Judd v. City Trust & Sav. Bank

• Decision Date: 15 December 1937
• Docket Number: 26338.
• Court: Ohio Supreme Court
• Parties: JUDD et al. v. CITY TRUST & SAVINGS BANK et al.

12 N.E.2d 288

133 Ohio St. 81

JUDD et al. v. CITY TRUST & SAVINGS BANK et al.

No. 26338.

Supreme Court of Ohio

December 15, 1937

Syllabus by the Court.

1. In Ohio, the power to regulate, control, and define the practice of law rests inherently in the judicial branch of the government.

2. A corporation cannot lawfully engage in the practice of law nor can it do so indirectly through the employment of qualified lawyers.

3. The practice of law consists essentially of the performance of legal services for others. Banks and trust companies in Ohio are engaged in the unauthorized practice of law when through their regular salaried officers and employees, who may be attorneys at law admitted to practice in Ohio, they prepare and draft wills, trust agreements, or contracts and other instruments requiring the exercise of legal skill, for their customers or patrons. And it makes no difference that such banks may be designated in such instruments in fiduciary capacities.

4. Sections 710-159 and 710-160, General Code of Ohio, expressly confer upon trust companies authorized to do business in Ohio the right to act in certain fiduciary capacities 'under the same circumstances and in the same manner, and subject to the same control by the court having jurisdiction * * * as in the case of a legally qualified person.' A fiduciary, whether an individual or a trust company, may exercise the privilege of completely executing the particular trust in all its details. Such trust companies may, therefore, through their regular attorney-employees draft papers incident to the administration of the trusts in their hands, and appear in the probate court or other courts in matters pertaining to the execution of such trusts.

5. This privilege, however, does not operate as a license to render legal services for others. Such companies must adhere to the business of executing the trusts in their control; they have no right or authority through their attorney-employees to give independent legal advice to those beneficially interested, to perform legal services directly for them, or to advise or act for others claiming some interest in the trust estate, where such advice or acts would partake of a legal nature.

This action in injunction was commenced in the court of common pleas of Mahoning county by the plaintiffs, Wallace F. Judd, William A. Mason, and Robert J. Nicholson, of the city of Youngstown, Ohio, duly admitted to the practice of law in all the courts of Ohio, on behalf of themselves and others, associated as members of the Mahoning County Bar Association, against the defendants, the City Trust & Savings Bank, the Dollar Savings & Trust Company, and the Mahoning Savings & Trust Company, Ohio corporations in the city of Youngstown, organized and existing for the purpose of conducting the business of banking and the administering of trusts.

The amended petition alleged that, contrary to the rights of plaintiffs and all other regularly licensed attorneys at law, and contrary to public policy and in violation of law, the defendant corporations through their regularly employed officers, some of whom are attorneys at law, are engaged in the practice of law 'by drawing wills, trust agreements, and other legal documents, and by giving legal advice incident thereto, for other persons * * * by permitting, authorizing and/or directing their said agents to prepare drafts of wills, codicils, trust agreements and other legal documents for other persons in which said instruments said defendants are named as trustee, executor, administrator, guardian, agent, or in other fiduciary capacity, and to give legal advice incident thereto.'

Plaintiffs prayed 'that a permanent injunction be issued, enjoining and restraining defendants, and each of them, from practicing law as herein alleged, and for such other and further relief as may be just and equitable in the premises. * * *'

Separate answers were filed by the three defendants, similar in form. In addition to general denials, each defendant pleaded that it was 'qualified under the law to do a trust business in the state of Ohio, and is authorized to accept trusts and receive and hold property thereunder in a fiduciary capacity in accordance with the provisions of said law.'

Further answering, each defendant alleged it employed 'qualified attorneys at law to represent its interests, and from time to time permits, authorizes and directs said attorneys to draft wills, trust agreements and other fiduciary documents, in all of which documents, this defendant is either a party or is named as trustee, executor, administrator, guardian, agent, or in other fiduciary capacity and in all of which documents this defendant has a direct and substantial interest as such fiduciary.'

The court of common pleas found the issues joined by the pleadings in favor of the plaintiffs and decreed them the relief asked for in the amended petition.

Thereupon, on December 31, 1935, the cause was appealed to the Court of Appeals. On December 9, 1936, that court also decreed relief in favor of the plaintiffs, finding in its journal entry that the defendants maintain, and have maintained trust departments in connection with their business, in charge of officers, employees, and attorneys at law upon a fulltime salary basis; that defendants have held themselves out to the public as maintaining trust departments and have through attorney trust officers and others given legal advice to individuals and patrons in the preparation and drafting of wills, codicils, trust agreements, deeds, and escrow agreements, and have also held themselves out to the public as qualified to appear in courts in handling estates and legal matters, including court procedure, incident to the administering of trusts, estates, etc.; that defendants have performed services for patrons and for the public by drafting wills, codicils, trust agreements, etc., and have by and through said officers and agents for and on behalf of their patrons appeared in the courts of Mahoning county, Ohio, in the administration of estates and trusts.

The court further found that, in drafting such legal documents and in subsequently making court appearances in connection therewith, the defendants have had no direct or primary interest, although appointed fiduciaries in and by virtue of such instruments, and that the defendants have been engaged in the unlawful practice of law in the respects charged in the amended petition and as disclosed by the evidence.

The journal entry concludes:

'It is therefore ordered, adjudged and decreed that the defendants and each of them, their officers, agents and employees be and they are hereby perpetually enjoined from advertising, representing or holding out that they maintain a legal department for the purpose of giving legal advice or that they draft or will draft legal documents, for and on behalf of their patrons, or other persons, individuals, or corporations, and from drafting or preparing legal documents for persons, individuals or corporations, in which they have no direct or primary interest; and they are enjoined, together with their officers, agents and employees, from the practice of law for and on behalf of others in matters in which they have no direct or primary interest and they are, together with their officers, agents and employees, perpetually enjoined from the practice of law by appearing in court for and on behalf of others, whom they may represent or claim to represent in fiduciary capacities.'

It is to be noted that the Court of Appeals extended its decree of injunction not only beyond the scope of relief asked by the plaintiffs in their amended petition, but beyond the scope of the decree entered by the court of common pleas.

This cause is in the Supreme Court of Ohio by reason of the allowance of a motion to certify.

McKain, Ohl & Swanner, Manchester, Ford, Bennett & Powers, and Harrington, Huxley & Smith, all of Youngstown, for appellants.

Wallace F. Judd, William A. Mason, and Robert J. Nicholson, all of Youngstown, for appellees.

ZIMMERMAN Judge.

At the outset of this opinion, two general propositions must be conceded: (1) In Ohio, the power to regulate, control and define the practice of law reposes in the judicial branch of the government. 4 Ohio Jurisprudence 423, § 5; Land Title Abstract & Trust Co. v. Dworken, 129 Ohio St. 23, 193 N.E. 650. And this is true elsewhere. See In re Opinion of the Justices, 289 Mass. 607, 194 N.E. 313, and cases therein cited. (2) A corporation cannot lawfully engage in the practice of law; nor can it do so indirectly through the employment of qualified lawyers. Land Title Abstract & Trust Co. v. Dworken, supra; Section 8623-3, General Code of Ohio; 4 Ohio Jurisprudence 429, § 12; 10 Ohio Jurisprudence 888, § 663; 5 American Jurisprudence 276, § 25.

In the disposition of this case upon the record there are two questions to be answered. They will be stated and discussed separately. The first is as follows:

Are state banks in Ohio, having trust powers, engaged in the unauthorized practice of law, when, through regularly employed and salaried officers and employees who are generally attorneys at law admitted to practice in Ohio, they prepare and draft wills, trust agreements and contracts for their customers and patrons, in which instruments the banks are named in fiduciary capacities?

The leading case in this state relating to the unauthorized practice of law is Land Title Abstract & Trust Co. v. Dworken, supra. There, in the first paragraph of the syllabus, the following rule is announced:

'1. The practice of law is not limited to the conduct of cases in court. It embraces the preparation of pleadings and other papers incident to actions and special...