit Service, Inc., is a Montana corporation with its principal office in Great Falls. Its business is that of carrying on a collection business. The defendant Palmer Johnson is its general manager. It solicits, from merchants and others, the assignment of debts for collection. Creditors are advised that the corporation has in its employ attorneys at law who are retained to represent it wherever necessary. It uses letter-heads representing that it can garnishee wages and attach property. Some creditors assign claims by using what is called a "claim sheet" furnished by defendants. This claim sheet is in the following form:
"Merchants' Credit Service, Inc., Great Falls, Montana.
"Gentlemen: The accounts listed on this sheet are hereby assigned to you for collection in accordance with your regular schedule of rates and terms. The undersigned guarantees them to be just, correct and unpaid, and will furnish you with a fully itemized statement of any of these accounts upon request. None of these accounts are at present listed with other collectors or with attorneys. You will be notified promptly of any payments made directly to us by any of these debtors and your regular terms will apply to such payments. *Page 93 
If it is necessary, you are authorized to forward any of these accounts to other collectors or to attorneys, and it is expressly understood that we will not hold you responsible for the efficiency, honesty or defalcation of such forwardee. Should you deem it necessary to file suit on any of these accounts, this assignment makes you the party in interest in whose name suit is to be filed; if an attorney is necessary he is to be selected, engaged and compensated by you, and in all ways the handling and settlement of the suit is left to your choice, judgment and discretion.
"Date: ____ 19__.
"Signed ________________
"By _________________"
(On the sheet appear five columns, headed as follows:)
"Name.
"Last Known Address.
"Amount.
"Last Date of Purchase or Service.
"Remarks: Give any information you can regarding debtor's employment, etc., that will help us. If all or any part of the debt is covered by a note or other instrument, that instrument should be enclosed with this sheet. If the account is disputed, letters from the debtor will help. If his address is not known, give us the name and address of relatives, etc."
Other creditors use their own method of assignment, while still others do so orally, but with the understanding that the claim sheet covers the terms and conditions of the verbal assignment.
Defendant corporation pays nothing for the assignments at the time they are made, but, in the event of collection, transmits a certain percentage thereof to the assignor, retaining the balance for its fee for effecting collection. When it receives an account or demand for collection, an agent of the corporation calls upon the debtor at his home, writes him a letter, or telephones to him and endeavors to collect without suit, but often it resorts to the courts for collection. If suit is in the *Page 94 
district court, the corporation appears by duly licensed attorneys retained by it. If suit is in the justice court, the defendant Johnson or some other employee of the corporation prepares the complaint, summons, affidavit for attachment, writ of attachment and execution, and appears for the corporation unless an answer is filed or there is opposition to the suit. When suit is on a promissory note calling for the payment of attorneys' fees in case of suit a demand is made therefor, whether an attorney is employed or not. In most cases the defendant corporation advances the costs of suit, but in some cases, where recovery is doubtful, the assignor advances 50 per cent. thereof. Justice court judgments are in many cases abstracted and filed with the clerk of the district court and execution thereon is issued by the clerk of the district court. When collection is effected by suit or otherwise, the defendant corporation deducts its agreed commission and transmits the balance to the assignor.
The first question for determination is whether this court has[1]  jurisdiction to punish for contempt, if the acts complained of constitute unlawful practice of law. This court is by statute given the exclusive power to confer upon any persons the right to practice law (sec. 8936 et seq., Rev. Codes), and to deprive them of that right. (Sec. 8961, Id.) If any person shall engage in the practice of law without being authorized so to do, even though that practice is not done directly in this court, it has the right to punish for contempt. (Compare In re Bailey,50 Mont. 365, 146 P. 1101, Ann. Cas. 1917B, 1198; In re White,54 Mont. 476, 171 P. 759; In re Phillips, 64 Mont. 492,210 P. 89; State v. Barlow, (Neb.) 268 N.W. 95.)
The question of primary importance in this case is whether the[2, 3]  so-called assignments of claims to the defendant corporation are sufficient, so that the corporation may be said to be the real party in interest within the meaning of section 9067 of our Codes. The defendants contend that by reason of these assignments the defendant corporation becomes the real party in interest, and, therefore, when it files suit in its own *Page 95 
name on these claims it is entitled to conduct its own litigation. The contention of the plaintiff is to the contrary, namely, that these assignments are so in form only, and that they are insufficient to make the corporation the real party in interest.
Section 9067, Revised Codes, provides: "Every action must be prosecuted in the name of the real party in interest, except that an executor or administrator, a trustee of an express trust, or a person expressly authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom, or in whose name, a contract is made for the benefit of another, is a trustee of an express trust, within the meaning of this section."
Ever since the adoption of the original New York Code of 1848, the provisions of the above section have been a fundamental requirement of Code pleading. Prior to the adoption of the Code, if the assignee of a claim sued at law, he was turned out of court; and if the assignor sued in equity, he was turned out also. As a result of the adoption of this section, much diversity of judicial opinion exists as to the true meaning of this section. Many courts have held that the assignee who acquires the mere legal title to a claim for the purpose of collection, without any consideration other than an agreement to proceed with diligence to endeavor to collect and pay the proceeds of the collection, either in whole or in part, to the assignor creates in the assignee the status of a real party in interest who may bring the action on the claim. We shall at a later point in this opinion review and discuss some of these decisions. Other courts consider such transfers as being merely simulated, and hold that, though where, as here, no consideration being paid and the assignor being entitled to a substantial part of the proceeds of the claim assigned, the assignment does not operate to make the assignee the real party in interest within the meaning of the above section of our Codes, as is illustrated by the following decisions: Gaffney v. Tammany, 72 Conn. 701, 46 A. 156;Muller v. Witte, *Page 96 78 Conn. 495, 62 A. 756; Olmstead v. Scutt, 55 Conn. 125,10 A. 519; Waterman v. Merrow, 94 Me. 237, 47 A. 157;Coombs v. Harford, 99 Me. 426, 59 A. 529; Abrams v.Cureton, 74 N.C. 523; Martin  Garrett v. Mask,158 N.C. 436, 74 S.E. 343, 41 L.R.A. (n.s.) 641; Brown v. Ginn,Trustee, 66 Ohio St. 316, 64 N.E. 123; Cf. People v.Securities Discount Corp., 361 Ill. 551, 198 N.E. 681; State
v. James Sanford Agency, 167 Tenn. 339, 69 S.W.2d 895.
It will be noted, in giving consideration to section 9067, that certain exceptions are enumerated within the section itself, namely, executors and administrators, a trustee of an express trust, and persons authorized by statute. It would appear that if the legislature had intended that a real party in interest was one who held only the legal title of a claim, no reason can well be suggested for mentioning these exceptions. No one may dispute that a trustee of an express trust holds the legal title to the trust funds, the property of the trust; and, likewise, the executor and the administrator would ordinarily hold the legal title of a chose in action, the property of the estate. Thus it would appear to be clear, in the light of these exceptions, that it was the intention of the legislature in adopting this section that when it used the words "real party in interest," it meant exactly what it said.
Such is the view expressed by Mr. Kerr in his work on Pleading and Practice in Western States. At page 787 of this work it is written: "In other words, `assignment' means just what it says, using that word in its legal and technical sense; it is a contract whereby the owner of the thing in action divests himself of all interest and right and title therein, and of all right to receive or derive any further or future benefit therefrom, and vests all the interest and right and title, including the right to the money on the payment or enforcement of the same, for a valuable consideration, or as a gift or donation. If the owner still retains an interest in the `thing in action,' and has the right to receive the money arising from the enforcement thereof by an action at law or a suit in equity, *Page 97 
on execution or otherwise, the transaction is in no legal sense an `assignment,' as that word is used in procedural Codes. A transfer, either with or without endorsement, without consideration, and merely for the purpose of having an action instituted and prosecuted in the name of another, and enforcing the thing in action by a judgment and execution, retaining the right to receive the proceeds of such judgment and execution, not being in any proper and legal sense an `assignment,' does not make the party to whom the pretended transfer is made and in whose name the action is instituted the `real party in interest' and entitled to maintain an action thereon under the Code provision; and to hold that such camouflage of a simulated transfer does confer that right is not only to do violence to the clear and explicit language of the Code, but is also, in many instances, a judicial violation of, and evasion of, that other provision of the Code requiring nonresident plaintiff and foreign corporations to give security for costs; accomplishes no useful purpose in judicature, but does enable the owners of `things in action,' in some instances, to escape their legal obligations, and promotes the interests of collection agencies."
This same author, after observing that a view at variance with that expressed by him exists in the decisions of the courts of many states, has this to say: "* * *, but that does not change the facts in the case; the construction is unwarranted by the Code provisions themselves or by any common-law or statutory rule of construction; has too much of the air of `special pleading,' and can be but regarded as `judicial legislation,' and not an enforcement of either the letter or spirit of the statute." Finally, on page 791, the author declares: "The real party in interest in a `thing in action,' is the person who is to derive the substantial or monetary benefit therefrom. The camouflage of a `simulated transfer' cannot make the transferee the real party in interest — with all due respect to the decisions which, under a forced construction, hold otherwise. It is simply a correct interpretation of plain Anglo-Saxon words." *Page 98 
In 34 Yale Law Journal, page 273, an article on the subject of the real party in interest appears. Although the article takes a view somewhat opposite to that advanced by Mr. Kerr, nevertheless as one of the grounds for their view the authors advance the argument that in most Codes this section, as it exists in our Code, is divided into two sections, one providing merely that the action shall be brought in the name of the real party in interest, and the other containing the provisions of our section following the word "except." It is said that since the provisions are divided into different sections, they are of equal dignity, and that one does not thereby become the exception to the other. It is noteworthy that in this action such was the state of our statutory provisions prior to the adoption of the Codes of 1895. Section 570 of the Code of Civil Procedure of 1895 was in the same form as our present section. Prior to that time, however, we had this same matter contained in two sections. (See secs. 4 and 6, Title 2, Compiled Statutes of 1887.)
Counsel for the defendants have invited our attention to many cases holding that an assignment such as the one here under consideration would operate to make the defendant corporation, in actions prosecuted by it under these assignments, a real party in interest. Among these is the case of Cohn v. Thompson, 128 Cal.App. (Supp.) 783, 16 P.2d 364. That case, however, was based in part upon a statute expressly authorizing such assignments. The court in the course of its opinion cited many earlier California cases prior to the enactment of this statute, which announced a similar rule. The earliest decision there referred to is the case of Grant v. Heverin, 77 Cal. 263,18 P. 647, 19 P. 493. The California court there based its decision entirely upon the statement found in section 132 of the then current edition of Pomeroy on Code Remedies  Remedial Rights, which is quoted in the opinion. The quotation, however, states that if the assignment "of any action is absolute in its terms so that by virtue thereof the entire apparent legal title vests in the *Page 99 
assignee any contemporaneous collateral agreement by which he is to receive a part of the proceeds and has to account to the assignors and other persons for the residue, * * * such assignee is the real party in interest." Here resort is not necessary to a collateral agreement to ascertain the fact that the assignor is entitled to the proceeds and that he retains control over the chose in action, for it is apparent on the face of the written assignment. Some of the later California cases lay down the rule in entire accord with the contention of the defendants.
Counsel cite the case of Mosher v. Bellas, 33 Ariz. 147,264 P. 468. Arizona, however, as a part of their section, which is a counterpart of our section 9067, provides: "The assignee of any chose in action is a trustee of an express trust, within the meaning of this Section." (Sroufe v. Soto Bros.  Co.,5 Ariz. 10, 43 P. 221.)
Again counsel cite the case of Carson Pirie Scott  Co. v.Long, (Iowa) 268 N.W. 518, 519, as announcing the rule for which they contend, and without question the case so holds; but we find that Iowa for many years has had a statute providing that an open account "of sums of money due on contract may be assigned, and the assignee will have the right of action in his own name," etc. (Knadler v. Sharp, 36 Iowa, 232.) Thus it will be observed that the courts of Iowa and Arizona have express statutory authority for their conclusions, the like of which does not exist in this jurisdiction.
The courts of Kansas, after deciding otherwise, finally adopted a rule in accordance with the defendants' contention. (Manley v. Park, 68 Kan. 400, 75 P. 557, 66 L.R.A. 967, 1 Ann. Cas. 832.) The Kansas statute, although it is divided into two sections, is similar to our own. Likewise the court of South Dakota, in the case of Citizens' Bank v. Corkings, 9 S.D. 614,70 N.W. 1059, 62 Am. St. Rep. 891, under a statute similar to the Kansas statute, adopted a like rule.
It is noteworthy, in passing, that so far as promissory notes which are negotiable in form are concerned, they are on a *Page 100 
different basis, as under section 9067, Revised Codes, a person who is authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted. Section 8458, Id., provides that the holder of a negotiable instrument may sue thereon in his own name; and section 8402 defines a "holder" to mean the payee or indorsee of a bill or note, who is in possession of it or the bearer thereof.
We hold that the defendant corporation under these assignments, so far as accounts and claims other than negotiable promissory notes are concerned, is not the real party in interest and therefore not entitled to sue on such assigned claims, and that, when so suing, it was not representing itself, but its assignors.
Section 8944, Revised Codes, defines the practice of law as[4-6]  follows: "Any person who shall hold himself out, or advertise as an attorney or counselor-at-law, or who shall appear in any court of record or before a judicial body, referee, commissioner, or other officer appointed to determine any question of law or fact by a court, or who shall engage in the business and duties and perform such acts, matters, and things as are usually done or performed by an attorney-at-law in the practice of his profession for the purposes of this Act, shall be deemed practicing law."
Since the defendant corporation was only acting in a representative capacity when it prepared pleadings and filed them in the district court, which is something usually done and performed by attorneys at law in the practice of their profession, the corporation and its agent, Palmer Johnson, were practicing law. The same is true with reference to actions in the justice court, unless they were relieved by the provisions of section 8943, reading as follows: "If any person practice law in any court, except a justice's court or a police court, without having received a license as attorney and counselor, he is guilty of a contempt of court"; and also section 9629, which declares: "Parties in justice's court may appear and act in person or by attorney; and any person, except the constable *Page 101 
by whom the summons or jury process was served, may act as attorney."
It is suggested that the defendant corporation may practice law in a justice court under these sections, on the theory that the word "person" in section 9629, includes corporations. Section 16 of the Codes declares that the word "person" includes corporations wherever used in the Codes. A like provision occurs in section 10713. Section 8776 declares: "Whenever the meaning of a word or phrase is defined in any part of this code, such definition is applicable to the same word or phrase wherever it occurs, except where a contrary intention plainly appears." Section 15 of the Code provides that "words and phrases used in the codes or other statutes of Montana are construed according to the context and the approved usage of the language."
If the suggestion of the defendant corporation is worthy of consideration, we find that section 8936, Revised Codes, providing who may be admitted as attorneys, includes any citizen or person resident of this state. It is everywhere held that a corporation can never be authorized to practice law itself, and neither can it employ attorneys to practice for another. (2 R.C.L. 946; State v. James Sanford Agency, 167 Tenn. 339,69 S.W.2d 895; Richmond Assn. of Credit Men v. Bar Assn., (Va.) 189 S.E. 153, decided January 14, 1937, and not yet reported [in State report]; People v. Securities DiscountCorp., 279 Ill. App. 70, affirmed in 361 Ill. 551, 198 N.E. 681;In re Opinion of Justices, 289 Mass. 607, 194 N.E. 313; In reCo-operative Law Co., 198 N.Y. 479, 92 N.E. 15, 32 L.R.A. (n.s.) 55, 139 Am. St. Rep. 839, 19 Ann. Cas. 879; In re Otterness,181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319; People v.Merchants' Protective Corp., 189 Cal. 531, 209 P. 363;People v. Motorists Assn. of Illinois, 354 Ill. 595,188 N.E. 827; People v. People's Stock Yards State Bank, 344 Ill. 462,176 N.E. 901; State ex rel. Lundin v. Merchants' ProtectiveCorp., 105 Wash. 12, 177 P. 694; State v. Retail *Page 102 Credit Men's Assn., 163 Tenn. 450, 43 S.W.2d 918; Berk v.State, 225 Ala. 324, 142 So. 832, 84 A.L.R. 740.)
Section 5903, Revised Codes, enumerates the purposes for which private corporations may be formed. It includes many purposes. The section closes with the parting injunction: "No corporation must be formed for any other purpose than those mentioned in this section"; and nowhere in this section do we find any subject which even by inference or innuendo might include the practice of law. It is fundamental that a special statute controls a general one where both relate to the same subject. (Durland v.Prickett, 98 Mont. 399, 39 P.2d 652; Langston v.Currie, 95 Mont. 57, 26 P.2d 160; State ex rel. Daly v.Dryburgh, 62 Mont. 36, 203 P. 508.) Accordingly, the word "person" as used in section 9629 does not include a corporation.
Plaintiff contends that when the defendants sued to recover[7]  attorneys' fees on a promissory note they were guilty of the unlawful practice of law. Section 8958, Revised Codes, makes it unlawful for any court to allow attorneys' fees in an action when the party is represented by someone other than a duly licensed attorney. The defendant corporation is without justification in making such demand, and courts in allowing fees under such circumstances are subject to severe condemnation. The record discloses that attorneys' fees have been included in judgments where no attorney was employed in justice courts, but it is asserted that in no such case has the fee ever been collected. This practice is a direct violation of the statutes of this state and it amounts to an unlawful practice of law. The demanding of attorneys' fees is usually done by a licensed attorney in his practice, and therefore comes within the statutory definition of the practice of law.
Complaint is made of the defendants' joining both the husband[8]  and wife in all actions where a claim against either is involved. They have done so on the theory that the debt was due for the purchase of necessities of life, in which event such joinder may be proper. (Sec. 5790, Rev. Codes.) In *Page 103 
some cases it was shown that such joinder was made when the facts in nowise justified this practice. This course of conduct, when without the terms of the statute, should not be encouraged. It at least amounts to sharp practice.
Defendants prior to the commencement of this proceeding[9]  frequently addressed to the debtors a document designated as a "final notice." This instrument is on regular legal paper commonly used in court proceedings and bears the names of the parties, followed by the appropriate designation of plaintiff and defendant. On it appears the statement, "Original to the defendant, and duplicate to the clerk of the court." On the back of the instrument appears a notation, as follows: "Final notice filed April 27, 1935." These instruments are designed to simulate legal process and were sent out before any action was commenced in court. Documents of similar import have been condemned in the case of State Bar of Oklahoma v. Retail Credit Assn.,170 Okla. 246, 37 P.2d 954, and we likewise concur in what was there said in condemnation of this practice.
The whole course of conduct as disclosed by the record in this case manifests an attempt on the part of the defendants unlawfully to practice law and to seek either to ignore or evade the statutes. Accordingly we find the defendants to be guilty of contempt. Let judgment be entered finding the defendants guilty of contempt and fining them in the amount of the costs of this proceeding.
ASSOCIATE JUSTICES STEWART and MORRIS concur.