Alamo Title Co. v. San Antonio Bar Ass'n

Decision Date27 September 1962
Docket NumberNo. 4067,4067
Citation360 S.W.2d 814
PartiesALAMO TITLE COMPANY, Appellant, v. SAN ANTONIO BAR ASSOCIATION et al., Appellees.
CourtTexas Court of Appeals

Moursumd, Ball & Bergstrom, Morriss, Morriss, Boatwright & Lewis, San Antonio, for appellant.

Davis Grant, Austin, Frank M. Rosson, Philip E. Hamner, San Antonio, for appellees.

WILSON, Justice.

The San Antonio Bar Association and the Unauthorized Practice Committee of the State Bar of Texas obtained a permanent injunction restraining appellant, a title in surance corporation, from preparing certain legal instruments in real estate transactions. Jury findings were to the effect that an attorney, Brown, had prepared such instruments as appellant's agent and employee between 1954 and January 1, 1961; and the business of appellant and Brown's law firm 'were operated as a unit' during this period. Although the form of the issues is attacked, it is not contended the findings are not supported by the evidence.

Appellant urges the court erred in not dismissing the case as moot, and in granting the injunction, because there was no evidence or finding of reasonable probability or threat that the acts enjoined would be done in the future; and because the undisputed evidence establishes the contrary.

While the facts here vary in detail, the basic nature of this case is similar to that of San Antonio Bar Association v. Guardian Abstract & Title Co., 156 Tex. 7, 291 S.W.2d 697. From 1944 to December 2, 1954, Brown, a stockholder in the corporation, was a salaried employee of appellant, examining titles, advising and preparing legal instruments for customers in connection with appellant's issuance of title insurance policies. The evidence was conflicting as to whether fees charged and collected during this period for preparation of instruments were paid to appellant or Brown.

On December 2, 1954, as a result of complaints by the grievance and the unauthorized practice committees, appellant 'made an attempt then to segregate Mr. Brown's legal operations from our own, and made an agreement with him' by which appellant furnished 'as in the past' office space, supplies and equipment, and Brown made title examinations. By this written agreement appellant was to pay Brown $200 a month and $2 each for titles examined in excess of 200 per month. Appellant orally 'changed the rules a number of times thereafter,' as the 'Bar Association objected to certain practices.' Brown moved his office to adjoining and connected premises, where he set up his 'own little force of stenographers' and attorneys who had been employed by appellant. There was evidence Brown never received the $200 payment, and he was paid no money for title examinations. Appellant's bookkeeper testified that during this period no changes were made in the records kept for the title company pertaining to Brown. He was paid sums in excess of $28,000 per year as fees for preparation of instruments which were charged and collected by appellant, out of which Brown paid salaries of attorneys and stenographers who did the work in his office. Appellant's president testified these attorney-employees devoted substantially all their time to title examinations for appellant.

Brown did not employ the stenographers who prepared the legal instruments, he testified, but after appellant employed them they were trained by him, and he importuned appellant's president to raise the salaries of these, and the title examiners in his office. He furnished to appellant's closing agents a fee schedule of charges for preparation of deeds, releases, notes, deeds of trust, extensions and other instruments prepared in his office. The system in use was that the closing agent delivered a title policy file to Brown's stenographers, who prepared required instruments from the title report. Brown 'scarcely ever looked the papers over', as this was usually done by a supervising stenographer. He never had 'personal contact with the parties' when transactions were closed at appellant's branch offices, he said, and 'very seldom' at his office. Appellant's president testified he repeatedly instructed all his 'closers' to inform parties to real estate transactions that legal documents had to be prepared by an attorney; to inquire what attorney the parties desired; that if the customer requested appellant to prepare the papers, to state it could not do so; but if requested, to suggest an attorney, to state 'if you want, you may employ David C. Brown, who is an attorney who offices next door, and who is associated with the title company.' A 'closer' testified she never received such instructions.

After further discussions with the Bar Association in 1959 and 1960, appellant entered into a formal written contract with Brown January 2, 1960 under which Brown was to examine titles for $7.30 each, furnishing associate attorneys and employees at his cost. He was to be charged by appellant $940 per month for itemized services, including office and equipment rental, library maintenance, postage, stationery, supplies and bookkeeping service. 'Because of necessary proximity of Brown's offices' he and his employees were authorized to participate in appellant's profit-sharing, insurance and retirement plans.

Thereafter, Brown said, if attorneys complained that he was 'apparently handling papers' for their clients, he would reply, 'Very well, if we have done it you will get the money.' He testified that after January 2, 1960 he couldn't recall 'any substantial change in the system of operations'; that seven months later he began a nine-week hospital confinement for injury, after which he was disabled. He testified he received about $30,000 per year from charges for preparing papers, out of which he paid salaries; and that he received a salary of $500 per month. During a six-month period in 1960 there were 1193 title policy applications, some of which were cancelled. In 125 of these no attorney's fee was charged; in 606 the fees for preparing instruments were charged by appellant for Brown's account. There is evidence to show the sums remitted to him by appellant as...

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