Depew v. Wichita Ass'n of Credit Men Inc.

• Decision Date: 05 October 1935
• Docket Number: 32412.,31999
• Citation: 49 P.2d 1041,142 Kan. 403
• Parties: DEPEW et al. v. WICHITA ASS'N OF CREDIT MEN, Inc., et al. STATE ex rel. BECK, Atty. Gen., v. SAME.
• Court: Kansas Supreme Court

49 P.2d 1041

142 Kan. 403

DEPEW et al. v. WICHITA ASS'N OF CREDIT MEN, Inc., et al.

STATE ex rel. BECK, Atty. Gen., v. SAME.

Nos. 31999, 32412.

Supreme Court of Kansas

October 5, 1935

Rehearing Denied Nov. 16, 1935.

Syllabus by the Court.

Statute relating to qualifications and admission of attorneys to practice law held not unconstitutional as denying due process or equal protection, as impairing obligation of contract, as granting special privileges, or as denying liberty of speech (Rev. St. 1923, 7-- 102; Const. U.S. art. 1, § 10; Amends. 5 14; Const. Kan. Bill of Rights, §§ 2, 11).

One who confers with clients, advises them as to their legal rights and then takes business to attorney and arranges with him to look after it in court, is engaged in "practice of law."

Injunction restraining corporation and employees from bringing collection actions in justice of peace court, and signing bills of particular as agent of plaintiffs, and filing intervening petitions in district court, held proper notwithstanding promise of corporation and its officers that such acts would not be done in future.

Illegal practice of law by corporation would not necessitate forfeiture of charter where charter contained provisions which would fully justify its retention for performance of legal and proper purposes.

Practice in connection with bankruptcy proceedings in federal court should have been included in injunction restraining illegal practice of law.

Actions of corporation and manager in bringing collection actions in justice of peace court and signing bills of particular as agent of plaintiffs and filing intervening petitions in district court, in handling accounts for collection by turning them over to attorneys and retaining portion of fees soliciting proofs of claims and powers of attorney in bankruptcy proceedings and participating in election for trustees, and in giving legal advice and services in connection with liquidation of businesses, held enjoinable as "practicing law."

1. R. S. 7--102, having reference to the qualifications and admission of attorneys to practice law in the state of Kansas, is not unconstitutional and in violation of the Fifth or Fourteenth Amendments thereto, nor in violation of section 10, article 1 of the United States Constitution nor section 2 of the Bill of Rights of the Constitution of the state of Kansas.

2. The general definition of the term "practicing law," as given in State ex rel. v. Perkins, 138 Kan. 899, 28 P.2d 765, approved and followed.

3. The acts, transactions, and conduct enumerated and described in findings of fact Nos. 3, 4, 5, and 6 of the trial court, as set out and copied in this opinion, are held to be within the term "practicing law," and are not within the authorized powers under the charter granted one of the defendants herein, and would not be effective for a corporation if they were included therein.

Appeal from District Court, Sedgwick County, Division No. 3; Grover Pierpont, Judge.

Action by Claude I. Depew and others, on behalf of themselves and all other practicing attorneys of Sedgwick County, against the Wichita Association of Credit Men, Incorporated, and another. From a judgment for plaintiffs, defendants appeal, and plaintiffs cross-appeal on adverse rulings. By stipulation, action was considered for purposes of appeal together with original proceeding in quo warranto by the State, on the relation of Clarence V. Beck, Attorney General, against the same defendants.

Fred Hinkle, of Wichita, and W. L. Cunningham, of Arkansas City, for appellants.

H. W. Hart, George Siefkin, and Austin M. Cowan, all of Wichita, for appellees.

Clarence V. Beck, Atty. Gen., for the State.

HUTCHISON Justice.

We have here two cases involving the same subject-matter that by stipulation are to be considered together. One comes to this court by appeal, and the other is an action in quo warranto brought originally in this court on relation of the Attorney General of the state.

The first case is an injunction action commenced in the district court of Sedgwickcounty by Claude I. Depew and eight other members of the bar of Sedgwick county and members of the Sedgwick County Bar Association, on behalf of themselves and all other practicing attorneys of Sedgwick county, to restrain and enjoin the defendants from the illegal practice of the law. The defendants are the same in both cases, being the Wichita Association of Credit Men, Inc., and M. E. Garrison. The injunction case was commenced by filing the petition therein on July 12, 1933. It was tried in the Third division of the district court of Sedgwick county commencing on May 17, 1934, and judgment was rendered therein in favor of the plaintiffs and injunction was granted February 13, 1935, from which judgment an appeal was regularly taken by both defendants, and a cross-appeal was also taken by the plaintiffs upon rulings adverse to them.

The quo warranto case was filed in this court on May 3, 1934, just a few days before the commencement of the hearing of the evidence in the injunction case in the district court. A stipulation has been filed permitting the evidence in the injunction case to be considered as evidence in the quo warranto case. Depositions were also taken and filed in the quo warranto case.

Appropriate answers of general and special denial were filed by the defendants in both cases. Findings of fact and conclusions of law were requested by both parties to be made in the injunction case and were made, and an injunction order was made against the defendants restraining and enjoining them and their agents from doing or performing certain acts held by the findings and conclusions to be practice of law, but was not allowed as to some other acts of which the plaintiffs complained.

The main legal questions involved in the injunction action, as stated by the appellants, are: (1) What is practicing law, and (2) What acts or business of defendants, or either of them, come within the term "practicing law," and which do not?

In the review of this injunction case we are not confronted with the question of the jurisdiction of the district court in matters of unlawful practice of law, as we were in a similar case brought by the same plaintiffs against the Wichita Retail Credit Association, appealed to this court and opinion reported in 141 Kan. 481, 42 P.2d 214, nor the questions as to injunction being the proper remedy and the right of the plaintiffs to maintain such an action, because on review of the injunction case at bar we have the quo warranto case associated with it and the two are being considered together.

The main questions involved in the quo warranto case, as claimed by the appellants, are:

1. What is the true scope of the charter powers granted to defendant association, by its charter?

2. Are these powers within the authorized purposes of the charter act?

Two preliminary legal questions applicable to both cases are presented by the appellants. The first one is that the matter of defining the term "practicing law" and prescribing the qualifications of those entitled to do so is a legislative function and not judicial, citing R. S. 7--102 as the only legislative expression as to who shall be admitted to practice law and their qualifications and that the Legislature at no time has attempted to define the term "practicing law."

R. S. 7--102 is as follows: "Any citizen of the United States who has read law for three years in the office of a regularly practicing attorney, or who shall be a regular grauduate of the law department of the university of Kansas or some other law school of equal requirements and reputation, and who satisfies the supreme court of this state that he possesses the requisite ability and learning and that he is of good moral character, may be admitted to practice in all the courts of this state upon taking the oath prescribed."

Such statutory regulation is effective and directory when in accord with the inherent power of the judiciary because of the licensees being officers of the court. In re Casebier, 129 Kan. 853, 284 P. 611; In re Hanson, 134 Kan. 165, 5 P.2d 1088; State ex rel. v. Perkins, 138 Kan. 899, 28 P.2d 765. Of course a subsequent session of the Legislature could repeal or amend such section, and could also, with due regard to such inherent power as to the qualifications and conduct of those authorized to appear before the court as officers thereof, very helpfully define what is meant by the term practicing law. But no such definition has been given us by our Legislature, and it is therefore a question for construction as to the intent of the Legislature. "The proper construction of a statute is a question for the court." 59 C. J. 944.

The other preliminary legal question urged by the appellants is that to deny these defendants by statute, or construction thereof, or both, of the right and privilege to carry on and transact the business which the evidence shows them to be carrying on and transacting, would be to deny them the rights, privileges, and immunities guaranteed to them by the Constitution of the United States, particularly the Fifth and Fourteenth Amendments thereto (depriving of life, liberty, or property without due process of law, and equal protection of the law), would also be in violation of section 10, article 1 of the United States Constitution (by impairing the obligation of a contract), and also in violation of section 2 of the Bill of Rights of the Constitution of the state of Kansas (by granting special privileges) and section 11 of the Bill of Rights of the Constitution of the state of Kansas (by depriving them of liberty of speech). We are not cited to any Kansas authority in support of this proposition.

We recall...