Court Opinion

ID: 9771371
Source: CourtListenerOpinion
Date Created: 2023-08-29 16:40:09.850962+00
Date Added: 2024-06-11T07:31:28.923510
License: Public Domain

Avery, P. J.,
(Western Section), (dissenting).
I am constrained to disagree with my learned colleagues in their final conclusions to their very excellent Majority Opinion filed in this cause, but I do agree with many of the statements made in the Opinion. Some of these with which I do agree in connection with the facts of this cause are as follows:
(1) “These facts are fully set out in the Opinion of the learned Chancellor filed November 22, 1957, together with his reasoning and ruling on the issues presented”;
(2) That, the defendants, Commerce Title Company and the Mid-South Title Company, “are, or were, operating under the provisions of Chapter 34, Public Acts of 1935, carried forward into Tennessee Code Annotated as Sections 56-3401 to 56-3427, inclusive, entitled ‘Title Insurance Law’
(3) That Section 29-302 of T. C. A. defines the “Practice of Law” and it also defines the term “Law Business”;
(4) Proper reference is made to the published Opinions of the Courts of Tennessee relative to the *133“subject of unlawful practice of law”, and that “none of these cases, however, throws any real light on the issues to be determined in the instant case, and we, therefore, feel constrained, as did the learned Chancellor, to consider the case before us as one of first impression in Tennessee”;
(5) That in the consideration of this cause, “it is our idea that, in fixing the public policy of this State, we should consider of primary importance the effect which it will have in protecting the rights and interests of the public rather than the benefits which may accrue to lawyers of this State”;
(6) “That the public policy of this State, established by court decisions, should be kept in harmony with public policy established by statute”;
(7) “We have reached the conclusion that * * * some of the activities of the defendants constitute ‘practice of law’ or the doing of ‘law business’
I disagree with my distinguished colleagues in their following conclusions:
(1) That notwithstanding the fact that some of the activities of the defendant constitute “practice of law” and the doing of “law business” * # “they should not be adjudged to constitute unlawful practice of law, nor enjoined as such”.
It is my conception of the law in Tennessee, as defined by statute, that every person, association or corporation is prohibited from doing that which is defined as “practice of law” and that which is defined as “law business” unless he shall have been duly licensed therefor and while his license therefor is in full force and effect.
*134(2) It is my further conviction that when a valid statute defines a profession, whether it he law, medicine, teaching, engineering’ and others too numerous to mention, and forbids the practice of such profession without being duly licensed by the duly licensing authority and declares, as provided by the Constitution of this State, that the ‘‘Public Welfare Requires It”, that Act must be accepted as fixing the public policy or the policy of the public until it is validly overthrown or repealed.
(3) I do not agree with the learned Chancellor in his determination that the bill must be dismissed as to the Commerce Title Company, for it is the title insurer as authorized by Sections 56-3401 to 56-3426, inclusive, of T. C. A. entitled “Title Insurance Law”, and having delegated every authority it has to the Mid-South Title Company, as its agent, with no restrictions thrown about the agency over the way and manner it shall engage in the business of insuring titles, that when such agency has engaged in the practice of law its principal is not bound by such acts and not restricted by the same rules as the legal agency is subject to.
(4) I disagree with that statement in the Majority Opinion that:
“It is apparent from a consideration of the Chancellor ’s opinion, * * * that his decision was influenced or motivated by a desire to protect the lawyers of general practice from what he considered unfair competition.”
. Therefore, to me it is not a question for this Court to determine, nor was it a question for the Lower Court to determine, that the interest of the public is such that can be decreed by a court to overthrow the declaration of *135the legislative body of the State declaring that the pnblic welfare demanded the passage of a constitntional Act,' if the doing of those things are prohibited by snch a valid Act, for in so doing we bring about legislation by judicial act rather than legislative act.
The question which was for determination by the learned Chancellor and is now for determination by this Court, as I view the cause, is simply whether or not some of the acts of the Commerce Title Company aiid its agent, Mid-South Title Company, as carried into effect by the agent, in the process of insuring titles, violates the provisions of said Section 29-302 and its accompanying prohibiting law, which is Section 29-303. It seems very clear to me that no one but a licensed attorney is permitted to do that which is defined as “practice of law” or that which is defined as “law business”, either or both, as set forth in said Section 29-302 as-follows:
“Definition of practice and business. —
“The ‘practice of law’ is defined to be and is the appearance of an advocate in a representative capacity or the drawing of papers, pleadings or documents or the performance of any act in such capacity in connection with proceedings pending or prospective before any court, commissioner, referee or any body, board, committee or commission constituted by law or having authority to settle controversies. The ‘lawbusiness’ is defined to be and is the advising or counseling for a valuable consideration of any person, firm, association, or corporation, as to any secular law, or the drawing or the procuring of or assisting in the drawing for a valuable consideration of. any paper, document or.instrument affecting or *136relating to secular rights, or the doing of any act for a valuable consideration in a representative capacity, obtaining or tending to secure for any person, firm, association or corporation any property or property rights whatsoever.”
That part of Section 29-303 which reinforces the provisions of Section 29-302 is embraced in its first sentence, and the remaining portions of that Section simply provide punishment for the violation of the business of “practice of law” and the “law business”. The first sentence thereof is as follows:
“No person shall engage in the ‘practice of law’ or do ‘law business,’ or both, as defined in Sec. 29-302, unless he shall have been duly licensed therefor, and while his license therefor is in full force and effect, nor shall any association or corporation engage in the ‘practice of the law’ or do ‘law business,’ or both, as defined in Sec. 29-302.”
Looking for a moment at the last clause in the paragraph immediately above quoted, let us see what some of our sister states have put in their statutes of a similar nature.
We first look at the State of Alabama. In its Code under Title 46, Section 42, the Legislature, under the heading “Who may practice as attorneys”, describes the practice of law under four heads (a) (b) (c) and (d), but it is not necessary to quote them in full, for it concludes with this provision:
“* * * but any such person, firm or corporation engaged in preparing abstracts of title, certifying, guaranteeing or insuring titles to real or personal property are prohibited from preparing or drawing *137or procuring or assisting in the drawing or preparation of deeds, conveyances, mortgages and any paper, document or instrument affecting or relating to secular rights, which acts are hereby defined to he an act of practicing law, unless such person, firm or corporation shall have a proprietary interest in such property, however, any such person, firm or corporation so engaged * * * guaranteeing or insuring titles shall be permitted to prepare or draw or procure or assist in the drawing or preparation of simple affidavits or statements of fact to be used by such person, firm or corporation in support of its title policies, to be retained in its files and not to be recorded. ’ ’
The Act then declares violations to be a misdemeanor, and provides punishment.
In the State of Mississippi by Section 8682 of the Mississippi Code, recompiled in Volume 6A, under the heading “Unlawful to practice law without license — certain abstract companies may certify titles”, in its first sentence makes it a misdemeanor and fixes the punishment for the practice of law in violation of the same, and in defining what that criminal offense shall be, it is said:
“Any person who shall for fee or reward or promise, directly or indirectly, write or dictate any paper or instrument of writing, * # * or who shall write or dictate any bill of sale, deed of conveyance, deed of trust, mortgage, contract, or last will and testament, or shall make or certify to any abstract of title to real estate other than his own or in which he may own an interest, shall be held to be engaged in the practice of law. ’ ’
*138That Section then provides:
“ * * * shall not, however, prevent title or abstract of title guaranty companies incorporated nnder the laws of this state from making abstract or certifying titles to real estate where it acts through some person as agent, authorized under the laws of the state of Mississippi to practice law; * * *”.
In the State of Kentucky by Chapter 30, Sec. 30.170 of the Kentucky Revised Statutes, under the general heading “Court rules governing practice of law and State Bar”, the Court of Appeals is authorized and directed to adopt and promulgate rules:
“ (a) Defining the practice of law; ’ ’
and under the 2nd Section thereof, it is provided:
“The rules of court adopted and promulgated under this section shall supersede all laws or parts of law in conflict therewith, to the extent of the conflict. ’ ’
Under the 3rd Section thereof, it is provided:
“No rule adopted and promulgated under this section shall prevent a person not holding himself out as a practicing attorney from writing a deed, mortgage or will, or prevent a person from drawing any instrument to which he is a party.”
In the State of Arkansas, under the general heading “Attorneys at Law”, Title 25, there are many provisions with respect to the practice of law, but the whole purport of what is meant is set forth in subsec. 25-211 and 25-213. The first paragraph of subsec. 25-211 is as follows:
*139“Unauthorized practice — Practice of law defined.—
“No person other than a natural person duly-licensed and admitted to practice law under the laws of this state and rules and regulations prescribed by the Supreme Court of this State shall do any act or thing which constitutes the practice of law, and the doing of any of the following acts by any person, firm, or corporation, whether with or without compensation therefor is hereby defined as an act constituting the practice of law;”
Then subsec. 25-213 is as follows:
“Intent of act. — Subordinate to Supreme Court regulations.—
“It is hereby declared to be the intent of this act (secs. 25-211 — 25-214) to be in aid of and subordinate to the right of the Supreme Court of Arkansas to regulate and define the practice of law and prevent and prohibit the unauthorized or unlawful practice thereof by appropriate rules, orders and penalties.”
It is, therefore, obvious that the Legislature in the State of Arkansas has set down a public policy by which it has declared that the rules and regulations set forth by the Supreme Court
“to regulate and define the practice of law and prevent and prohibit the unauthorized or unlawful practice thereof by appropriate rules”
do and will constitute that which protects the public interest.
*140In the Majority Opinion is cited LaBrum v. Commonwealth Title Co. of Philadelphia, 358 Pa. 239, 56 A. (2d) 246, as authority for the conclusions expressed. We think the Majority Opinion overlooks the fact that in the State of Pennsylvania there is a specific Act, Act April 29,1874, same being Public Law 73, and in Sec. 29 thereof, which Act provides:
“ Companies incorporated under provisions of this act for the insurance of owners of real estate, mortgages, and others interested in real estate, from loss by reason of defective titles, liens and incumbrances, shall have the power and right to make insurances of every kind pertaining to or connected with titles to real estate, and shall have the power and right to make, execute and perfect such and so many contracts, agreements, policies and other instruments as may be required therefor.” (Emphasis supplied.)
In that case the Supreme Court referred to the Act defining the practice of law and prohibiting any person to practice except a licensed attorney, and then it said, as shown in that part of the Majority Opinion quoted, relating to what the charter of the corporate defendant authorized it to do:
“Its charter authorizes all steps necessary for the enjoyment of its corporate franchise.”
Of course that provision in its charter is reinforced by the above-quoted Public Law 73, See. 29, which in my opinion justified the Opinion of the Supreme Court of Pennsylvania in that case, but it is no authority for what constitutes matters in the public interest under our Tennessee statutes.
*141In the case of Cooperman v. West Coast Title Guaranty Co., Fla., 75 So. (2d) 818, 819, which is another one of the purported cases from the State of Florida relied upon in the Majority Opinion, we think that the Majority Opinion overlooks the fact that the judgment of the Lower Court under consideration by the Supreme Court, is as follows:
“After much pleading and intervening and taking of depositions, the chancellor decreed that these ap-pellees could with impunity fill out standard forms of conveyancing instruments and alter them to suit the occasion, so long as they were acting as agents for their principals, the title insurance companies. He also held that these appellees could decide from the examination of abstracts and public and other records whether as agents they would grant commitments for policies of insurance eventually to be issued by their principals. He ruled that the companies could complete forms requisite to guaranty or insurance of loans by the Federal Housing Administration and the Veterans’ Administration. ‘Beal estate brokers,’ he decided, could complete standard conveyancing forms such as preliminary contracts, deeds, mortgages, notes, assignments and satisfactions where in the instruments, subsequent to the contract, only names, dates, descriptions, amounts and ‘latest tax year liability’ were to be inserted. ’ ’
In addition to the one sentence quoted in the Majority Opinion, in the Cooperman v. West Coast Title Guaranty Company case, the Supreme Court further said:
*142“But what we have written applies only to the performance of those acts which are indispensable to the determination of insurability and must not be construed as sanctioning a charge of a/ny sort, in addition to the premium for the issuance of title insurance, or approving charges for services rendered in connection with the guaranty or insurance of loans by the Federal Housing Authority or the Veterans’ Administration, whether the loans be connected with title insurance transactions or not.” (Emphasis supplied.)
And the Opinion was completed with this statement:
“In the main the decree is affirmed, but those parts of the decree inharmonious with the views we have expressed or with the case just cited are reversed.
“Reversed in part; affirmed in part.”
In addition to the above, I think the Majority Opinion overlooks the fact that in that case there is not one single reference to a statute which defines “the practice of law” in the State of Florida. Certainly they had no such statute as we have in Tennessee.
In the case of State Bar Association of Connecticut v. Connecticut Bank & Trust Co., 20 Conn. Sup. 248, 131 A. (2d) 646, the Supreme Court of the State of Connecticut had under consideration Sections 7638-7641 of the General Statutes of the State of Connecticut, 1949. The suit was filed by the State Bar Association and undertook to restrain certain banks and trust companies from performing the functions which the Bar Association alleged to be “the practice of law”, and in construing the provisions of the General Statutes of *143that State with respect to the practice of law, it said that to constitute “the practice of law”, service must be rendered for others. In the construction of the statutes which it had under consideration, the Supreme Court quoted with approval from Merrick v. American Security & Trust Company, 71 App. D. C. 72, 107 F. (2d) 271, just as stated in the Majority Opinion, hut it nowhere had under consideration, if indeed it had such a statute in that State, where an insurance company was authorized to insure titles under a law which permits such. We must not overlook the fact that the defendant in the instant ease is operating under a statute which authorizes it to do a particular business. Neither can we overlook the fact that the general banking business, such as was carried on by the defendants in this case of State Bar Association of Connecticut v. Connecticut Bank & Trust Co., is a much broader business in every scope of its activity than the business of insuring titles. Our general knowledge of the banking business everywhere in this country reveals the truth of the foregoing statement without elaborating at all upon any particular service that banks throughout the country render to the public.
In the case of Cowern v. Nelson, 207 Minn. 642, 290 N. W. 795, 797, the defendant was a real estate broker who was doing in great part just what the Mid-South Title Company was doing in this case. However, he had no license to practice law, but he was drawing instruments such as deeds, leases, transfers, and the like in connection with his real estate brokerage business, making charges therefor. The Lower Court, by its injunctive relief, enjoined defendant from doing any of those acts on the theory that he was engaged in unauthorized practice of law, as contained in “Laws 1931, c. 114 [M. S. A. *144sec. 481.02] ’ ’. The Supreme Court of Minnesota only modified that injunction so as to prevent the defendant from making a charge for such action. In so doing, the Supreme Court of Minnesota said:
“By comity we accept the legislative declaration of policy relating to brokers contained in L. 1931, c. 114, and remand the case to the trial court with instructions to eliminate from the injunction any restraint on the defendant, when acting as a broker for the parties, or as agent for one of them, to a sale or trade or lease of property or to a loan, from drawing or assisting in drawing without charge therefor such papers as may be incident to such transaction.”
It is very true that the Court in effect said that in rare eases in connection with the brokerage business where it becomes necessary to draft such instruments and where it was done without charge, the harm which would come therefrom would be less than the inconvenience the public might suffer, if it was necessary in such rare cases to call in a lawer for that purpose. In that case also the Legislature of Minnesota had undertaken to authorize such brokers to make a charge for that type of service, and in that connection the Supreme Court said:
“We do not accept the legislature’s declaration that in such matters he may charge for such services. ’ ’
In the case of Auerbacher v. Wood, 139 N. J. Eq. 599, 53 A. (2d) 800, 802, the Majority Opinion properly quotes a section thereof, but I think it overlooks the fact that this suit was filed by the Bar Association for the avowed and express purpose as set out in the bill in Chancery *145to enjoin Citarles A. Wood, who was not licensed to practice law in tlie State of New Jersey, from representing parties before the National Labor Belations Board, he not being an attorney. The Court refused the injunction upon the theory that the rule of the National Labor Be-lations Board gives to a party the right “to appear in person, or by counsel, or by other representative, or industrial relations consultant.” I think the Majority Opinion overlooks the analysis of the work being done by defendant as determined from the facts of that case in that regard, for the Supreme Court of New Jersey said:
“In determining whether a man is practicing law, we should consider his work for any particular client or customer as a whole. I can imagine defendant being engaged primarily to advise as to the law defining his client’s obligations to his employees, to guide his client along the path charted by law. This, of course, would be the practice of law. But such is not the fact in the case before me. Defendant’s primary efforts are along economic and psychological lines. The law only provides the frame within which he must work, just as the zoning code limits the kind of building the architect may plan. The incidental legal advice or information defendant may give does not transform his activities into the practice of law. Let me add that if, even as a minor feature of his work, he performed services which are customarily reserved to members of the bar, he would be practicing law.” (Emphasis supplied.)
Our statutes defining the “practice of law” and “law business” clearly indicate to me that the defendants are *146engaged in the “performance of services which are customarily reserved to members of the bar”.
I am further of the opinion that the analogy which the Majority Opinion makes of the case before us to the activities of a real estate broker in Tennessee, as regulated and set out in Section 62-1325, T. C. A., is inconsistent wherein the Majority Opinion states, in drawing the analogy, that:
‘ ‘ The statute which prohibits the drawing, by real estate brokers, of legal documents not connected with the real estate business, but preserves that right to them, if such document pertains to real property, is set out in Section 62-1325, T. C. A.”
And then it quotes that Section as follows:
“Any person licensed hereunder that engages in drawing any legal document other than contracts to option, buy, sell, or lease, real property, may have his or her license revoked or suspended as provided in this chapter.”
The Majority Opinion concludes from that provision that such a broker is authorized to write deeds, trust deeds, and the like, in connection with his business as a licensed real estate broker. I do not construe the above quote to mean that which the Majority Opinion specifically declares. I think that provision means just what it says, and that it only gives the real estate broker the right to prepare contracts, giving him the right to bind his client “to option, buy, sell, or lease, real property”, but the preparation of the deeds and other documents necessary to a compliance with the executed contract which he draws are matters which the client must personally do *147for himself or obtain the services of a lawyer to do. I think the Majority Opinion gives no effect to the preposition “to” immediately following the word “contracts”. Certainly the Majority Opinion is correct in stating that no snch provision is contained in the “Title Insurance Law”, Secs. 56-3401 to 56-3427, T. 0. A., by which the defendants operate their business. To me the principle and policy enunciated in the above quote, not being incorporated in the “Title Insurance Law”, distinctly restricts the activity of a title insurer much more than the act licensing a real estate broker as it relates to activities referred to in our Statute as “practice of law” or that of “law business”.
In subsection (b) of Section 56-3402, T. 0. A., we find the definition of the phrase “Title Insurance Business”, in the following words:
“ ‘Title insurance business’ is defined to be the insuring or guaranteeing of titles to real property, or interests therein, or the validity, accuracy or sufficiency of liens or encumbrances thereon, provided that nothing contained in this chapter shall make it. necessary for any corporation making abstracts of title; certifying to the correctness thereof; issuing certificates as to the record title to real estate, or. furnishing information regarding. title thereto, to comply with this chapter, when such information does not take the form of, and is not, in fact, an insurance of the title to real estate, or interest therein, or of such liens or other encumbrances.”
Under Section 56-3403, T. C. A., the powers and authority of title companies are specifically set out under two headings as follows:
*148“(a) To own, lease or construct abstract or title plants, and to operate and maintain the same, and to make, certify, guarantee and issue abstracts of title.
“ (b) To act as escrow agent in connection with any transaction relating to the purchase, sale, exchange, lease, mortgage, or other acquisition, disposition, or encumbrance of property, real or personal, or any interest therein.”
There is nothing in the Act which authorizes the title companies to employ lawyers to act for others, nor to maintain Staff Lawyers who act for others brought into defendants ’ tunnel of operation as a title insurer. "When it designates a salary for an employed lawyer, furnishes him with stationery, postage, office equipment, office, secretary, and everything necessary to the ordinary practice of law, screened by the title insurer’s advertising, free of any rent insofar as actual payment is concerned, it cannot be said that such overhead being furnished him without charge and permitting him to use all of such facilities to engage, as the Majority Opinion has said, in “law practice” or “law business”, and he does so for others, making a charge therefor, such as writing deeds of correction, warranty deeds, trust deeds, and other doc-' uments commonly known to be within the definition of our Statute defining “law business”, puts the employer in the business of practicing law or doing law business illegally.
I think that counsel for the Bar Association of Tennessee and the Bar Association of Memphis, both incorporated, have aptly quoted from the case of San Antonio Bar Association v. Guardian Abstract & Title Co., 156 *149Tex. 7, 291 S. W. (2d) 697, 703, which Opinion indicates to be parallel issues in that case with these in the instant cause, and which supports my position as stated in this Opinion relative to the facts of this cause as related and governed by our statutes defining “law practice” and “law business” hereinbefore quoted. It further supports the injunctive relief granted by the learned Chancellor and will further support my Opinion to the effect that this injunctive relief should extend to the Commerce Title Company. In that case the Supreme Court of Texas said:
“To declare in rather general terms, as did the Court of Civil Appeals, that the injunction shall be inoperative whenever the third parties in question ‘request’ these lawyers to perform the services, would open the door to easy evasion of the order. At least for all practical purposes, such a modification might well protect the respondents where the ‘request’ is not genuine, but actually responds to the suggestion of a title insurance salesman or is otherwise influenced by the corporation. A whole system of operation built up over the years is hardly to be varied in its true consequences by some overnight change of this or that single feature or formality of it. If the intimate association now existing between the lawyers and the business corporation be continued in substantially its present form, it would be not at all unlikely for nongenuine ‘requests’ to be made, and this would probably happen in such a way that the vice in the request would be difficult of both detection and proof.
*150“These latter risks we do not feel disposed to take after weighing them in the balance with other factors, including the claimed rights of the respondents that are urged as requiring a modification. The interests of the public are involved and are safeguarded by the decree. The respondents are in default to the public and have evidently profited by that default over the years. Two of them are lawyers and must, or should, have known that they were ‘ skating on thin ice ’ since the beginning. As indicated, we see good reason to doubt that any proper modification of the decree which might be devised could be of much practical value to them. No injunction decree will ever be perfectly just to both sides. In this ease we consider it best to leave it as the trial court entered it, so that, if the respondents wish to pursue in future a somewhat similar course to what they have followed in the past, they will have the burden of justifying alleged new situations as they arise, rather than, by a purported modification, forcing the petitioners to carry all over again the burden they have carried for the public and the profession up to this point.”
Now, as to the question of agency on the part of the Mid-South Title Company as the exclusive agent for the Commerce Title Company, it seems to me that it cannot be legally maintained that when it does the work outlined by the proof in this cause, and then writes the title insurance in the name of the principal or have an officer of its own to sign the title insurance contract, which is nothing more than an administrative act, there is no escape from the conclusion that the principal is engaged in the same business that its agent is performing, and particularly is *151this true where they are each authorized to engage in title insurance business.
Furthermore, when a principal relegates itself to the position of permitting its agent to conduct its business, only reserving unto itself a monetary consideration for the use of its name upon a title policy as insurer thereof, does no less than assume an easy chair position and acquiesces in the conduct of its agent so as to make the agent’s activity the same as if it were doing the same thing in the same way, and cannot escape the same legal restraints properly applied to its agent.
I do not conclude that the Chancellor’s injunction is broad enough to restrain the defendants from all of the acts which I consider to be illegal practice of law as defined and made a public policy by T. C. A. Sections 29-302 and 29-303; but suffice it to say that I concur in his very able Opinion and the judgment that he has rendered in this cause which will in all probability remedy what I consider presently necessary.
In conclusion I might say that there is no other profession known to our American society and way of life that has given as much protection to the liberty, freedom and rights of the individual under our constitutional guarantees than the Legal Profession, and it is my conscientious conviction that it has been more concerned with that which is in the interest of the public, made up of every profession, vocation and avocation than any other group, and that which attempts to invade the rights guaranteed to the legal profession in this State by the Statute defining the “practice of law” and “law business ’ ’, as is now under consideration in this cause, vitally and adversely affects the interest of the public.
*152Without quoting from the evidence which the Chancellor found preponderates in favor of the decree he entered, in which I concur, and with all due respect to the very-high type and excellent staff attorneys, for whom I have the profoundest esteem, it seems to me that the proof clearly preponderates to the effect that the defendants through their advertising, their employees, and these salaried staff attorneys, whose every facility is furnished them free of charge, are operating a sort of mass production line of “law business” in such a fashion as that when an applicant for title insurance or an applicant for an examination of his title so as to determine whether it is an insurable title, whether he actually desires title insurance or not, has entered the corridor leading to the production line and passes through the door thereof, his chances of selecting a lawyer of his choice, other than one of the Staff Lawyers, may he embarrassing, and at most is very slim.