Fink v. Peden

• Decision Date: 31 October 1938
• Docket Number: 27085.
• Citation: 17 N.E.2d 95,214 Ind. 584
• Parties: FINK et al. v. PEDEN.
• Court: Indiana Supreme Court

17 N.E.2d 95

214 Ind. 584

FINK et al. v. PEDEN.

No. 27085.

Supreme Court of Indiana

October 31, 1938

Little, Little & Horn, Kane, Blain &amp Hollowell, and Paul Rhoadarmer, Guardian ad litem, all of Indianapolis, for appellants.

James W. Ingles, Isaac Carter, and Harry F. Rust, all of Indianapolis (Henry E. White, of Franklin, of counsel), for appellee.

TREMAIN Judge.

The appellee recovered judgment against the appellants for services rendered in procuring the settlement of a claim against the Pennsylvania Railroad Company on account of the death of an employee, Ralph Fink, husband of appellant Louise Fink, and father of five minor children, also appellants.

A trial of appellee's claim was had by the court in which special findings of fact were made, in substance as follows:

Ralph Fink, an employee of the Pennsylvania Railroad Company, was killed July 2, 1928, under circumstances that gave rise to a claim against the railroad company. He was survived by a widow and five minor children. Thereafter, in the same month appellee who had theretofore been a claim agent for the New York Central Railroad Company, and at the time was a claim agent for an insurance company and familiar with presentation of claims of that nature, undertook to negotiate a settlement with the railroad company for and upon behalf of the widow and minor children. He was not an attorney at law, and, in the performance of such services, did not pretend to practice law. He was a distant relative of the widow, but his services were not rendered gratuitously. Both he and the widow understood that he was to be paid a reasonable sum for services rendered. He made an investigation of the facts and, from time to time, negotiated with officials of the railroad company until an agreement was effected, whereby the company agreed to pay to the widow and children the sum of $7,500 and the further sum of $500 for funeral expenses.

Thereafter, on January 22, 1929, the widow qualified as administratrix of her husband's estate for the sole purpose of settling with the railroad company. She filed a petition in court for authority to make the settlement. Her petition was granted and the settlement was consummated. On February 16, 1929, administratrix filed a final report distributing the amount recovered from the railroad company and showing that the decedent was the owner of no other property. The report was approved and the administratrix was discharged. In the meantime she qualified as guardian of her children and, of the sum collected, paid to herself as guardian $5,000, and retained $2,500 as her individual property. The appellee had no knowledge of these proceedings. The administratrix proceeded under Sec. 6-1407, Burns' Ind.St.1933, Sec. 3212, Baldwin's Ind.St.1934, and gave no notice of her appointment or her final report. The settlement was made with the railroad company as a result of the efforts of the appellee. The appellee rendered necessary services which were beneficial to the estate and were a proper charge as part of the expense of the administration; that the reasonable value of such services was $1,125; that the widow knew, at the time of her appointment, that the appellee had a just claim against the funds coming into her hands as administratrix and intentionally refrained from communicating with appellee; that she made distribution to the heirs and did all other acts for the purpose of defrauding appellee.

Upon the facts found the court concluded that the final report should be set aside and the estate reopened, and appellee should recover the sum of $1,125 for services rendered; that the $7,500 should be impressed with an equitable lien in favor of appellee for the amount due to him, superior to the claim of the widow and children; that appellee should recover from the widow $375 and from the children $750. Judgment was rendered accordingly.

Each defendant excepted to the conclusions of law and filed motions for a venire de novo and for a new trial, which were overruled, from which rulings this appeal is perfected.

The court found and the appellee admitted that he was not an attorney at law admitted to practice in this state. In representing the widow in the presentation of the claim to the railroad company for damages on account of her husband's death, the question arises: Did appellee 'engage in the business of a practicing lawyer' as defined by Sec. 4-3601, Burns' Ind.St.1933, Sec. 844, Baldwin's Ind.St.1934? A person who practices law without having been admitted to the bar is guilty of a misdemeanor, Sec. 4-3602, Burns' Ind.St.1933, Sec. 845, Baldwin's Ind.St.1934. If not duly licensed to practice law, is he entitled to recover in this case?

The practice of law is defined in 7 C.J.S., Attorney and Client, 703, Section 3(g), as follows: 'The general meaning of the term, 'practice law' or 'practice of law', is of common knowledge, although the boundaries of its definition may be indefinite as to some transactions. As generally understood, it is the doing or performing of services in a court of justice, in any matter depending therein, throughout its various stages, and in conformity with the adopted rules of procedure; but it is not confined to performing services in an action or proceeding pending in courts of justice, and, in a larger sense, it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be depending in a court. To 'practice law' is to carry on the business of an attorney at law; to do or practice that which an attorney or counselor at law is authorized to do and practice; to exercise the calling or profession of the law; usually for the purpose of gaining a livelihood, or at least for gain; to make it one's business to act for, and by the warrant of, others in legal formalities, negotiations, or proceedings.' (Court's italics.)

In Rhode Island Bar Ass'n v. Automobile Service Ass'n, 1935, 55 R.I. 122, 179 A. 139, 100 A.L.R. 226, annotated, it was held that laymen, acting as a voluntary association, in entering into contracts with others to furnish the services of a lawyer to patrons in connection with matters growing out of the ownership and operation of automobiles, were engaged in the unauthorized practice of law.

The Supreme Court of Minnesota, in the case of Fitchette v. Taylor, 1934, 191 Minn. 582, 254 N.W. 910, 94 A.L.R. 356, held that an injunction would lie to prevent the practice of law by laymen. The defendant was enjoined from: "(a) Furnishing opinion as to the right to maintain an action against others. (b) Drawing contracts, releases and affidavits for others. (c) Furnishing legal services or advice to others. (d) Soliciting, settling or adjusting personal injury claims or otherwise engaging in the practice of law."

The county bar association was the plaintiff in that case, and charged that the defendant and others associated with him were not members of the bar, but solicited, advertised for, and held themselves out as being engaged in the business of adjusting and settling claims for personal injuries and collecting damages therefor. They interviewed witnesses and secured statements relative to the claims which they purported to handle in order to enable them to give legal advice and opinion as to the collectibility thereof, and in order to enable the defendants to discuss, advocate, and argue the legal rights and liabilities in the course of presenting the claims and negotiating the settlements. The defendants performed this labor for hire.

The court held that such services were as much the practice of the law as the conduct of litigation in court. When one undertakes to give counsel as to legal status or rights in respect to a pending claim, he is performing a special function reserved for attorneys at law, as much as diagnosis, prognosis, and prescription are within in the special field of medicine. The court said whatever definition may be given to the practive of the law, 'it is enough that, under any permissible definition, the subject of this injunction was the practice of law by a layman and so unlawful.'

In Eley v. Miller, 1893, 7 Ind.App. 529, at page 535, 34 N.E. 836, at page 837, the Appellate Court of this state had occasion to define the practice of law by the use of the following language: 'As the term is generally understood, the 'practice' of the law is the doing or performing services in a court of justice, in any matter depending therein, throughout its various stages, and in conformity to the adopted rules of procedure. But in a larger sense it includes legal advice and counsel, and the preparation of legal instruments and contracts by which legal rights are secured, although such matter may or may not be depending in a court.'

In Harris v. Clark, 1924, 81 Ind.App. 494, 142 N.E. 881, it was held that a person who was not duly admitted to practice law in this state, in conformity to the provisions of the statute, could not recover for legal services rendered.

In re Opinion of the Justices, 1935, 289 Mass. 607, 194 N.E. 313, the Legislature of the State of Massachusetts submitted certain questions to the Supreme Court of that state relating to a proposed bill to be presented to the Legislature, relative to the practice of the law, admission to the bar, and the control of those engaged in such business. In discussing this question the court said [page 316]:

'So far as the practice of the law relates to the performance of the functions of an attorney or counsellor at law before the courts, it comprises mastery of the facts and law constituting the cause of action or legal proceeding of whatever nature, the preparation of pleadings, process, and other papers...