Commonwealth v. Jones & Robins, Inc.

• Decision Date: 04 March 1947
• Docket Number: Record No. 3155.
• Citation: 186 Va. 30
• Court: Virginia Supreme Court
• Parties: COMMONWEALTH OF VIRGINIA AND VIRGINIA STATE BAR v. JONES & ROBINS, INCORPORATED, ET AL.

Page 30

186 Va. 30

COMMONWEALTH OF VIRGINIA AND VIRGINIA STATE BAR v. JONES & ROBINS, INCORPORATED, ET AL.

Record No. 3155.

Supreme Court of Virginia, Richmond.

March 4, 1947.

Present, Holt, C.J., and Hudgins, Gregory, Eggleston, Spratley and Buchanan, JJ.

1. PARTIES — Unnecessary Parties — Harmless Error — Case at Bar. — In the instant case, a suit brought in the name of the Commonwealth of Virginia, at the instance of the Council of the Virginia State Bar, acting through the Third District Committee, and six named attorneys, "who sue on behalf of themselves and all other licensed attornews of the Bar of the Third District and of the Bar of the Commonwealth of Virginia," objection was raised on the ground that complainants were not authorized to bring the bill on behalf of all other licensed attorneys of the Third District of the Commonwealth of Virginia. The Virginia State Bar is an organization fully authorized to institute suits.

Held: That since the Virginia State Bar was the complainant and conducted the litigation in the name of the Commonwealth, there was no reversible error in the fact that unnecessary parties were named as complainants.

2. ATTORNEY AND CLIENT — Right to Practice Law — What Constitutes Practicing Law — Real Estate Brokers Drawing Deeds, Deeds of Trust, Mortgages and Deeds of Release. — The preparation of deeds, deeds of trust, mortgages and deeds of release by real estate brokers constitutes the illegal practice of law.

3. ATTORNEY AND CLIENT — Right to Practice Law — What Constitutes Practicing Law — Real Estate Brokers Drawing Deeds, Deeds of Trust, Mortgages and Deeds of Release — Case at Bar. — The instant case was a suit brought at the instance of the Virginia State Bar against defendants, a corporation engaged in the real estate brokerage business. It was shown that defendant habitually prepared deeds, deeds of trust, mortgages and deeds of release in connection with the sale of real estate and the closing of real estate loans negotiated through the brokerage office, and it was contended that defendant was engaged in the illegal practice of law in violation of the Rules for Integration of the Virginia State Bar adopted and promulgated by the Supreme Court of Appeals, which provide that one is deemed to be practicing law whenever "One, other than as a regular employee acting for his employer, undertakes, with or without compensation, to prepare for another legal instruments of any character, other than notices or contracts incident to the regular course of conducting a licensed business." The trial court held that the definition of "practicing law" by implication permits a relator to draw contracts incident to the regular course of his business; that deeds of bargain and sale, release deeds and deeds of trust are contracts, within the meaning of the definition; and that if the preparation of such instruments is in connection with a sale which a licensed realtor has negotiated, then these instruments were "incident to the regular course" of his business and may be prepared by him.

Held: Error.

Appeal from a decree of the Law and Equity Court of the city of Richmond. Hon. Willis D. Miller, judge presiding.

The opinion states the case.

Abram P. Staples, Attorney General, Ralph T. Catterall and John G. May, Jr., for the appellants.

Tucker, Mays, Cabell & Moore and Hunton, Williams, Anderson, Gay & Moore, for the appellees.

HUDGINS, J., delivered the opinion of the court.

The Commonwealth of Virginia, at the instance of the Council of the Virginia State Bar, instituted this suit, alleging that Jones & Robins, Inc., a corporation engaged in the real estate brokerage business, habitually prepared deeds, deeds of trust, mortgages and deeds of release — for which a minimum fee of $5.00 each was charged — in connection with the sale of real estate and the closing of real estate loans negotiated through the brokerage office; and that to that extent the brokerage firm was engaged in the illegal practice of law. The prayer of the bill was for a judgment declaring such activities to be within the definition of the practice of law and for a permanent injunction prohibiting respondent from engaging in such practices.

Respondent, in its answer, admitted that it was licensed to conduct, and was engaged in, the real estate brokerage business; that, as an incident to the sale of real estate and the making of loans, it regularly prepared deeds, deeds of trust, mortgages and deeds of release, for which it charged the fees alleged; and that it intended to continue such activities "unless it is prevented from so doing by the action of some court of competent jurisdiction."

The Virginia Real Estate Association, a voluntary unincorporated body, organized and operating under a constitution and by-laws, was permitted to become a party defendant to the suit.

The first objection raised to the bill is that complainants are not authorized to bring this bill of complaint on behalf of "all other licensed attorneys of the Third District and of the Commonwealth of Virginia."

The suit was brought in the name of "The Commonwealth of Virginia, at the instance of the Council of Virginia State Bar, acting through the Third District Committee," and six named attorneys, "who sue on behalf of themselves and all other licensed attorneys of the Bar of the Third District and of the Bar of the Commonwealth of Virginia." The Virginia State Bar is an organization fully authorized to institute suits and other proceedings it deems necessary to enforce the rules and regulations of the integrated bar. As the Virginia State Bar was a complainant and conducted the litigation in the name of the Commonwealth of Virginia, we find no reversible error in the fact that unnecessary parties were named as complainants.

The dominant question presented is whether the preparation of deeds, deeds of trust, mortgages and deeds of release by duly licensed real estate brokers, in connection with the sale of real estate or the closing of real estate loans negotiated through the brokers' offices, constitutes the practice of law within this jurisdiction.

Prior to 1938, no official attempt had been made to formulate an all-inclusive definition of the practice of law. This fact did not prevent this court from declaring that certain acts or practices, stated in Richmond Ass'n of Credit Men Bar Ass'n, 167 Va. 327, 189 S.E. 153, constituted the illegal practice of law. It was held, in that case and in Norfolk, etc., Bar Ass'n Drewry, 161 Va. 833, 172 S.E. 282, that, inasmuch as an attorney is an officer of the court in the administration of justice, the court has inherent power to supervise his conduct, both in and out of court, to the extent of reprimanding him or even removing him from office for misconduct. It was said that the phrase, "practicing law," or its equivalent, "the practice of law," had a sufficiently definite meaning to be understood in both constitutional and statutory law without further definition. In the former case Mr. Justice Eggleston, speaking for the court at page 335, declared "that the courts have the inherent power, apart from statute, to inquire into the conduct of any person — whether an individual, a law agency, or a corporation — to determine whether he or it is usurping the functions of an officer of the court and illegally engaging in the practice of law and to put an end to such unauthorized practice where found to exist."

Since the publication of the decision in the two cases cited, the practice of law in Virginia has been defined. See 171 Va. xvii.^* That part of the definition pertinent to the question under consideration reads:

"The relation of attorney and client is direct and personal, and a person, natural or artificial, who undertakes the duties and responsibilities of any attorney is none the less practicing law though such person may employ others to whom may be committed the actual performance of such duties.

"The gravity of the consequences to society resulting from abuses of this relation demands that those assuming to advise or to represent others shall be properly trained and eduated, and be subject to a peculiar discipline. That fact, and the necessity for protection of society in its affairs and in the ordered proceedings of its tribunals, have developed the principles which serve to define the practice of law.

"Generally, the relation of attorney and client exists, and one is deemed to be practicing law, whenever he furnishes to another advice or service under circumstances which imply his possession and use of legal knowledge or skill.

"Specifically, the relation of attorney and client exists, and one is deemed to be practicing law, whenever —

"(1) One undertakes for compensation, direct or indirect, to advise another, not his regular employer, in any matter involving the application of legal principles to facts or purposes or desires.

"(2) One, other than as a regular employee acting for his employer, undertakes, with or without compensation, to prepare for another legal instruments of any character, other than notices or contracts incident to the regular course of conducting a licensed business.

"(3) One undertakes, with or without compensation, to represent the interest of another before any tribunal, — judicial, administrative, or executive, — otherwise than in the presentation of facts, figures, or factual conclusions, as distinguished from legal conclusions, by an employee regularly and bona fide employed on a salary basis, or by one specially employed as an expert in respect to such facts and figures when such presentation by such employee or expert does not involve the examination of witnesses or preparation of pleadings."

"Generally, the relation of attorney and client exists, and one is deemed to be practicing law, whenever he furnishes to another advice or service under circumstances which imply his possession and use of legal knowledge or skill.

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