Chicago Bar Ass'n v. Quinlan & Tyson, Inc.

• Citation: 53 Ill.App.2d 388,203 N.E.2d 131
• Decision Date: 30 November 1964
• Docket Number: Gen. No. 49127
• Parties: The CHICAGO BAR ASSOCIATION, an illinois Corporation not for profit, Curtis F. Prangley, Stuart C. Abbey, Mandel L. Anixter, John Ligtenberg, John T. Love, Jacob H. Martin and John C. Menk, Plaintiffs-Appellants-Cross-Appellees, v. QUINLAN AND TYSON, INC., an illinois Corporation, Defendant-Appellee-Cross-Appellant.
• Court: United States Appellate Court of Illinois

Page 131

203 N.E.2d 131

53 Ill.App.2d 388

The CHICAGO BAR ASSOCIATION, an illinois Corporation not for

profit, Curtis F. Prangley, Stuart C. Abbey, Mandel L.

Anixter, John Ligtenberg, John T. Love, Jacob H. Martin and John C. Menk, Plaintiffs-Appellants-Cross-Appellees, v. QUINLAN AND TYSON, INC., an illinois Corporation,

Defendant-Appellee-Cross-Appellant.

Gen. No. 49127.

Appellate Court of Illinois, First District, First Division.

Nov. 30, 1964.

J. R. Christianson, William S. Kaplan, Richard L. Kahn, Chicago, for plaintiffs-appellants.

Kirkland, Ellis, Hodson, Chaffetz & Masters, Chicago, Richard B. Allen, Chicago, amici curiae.

Cummings & Wyman, Chicago, for defendant; Austin L. Wyman, Kurt W. Teuthorn, Chicago, of counsel.

BURMAN, Justice.

The Chicago Bar Association, a not-forprofit Illinois corporation and seven duly licensed attorneys at law, members of the Association's Committee on Unauthorized Practice of Law, seek to enjoin the defendant, Quinlan and Tyson, Inc., a real estate brokerage firm incorporated under the laws of Illinois, from engaging in activities alleged to be the unauthorized practice of law.

In substance the plaintiff's complaint charged, that among other things, the following services rendered by defendant constitute such unauthorized practice: preparation of offers to purchase and contracts for the purchase or sale of real estate; preparation of deeds of conveyance; providing legal advice and supervision concerning the closing of real estate transactions; preparation of instruments necessary to clear title to real estate; and the examination of title papers and giving of advice concerning the status and validity of title. The complaint also charged, that the defendant's real estate management and mortgage business involved the unauthorized practice of law, but the plaintiffs subsequently withdrew these charges. The defendant's answer, as amended, admitted that it performed all the services mentioned except the giving of legal advice, but denied that the services constituted the practice of law.

Requests by the Chicago Real Estate Board, the Evanston-North Shore Board of Realtors, the Building Managers Association of Chicago and the Illinois Association of Real Estate Boards to intervene were denied by the chancellor, but permission was granted to them to appear as amici curiae. In this court we granted leave to the Illinois State Bar Association to appear as amicus curiae and to file briefs in support of the action commenced by the Chicago Bar Association, and we also granted leave to the Chicago Real Estate Board, the Evanston-North Shore Board of Realtors and the Illinois Association of Real Estate Boards to appear as amici curiae and briefs were filed in their behalf.

In the trial court the matter was referred to a James C. Leaton, Master in Chancery, who heard testimony covering 1600 pages and received almost 200 exhibits. The Master found and concluded that the completion of the contract of sale forms, including insertions, deletions and riders, was a service for others which set forth the legal rights and liabilities of the parties and required legal skill and knowledge. The Master also found that the completion of forms by defendant, subsequent to the execution of contracts of sale, such as escrow agreements, installment contracts, mortgages and deeds, as shown by the exhibits, was also a service for others which set the legal rights and liabilities of the parties and affected title to real estate. The Master further concluded that all of the services mentioned were not in any legal sense incidental to the defendant's business as a real estate broker and that they constituted unauthorized practice of law. Finally the Master recommended that a decree be granted, permanently restraining and enjoining the defendant, its agents and employees from giving legal counsel and advice, rendering legal opinions and preparing, drafting or construing certain legal documents connected with the purchase and sale of real estate.

The Chancellor affirmed the findings and conclusions of the Master except with respect to preparation of the initial sales contract. The decree of the Chancellor provides: 'As a necessary incident to the transaction of its real estate brokerage business the Defendant when it is engaged as a broker by either the seller or the buyer of real estate may prepare offers to purchase or sell and contracts to purchase or sell, and procure signatures thereto, provided' (and we summarize)

(a) The contracts to be filled in are contracts customarily used in the defendant's community;

(b) No additions are made in the form except those commonly made in supplying factual and business details pertinent to the transaction; no deletions are made in the form except those involving the elimination of factual and business details not pertinent to the transaction.

The decree further recited that though the filling in of initial contract form as indicated above does not constitute the practice of law, the defendant 'may not undertake to explain to its principal or other third parties the legal effect of the provisions in the form' nor 'advise its principal or other third parties in the matter of choices which may create, enhance or diminish gain or loss to the buyer or seller' including but not limited to advice concerning whether title should be taken individually, in trust, or in joint tenancy or whether the payments should be in installments.

The decree finally provided that after obtaining the signatures of the parties on the contract form, the defendant may not prepare subsequent documents in the real estate transaction because such preparation constitutes the practice of law.

The plaintiffs appeal from that part of the decree which permits the defendant to fill in the blanks of the initial contract and the defendant has cross-appealed from that part of the decree which prohibits it from preparing subsequent documents and from explaining to its principals the effect of the provisions in any form of documents used in connection with property transfer.

The briefs submitted here by the parties and by amici curiae have been very helpful to the court. The massive amount of work which was obviously devoted to the briefs caused every issue to be brought before us in a clear and well argued manner.

Plaintiffs admit that the defendant is a reputable real estate broker. They make no charge of lack of technical competence, overreaching, negligence, or practice of law in any field other than the preparation of documents required in real estate sales, in which the defendant acts as a broker, and where it charges no fee other than the brokerage commission to which it is entitled under its contract of employment. Hence the issue for determination is whether the defendant is engaged in the unauthorized practice of law when, in the course of its activities as a real estate broker, it prepares for others, without compensation, any or all of the documents in question.

The power to determine who may and who may not be permitted to practice law in this state is vested exclusively in the judiciary. The question was squarely presented in the case of In re Day, 181 Ill. 73, 54 N.E. 646, 50 L.R.A. 519 (1899) in which the Supreme Court said:

'That power [to pass upon the learning and fitness to practice law] belongs to the court by virtue of its being a court of justice, and one of the departments of state into which, under the constitution, the power falls. Without such power by which the courts can protect themselves against ignorance and want of skill, they cannot properly administer justice.' (181 Ill. at 94, 54 N.E. at 652)

This principle has been consistently followed in subsequent cases on unauthorized practice and is a basic principle of our jurisprudence. People ex rel. Illinois State Bar Ass'n v. Peoples Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901 (1931); People ex rel. Chicago Bar Ass'n v. Chicago Motor Club, 362 Ill. 50, 199 N.E. 1 (1935); People ex rel. Chicago Bar Ass'n v. Goodman, 366 Ill. 346, 8 N.E.2d 941, 111 A.L.R. 1 (1937); People ex rel. Illinois State Bar Ass'n v. Schafer, 404 Ill. 45, 87 N.E.2d 773 (1949). The power to regulate those whom the court has sanctioned includes the duty to punish those who seek to practice law without the authorization of the judicial department. People ex rel. Illinois State Bar Ass'n v. Peoples Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901 (1931). The power of the court to inquire into the unauthorized practice of law is not limited to those acts which are performed before it, but extends to such unauthorized conduct and services of legal nature which are performed outside of the courts, including the giving of advice, counseling, drafting of legal documents and participation in transactions which are outside the scope of the actual litigation of a cause in the courts. People ex rel. Chicago Bar Ass'n. v. Tinkoff, 399 Ill. 282, 77 N.E.2d 693 (1948).

The public interest must be the guiding principle for this court in deciding this case. The reason underlying this principle was well expressed in People ex rel. Chicago Bar Ass'n v. Goodman, 366 Ill. 346, 8 N.E.2d 941, 111 A.L.R. 1 (1937).

'In modern times the affairs of the people requiring the services of a lawyer have become more intricate and complex, demanding a corresponding increase in the standards of the profession through preliminary education and a lengthened and more diversified course of study by those who would engage in the practice. * * * These prerequisites are not for the purpose of creating a monopoly in the legal profession nor for its protection, but are for the better security of the people against incompetency and dishonesty.' (366 Ill. at 350, 8 N.E.2d at 944)

Though the Goodman case involved a prosecution for the handling and adjusting of workmen's compensation claims before administrative bodies at a time when administrative law was not yet...