Detroit Bar Ass'n v. Union Guardian Trust Co.

• Citation: 276 N.W. 365,282 Mich. 216
• Decision Date: 15 December 1937
• Docket Number: No. 5.,5.
• Parties: DETROIT BAR ASS'N et al. v. UNION GUARDIAN TRUST CO.
• Court: Supreme Court of Michigan

282 Mich. 216

276 N.W. 365

DETROIT BAR ASS'N et al.

v.UNION GUARDIAN TRUST CO.

No. 5.

Supreme Court of Michigan.

Oct. 4, 1937.

Rehearing Denied Dec. 15, 1937.

Suit by the Detroit Bar Association and others against the Union Guardian Trust Company for an injunction. From a decree granting injunctive relief, each party appeals.

Modified.

Appeal from Circuit Court, Wayne County, in Chancery; Allan Campbell, judge.

Argued before the Entire Bench.

George E. Brand, Ezra H. Frye, and Ben O. Shepherd, all of Detroit, for plaintiffs.

Shaeffer & Dahling, of Detroit, for defendant.

NORTH, Justice.

This is an injunction suit wherein plaintiffs seek to enjoin alleged unauthorized or unlawful practice of law by the defendant trust company, a Michigan corporation. From a decree granting injunctive relief each party has appealed.

Concededly the defendant corporation is not licensed to practice law. Instead it is specifically prohibited by statute from doing so. In part the statute reads: ‘It shall be unlawful for any corporation or voluntary association to practice or appear as an attorney-at-law for any person other than itself in any court in this state or before any judicial body, or to make it a business to practice as an attorney-at-law, for any person other than itself, in any of said courts or to hold itself out to the public as being entitled to practice law, or render or furnish legal services or advice, or to furnish attorneys or counsel or to render legal services of any kind in actions or proceedings of any nature or in any other way or manner, or in any other manner to assume to be entitled to practice law. * * * The fact that such officer, trustee, director, agent or employee [of the corporation] shall be a duly and regularly admitted attorney-at-law shall not be held to permit or allow any such corporation or voluntary association to do the acts prohibited herein. * * * This section shall not apply to any corporation or voluntary association lawfully engaged in a business authorized by the provisions of any existing statute. * * * But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state nor to solicit directly or indirectly professional employment for a lawyer.’ 2 Comp.Laws 1929, § 10175.

Adjudication of the issues presented in the instant case is rendered difficult because of the lack of an exact definition of what constitutes the practice of law. In their brief plaintiffs say: ‘The determination as to what constitutes ‘practice of law’ is regarded as a judicial function. Even if possible, it is not practical nor advisable to attempt specific definition of ‘practice of law.’ The few efforts to do so have added little to general characterization.'

The Supreme Court of Rhode Island has said: ‘Authority to admit to the bar and to disbar necessarily carries with it power to define what constitutes the practice of the law, and to exclude unauthorized persons therefrom.’ R. I. Bar Asso. v. Automobile Service Asso., 55 R.I. 122, 179 A. 139, 142, 100 A.L.R. 226. See, also, Richmond Ass'n of Credit Men v. Bar Ass'n, 167 Va. 327, 189 S.E. 153;Depew v. Wichita Association of Credit Men, 142 Kan. 403, 49 P.2d 1041;Creditors' Service Corporation v. Cummings (R.I.) 190 A. 2.

‘The practice of law is difficult to define. Perhaps it does not admit of exact definition. * * * That the practice of the law is a special field reserved to lawyers duly licensed by the court, no one denies.’ R. I. Bar Asso. v. Automobile Service Asso., supra.

‘It would be difficult to give an all inclusive definition of the practice of law, and we will not attempt to do so.’ Clark v. Austin (Mo.Sup.) 101 S.W.2d 977, 982.

‘This court and other courts have always been reluctant to adopt an all-inclusive definition of the term ‘practice of law.” People, ex rel. Chicago Bar Ass'n v. Goodman, 366 Ill. 346, 8 N.E.2d 941, 944.

As bearing somewhat upon this phase of the instant case, it may be noted that in a decision involving illegal practice of law we have said:

‘In a case in court, determination of the steps to be taken and control of procedure and proceedings to enforce the remedy are exclusive functions of an attorney-at-law, where a party does not appear in his own person. 6 C.J. 643. * * *

‘The rights and duties arising out of the relationship of attorney and client are not measured by the yardstick of commercial or trade transactions. The relation is purely personal. The lawyer owes to his client undivided allegiance. There is no place in the relationship for its establishment by a middleman, having an interest in the res or control of the procedure.’ Hightower v. Detroit Edison Co., 262 Mich. 1, 247 N.W. 97, 100, 86 A.L.R. 509.

Without giving full sanction thereto, it may be noted that other courts have expressed much broader views as to what constitutes the practice of law.

‘Counsel and advice, the drawing of agreements, the organization of corporations and preparing papers connected therewith, the drafting of legal documents of all kinds, including wills, are activities which have long been classed as law practice.’ People v. Alfani, 227 N.Y. 334, 125 N.E. 671, 673.

‘Practice of law under modern conditions consists in no small part of work performed outside of any court and having no immediate relation to proceedings in court. It embraces conveyancing, the giving of legal advice on a large variety of subjects, and the preparation and execution of legal instruments covering an extensive field of business and trust relations and other affairs. Although these transactions may have no direct connection with court proceedings, they are always subject to become involved in litigation.’ Opinion of the Justices, to the Senate, 289 Mass. 607, 194 N.E. 313, 317.

‘It is too obvious for discussion that the practice of law is not limited to the conduct of cases in courts. According to the generally understood definition of the practice of law in this country, it embraces the preparation of pleadings, and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts, and, in addition, conveyancing, the preparation of legal instruments of all kinds, and, in general, all advice to clients, and all action taken for them in matters connected with the law. An attorney at law is one who engages in any of these branches of the practice of law.’ In re Duncan, 83 S.C. 186, 65 S.E. 210, 211,24 L.R.A.(N.S.) 750,18 Ann.Cas. 657.

We turn now to the specific questions presented in the instant case. Counsel stipulated that three issues were presented to the trial court for adjudication. We quote and consider them in order.

I. ‘That it is illegal for the defendant trust company to draft or have drafted by its attorneys or attorney or others selected or paid by it therefor, any will or proposed form, outline or suggestion thereof.’

Formerely defendant had actively engaged in the business of drafting wills. Many of such transactions were the result of defendant's systematic solicitation of business of this character. But this phase of defendant's activities had been wholly discontinued before this suit was instituted, and counsel for the respective parties agreed that plaintiffs might take a decree with appropriate injunctive provisions. That portion of the decree reads:

‘Defendant Union Guardian Trust Company is hereby permanently enjoined and restrained from:

‘(a) drafting, or having drafted for others by its attorneys or attorney or others selected or paid by it therefor, any will * * * or proposed form or outline thereof intended for individual use.’

There being no appeal from this phase of the decree, it is affirmed. Such is the holding in many other jurisdictions.

‘Corporations cannot practice law. ‘Practice of the law’ is not limited to practice before the courts. * * * But under all attempted definitions, it includes the drafting of documents which of necessity must be presented to, and their legality passed upon by, the courts.

‘We think the drawing of wills, as a practice, is the practice of law, and this for three reasons; First, because of the profound legal knowledge necessary for one who makes a practice of this work; second, because all these instruments, before they become effective, must be filed in and administered by a court; and, third, because what we consider the weight of authority so holds.’ People ex rel. Committee on Grievances of Colorado Bar Ass'n v. Denver Clearing House Banks, 99 Colo. 50, 59 P.2d 468, 469.

As to the practice of drafting wills by corporations or laymen constituting unauthorized practice of law, see People v. People's Trust Co., 180 App.Div. 494, 167 N.Y.S. 767;In re Eastern Idaho Loan & Trust Co., 49 Idaho 280, 288 P. 157, 73 A.L.R. 1323;People ex rel. v. People's Stock Yards State Bank, 344 Ill. 462, 176 N.E. 901;State ex inf. Miller v. St. L. Union Trust Co., 335 Mo. 845, 74 S.W.2d 348.

II. The second issue presented to the trial court was: ‘That it is illegal for the defendant trust company to draft or have drafted by its attorneys or attorney or others selected or paid by it therefor, any trust agreement or proposed form, outline or suggestion thereof in which defendant either has no personal interest or under which said defendant acts or is to act as a fiduciary.’ The decree in the circuit court contained the same injunctive provision as to drafting trust agreements by defendant as that just above quoted pertaining to wills. The defendant contends this was error.

Plaintiffs' position is indicated by the following statement in their brief: ‘However, every argument against trust company drafting of wills is equally applicable to trust company drafting of trust agreements for prospective trustors.’

On the other hand, defendant denies it is engaged in unauthorized practice of law and, as stated in its brief: ‘Defendant asserts...