Cain v. Merchants Nat. Bank & Trust Co. of Fargo

• Citation: 66 N.D. 746,268 N.W. 719
• Decision Date: 29 July 1936
• Docket Number: No. 6409.,6409.
• Court: United States State Supreme Court of North Dakota
• Parties: CAIN et al. v. MERCHANTS NAT. BANK & TRUST CO. OF FARGO.

66 N.D. 746

268 N.W. 719

CAIN et al.

v.MERCHANTS NAT. BANK & TRUST CO. OF FARGO.

No. 6409.

Supreme Court of North Dakota.

July 29, 1936.

Syllabus by the Court.

1. Booklets and pamphlets distributed as advertising matter by the defendant examined, and are held not to constitute advertising by the defendant that it maintained an office for the practice of law.

2. The practice of law is not limited to the preparation of cases and their conduct in court. It includes legal advice and counsel and the drawing of instruments, when such instruments set forth, limit, terminate, claim, or grant legal rights.

3. One who is not a member of the bar may lawfully prepare instruments such as simple deeds, mortgages, promissory notes, and bills of sale when these instruments are incident to transactions in which such person is interested, provided no charge is made therefor.

4. Practice of law includes drawing for others complicated legal instruments such as wills and trust agreements which require more legal knowledge than is possessed by the average layman, even though such instruments may, to some extent, be incident to a business such as that usually conducted by trust companies.

5. One who has no right to practice law directly cannot do so indirectly by employing a licensed attorney to practice for him.

Appeal from District Court, Cass County; George M. McKenna, Judge.

Action by James P. Cain, as president, and Charles L. Foster, as vice president, of the Bar Association of North Dakota, an unincorporated association, for the benefit of themselves and all attorneys at law similarly situated, against the Merchants National Bank & Trust Company of Fargo, North Dakota, a national banking corporation. Judgment for defendant, and plaintiffs appeal.

Affirmed.

S. E. Ellsworth, of Jamestown, and Harry Lashkowitz, of Fargo, for appellants.

Nilles, Oehlert & Nilles, and George W. Thorp, all of Fargo, for respondent.

MORRIS, Judge.

[1] In this action the plaintiffs seek an injunction “permanently enjoining and restraining the said defendant, its officers, Agents, Directors and Attorneys from advertising that it maintains a Legal Department for the purpose of advising others and the Public generally in legal matters; from preparing for others deeds, mortgages, contracts and other papers that may be properly and legally drawn and prepared in the Practice of Law, that it be permanently enjoined and restrained from the Practice of Law, that it be permanently enjoined and restrained from the Practice of Law as defined by this Court in any and all of its particulars.” This appeal is taken from a judgment of the district court dismissing the action. The complaint contains the allegation that “for a period of three years or more the said defendant * * * has advertised and at this time continues to advertise that it maintains a department for giving legal advice to the public generally as to the preparation of wills, the creation of trusts, the probate and administration of estates of deceased persons and generally connected with the devise, descent, and succession to real and personal property and still continues so to do.” In support of this allegation the plaintiffs introduced in evidence five pamphlets or booklets which were distributed to the public at various times by the defendant in connection with the conduct of its business. Their contents may be summarized by stating that they contain general explanations of the desirability and usage of wills and trust agreements, and soliciting the selection of the defendant as executor or trustee. The plaintiffs contend that these pamphlets conveyed to the public the idea that the defendant maintains a department for giving legal advice, particularly with reference to the preparation of wills and the creation of trusts.

A trust company undoubtedly has the right to advertise the fact that it is qualified to act as executor or trustee, and to give advice concerning financial and business matters generally. The defendant, through the testimony of its officers, disclaims any right to practice law and denies that it has advertised or intended to advertise that it is qualified to give legal advice. There is nothing in this advertising, as shown by the record, which supports the plaintiffs' allegation. The booklet which plaintiffs most severely criticize, entitled “Safeguarding Your Family's Future,” deals with both wills and trusts. The statements therein contained can give the reader but a hazy idea of the nature of a trust, or of the procedure to be followed in probating an estate. No specific advice is offered in the booklet and no statement is made which would lead the reader to believe that a legal department was maintained by the defendant. On the other hand, it contains the specific admonition that “the will is a very important instrument and should be drawn by competent legal authority.” Three of the other pamphlets specifically refer to the advisability of employing a lawyer. When taken together, these pamphlets indicate an advertising policy on the part of the defendant which is complimentary to the legal profession, and are of such a nature as to have a tendency to impress upon the public the expediency of employing lawyers to draw such important documents as wills and trust agreements.

The appellants cite the case of In re Eastern Idaho Loan & Trust Company, 49 Idaho, 280, 288 P. 157, 158, 73 A.L.R. 1323. In that case the trust company advertised “we make a specialty of Drawing Contracts, Deeds and Mortgages.” It also advertised that “we make a business of advising in all such matters, and are specialists in drawing trust agreements, Declarations of trust and wills.” The advertising in that case frankly enters the field of practicing law, and the Idaho court so held. The advertising in this case is entirely different from that involved in the Idaho case. More in point here is the case of In re Umble's Estate, 117 Pa.Super. 15, 177 A. 340, in which advertisements similar to those here involved were held to be a legitimate presentation to the public of the service offered by a trust company and did not constitute advertising by the trust company that it maintained an office for the practice of law.

The plaintiffs further contend that the defendant has actually engaged in practicing law, over such a period of time and to such an extent as to warrant the issuance of an injunction, despite the protests of the defendant's officers that it has not practiced law intentionally and does not intendto practice law in the future. In support of this contention the plaintiffs introduced a large number of exhibits, the most important of which will be considered by groups and in connection with oral testimony concerning the various documents. The first group consists of three wills. Mr. F. L. Dwight, assistant trust officer of the defendant, is an attorney duly licensed to practice law in this state. He is not engaged in general practice, but with the permission of the defendant has sometimes acted as an attorney in personal matters, generally for friends when such matters did not interfere with his duties as an employee of the defendant.

The first will (Exhibit No. 85) is dated July 8, 1929. A previous will by the same testator had been deposited with the Merchants National Bank and in which the Merchants National Bank was named as executor. The defendant became the successor to the Merchants National Bank, and in order that the new corporation might be named as executor, Mr. Dwight redrafted the will. No charge was made for making the new will.

The next will (Exhibit No. 84), dated August 6, 1930, was drawn by Mr. Dwight for the testator, who was the janitor for the defendant. He became seriously ill and Mr. Dwight was called to the hospital to draw his will. A few hours after its execution, the testator died. The defendant was named as executor in the will. Mr. Dwight charged a fee for drawing it, which was paid by the estate.

The third will (Exhibit No. 88), dated December 19, 1930, was drawn by Mr. Dwight for a director of the defendant bank. A fee was paid for this service. Later this will was revised by an attorney not connected with the defendant.

In the two instances where compensation was paid, it was retained by Mr. Dwight personally. Testimony affirmatively shows that no wills have been drawn by the defendant, its officers or employees, since 1930.

The second group of seventeen exhibits consists of chattel mortgages, bills of sale, and crop contracts in which the defendant is not named as a party and which were prepared by the defendant, its officers, or employees. Most of them involve settlements in which the bank was interested. In some cases the instruments so prepared were pledged to the bank as collateral security. Exhibit 8 is an exception to the general statement of facts just made regarding this group of instruments. Exhibit 8 is a contract and crop mortgage between W. C. Probert, as lessor, and Seraphina L. Yunkers, as lessee. The defendant was executor of the estate of the lessee's deceased husband. The instrument secured the rental of a quarter of land by a mortgage on the 1930 crop. The rental was payable to the lessor or the defendant bank.

Another exception is Exhibit 21, which was a chattel mortgage from Christ Jorgensen to the Horace G. Russell estate, of which the defendant was administrator. Exhibit 22 is a chattel mortgage drawn by officers of the bank securing the purchase price of personal property sold at an auction sale at which officers of the defendant acted as clerks. Exhibit 62 represents a chattel mortgage drawn in 1932 between and for the accommodation of two of the bank's customers, and in which the bank appears to have had no interest.

The next group of eleven instruments consists of chattel mortgages in favor of the Argusville State Bank drawn by officers and employees of the defendant. The Argusville State Bank was in liquidation. Assets...