Bump v. District Court of Polk County, 45639.

CourtUnited States State Supreme Court of Iowa
Citation5 N.W.2d 914,232 Iowa 623
Docket Number45639.
Decision Date27 October 1942

5 N.W.2d 914

232 Iowa 623

BUMP et al.

No. 45639.

Supreme Court of Iowa

October 27, 1942

[5 N.W.2d 915]

H. L. Bump, of Des Moines, for appellants.

Edward L. O'Connor, of Iowa City, and Comfort, Comfort & Irish, of Des Moines, for respondent.

HALE, Justice.

The plaintiffs in this proceeding are members of the Polk County Bar Association and constitute the "Committee on Unauthorized Practice of Law", and as such committee and as members of the bar, for themselves and other attorneys, brought this action in the District Court of Polk County, asking for an injunction and citation for contempt against the defendant, J. C. Rockwell, operating under the trade name of the [232 Iowa 624] Tax Payers Research Bureau. The petition alleges that Rockwell, who was not a lawyer, was engaged in soliciting from various persons, firms and corporations their claims for refund on taxes, that this solicitation was made in various ways, by telephone calls, by written letters and personally. The petition also alleged that the defendant had also solicited claims for money deposited by the receivers of closed banks where the receiver was unable to locate the person entitled thereto. That in so proceeding, defendant was practicing law without a license and was in contempt of court. The action, on plaintiffs' motion, was transferred to law, and thereafter, on motion of defendant, respondent herein, the court struck out that part of the petition and prayer asking for injunction. A second motion to strike and a demurrer to the petition were then filed and afterwards overruled. The written explanation of defendant followed, as authorized by Section 12546, Code of 1939.

As shown by the evidence in the trial court, through the means set out above, defendant procured assignments of many claims in the bank receiverships, for which he paid 50 cents on the dollar, and also about 1,300 claims for tax refunds, some of which he filed with the board of supervisors, and had petitions prepared for others. He also employed salesmen to solicit for the tax refund claims, which were prepared for him by a lawyer. No legal action or suit had yet been brought on the tax refunds.

The manner in which defendant proceeded in the collection of these tax claims was as follows: he procured from the persons to whom refunds were due under a decision of this court, an agreement and assignment, of which the following is a copy in blank:

"Taxpayers Research Bureau
"Southern Surety Building
"Des Moines, Iowa
"Agreement and Assignment

"For valuable consideration (being services of Taxpayers Research Bureau), the undersigned does hereby sell, assign, transfer and convey unto the Taxpayers Research Bureau all the right, title, and interest which the undersigned has in and [232 Iowa 625] to any and all claims and rights of refund to certain taxes collected from the undersigned by the Treasurer;

of......County, Iowa, for the years...... covering the following described property, situated in said County:

"The undersigned does further grant unto the said Trustee full power and authority to do all the acts necessary for the collection of said claim, including the maintenance of legal proceedings, either in the name of the undersigned or in the name of said Trustee and to receive and receipt for payment of said refund in the name of the undersigned or in the name of said Trustee.

"Signed ................ 19....
"Taxpayers Research Bureau
"By ............................

"It is agreed that Taxpayers Research Bureau, party of the first part, shall without incurring any liability upon part of the second part, present a tax refund claim for said part of the second part and shall receive for services 50% of any sums collected under said claim and pay over the balance to second party.

"Taxpayers Research Bureau agrees to deposit all funds collected under this agreement in its Special Account at Bankers Trust Co. in Des Moines and to disburse to Second Party from said account 1/2 of said collection made under this agreement.

"Signed......, 19.....

"Taxpayers Research Bureau
"Party of First Part
"Party of Second Part"

The names of the taxpayers were obtained from the tax [232 Iowa 626] rolls. No money was [5 N.W.2d 916] paid to the taxpayers at the time the assignments were procured.

The matter of money due from closed banks was handled in another way. In the clerk's office was a list of the owners of these unclaimed funds. After the names were copied from such list, defendant sent to them a letter, of which the following is a sample:

"Taxpayers Research Bureau
"General offices--Southern Surety Building
"Des Moines, Iowa
"January 20, 1940.
"Mr. J. Elton Carter
"2420 East 25th Street
"Des Moines, Iowa
"Dear Mr. Carter:

"'Finders Keepers, Losers Weepers--'

"Not this time. Our researches have found a sum of money for you. We feel that in making this available to you quickly, in cash, and as finder's fee, we are entitled to divide it fifty-fifty.

"Enclosed you will find a sight draft on us, amounting to one-half of the amount recoverable.

"You may exercise three choices:

"(a) Sign the draft; place it in enclosed envelope and mail it to our bank. The bank will remit.

"(b) Deposit properly signed draft to your account--it will be paid.

"(c) Call at our office for the cash.

"We are sure you will be pleased with this service.

"Very truly yours.

"Taxpayers Research Bureau
"JCR :G Signed by J. C. Rockwell
"J. C. Rockwell"

The sight draft mentioned in the letter is in the following form:

[232 Iowa 627] "Payable Through
"Bankers Trust Company
"Des Moines, Iowa
"This Draft will not be honored unless presented within ten days from date.
"Des Moines, Iowa, Jan. 22, 1940
"Pay to the order of J. Elton Carter
"Three and 59/100 Dollars $3.59
"Value Received and Charge with exchange to Account of
"To: Taxpayers Research Bureau Des Moines, Iowa

With the application for injunction eliminated, the hearing in contempt proceedings began on December 26, 1940. At the trial some oral testimony was taken, including the testimony of Rockwell himself, but the evidence showed the facts as heretofore indicated; and there was very little dispute in the evidence as to the manner in which the operations were conducted. On January 4, 1941, the court entered judgment, finding that it had jurisdiction of the parties and subject matter and authority to punish for contempt, and that the testimony did not amount to the unauthorized practice of law, and denying plaintiffs' petition for contempt. Plaintiffs thereupon applied to this court for writ of certiorari, which was granted and writ issued, and the cause is now before us on such petition and record thereon. Question was made as to the form of proceedings in an action of this kind. We think that the proper proceeding against a person illegally and without authority practicing law is by contempt, and that it may also be by injunction, and we are satisfied that not only under the provisions of the Code of 1939, Section 12542, has the court the power to punish for contempt but that it may also do so under the inherent power of the court.

I. Section 12542 of the Code, in addition to the provisions mentioned in Section 12541, provides, [232 Iowa 628] "In addition to the above, any court of record may punish the following acts or omissions as contempts: * * * 2. Assuming to be an officer, attorney, or counselor of the court, and acting as such without authority. * * *" It has been held by the courts of practically every state where such question has arisen that unauthorized practice of law may be punished as contempt. See State ex rel. Wright v. Barlow, 131 Neb. 294, 268 N.W. 95; Id., 132 Neb. 166, 271 N.W. 282; State ex rel. Johnson v. Childe, 139 Neb. 91, 295 N.W. 381; State ex rel. Wright v. Hinckle, 137 Neb. 735, 291 N.W. 68; State ex rel. Hunter v. Daugherty, 136 Neb. 490, 286 N.W. 783; Danford v. Superior Court, 49 Cal.App. 303, 193 P. 272; People ex rel. Colorado Bar Ass'n v. Erbaugh, 42 Colo. 480, 94 P. 349; People ex rel. Colorado Bar Ass'n v. Ellis, 44 Colo. 176, 96 P. 783; People ex rel. Colorado Bar Ass'n v. Taylor, 56 Colo. 441, 138 P. 762; Anderson v. Coolin, 27 Idaho 334, 149 P. 286; In re Eastern Idaho Loan & Trust [5 N.W.2d 917] Co., 49 Idaho 280, 288 P. 157, 73 A.L.R. 1323; In re Brainard, 55 Idaho 153, 39 P. 2d 769; In re Bailey, 50 Mont. 365, 146 P. 1101, Ann.Cas.1917B, 1198; In re White, 54 Mont. 476, 171 P. 759; New Jersey Photo Eng. Co. v. Carl Schonert & Sons, Inc., 1923, 95 N.J.Eq. 12, 122 A. 307; Bowles v. United States, 4 Cir., 1931, 50 F.2d 848; People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901; People ex rel. Chicago Bar Ass'n v. Motorists' Ass'n of Illinois, 1933, 354 Ill. 595, 188 N.E. 827; Rhode Island Bar Ass'n v. Automobile Service Ass'n, 55 R.I. 122, 179 A. 139, 100 A.L.R. 226.

That there is also the remedy of injunction, see Johnson v. Purcell, 225 Iowa 1265, 282 N.W. 741; People ex rel. Illinois State Bar Ass'n v. People's Stock Yards State Bank, supra; State ex rel. Junior Bar Ass'n of Milwaukee v. Rice, 236 Wis. 38, 294 N.W. 550; Grand Rapids Bar Ass'n v. Denkema, 290 Mich. 56, 287 N.W. 377; Fitchette v. Taylor, 191 Minn. 582, 254 N.W. 910, 94 A.L.R. 356, and cases cited in note thereto.

Under the Constitution of Iowa, vesting judicial power exclusively in the courts, Article V, Section 1, and Section 12542 of the Code, the courts of this state are vested with complete authority to punish by contempt proceedings unlawful [232 Iowa...

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  • Bump v. Dist. Court of Polk Cnty., 45639.
    • United States
    • United States State Supreme Court of Iowa
    • October 27, 1942
    ...232 Iowa 6235 N.W.2d 914BUMP et al.v.DISTRICT COURT OF POLK COUNTY.No. 45639.Supreme Court of Iowa.Oct. 27, Appeal from District Court, Polk County; Loy Ladd, Judge. Petition for writ of certiorari to review the action of the District Court in proceeding for contempt, wherein the holding wa......

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