Kentucky State Bar Ass'n v. Tussey

• Decision Date: 04 February 1972
• Citation: 476 S.W.2d 177
• Parties: KENTUCKY STATE BAR ASSOCIATION, Complainant, v. R. L. TUSSEY, Respondent.
• Court: United States State Supreme Court — District of Kentucky

Page 177

476 S.W.2d 177

KENTUCKY STATE BAR ASSOCIATION, Complainant, v. R. L. TUSSEY, Respondent.

Court of Appeals of Kentucky.

Feb. 4, 1972.

Charles A. Cassis, Frank E. Haddad, Jr., Frank A. Logan, Louisville, for complainant.

Andrew J. Ross, Richmond, John E. Tarrant, Tarrant, Combs, Blackwell & Bullitt, Eli H. Brown, III, Brown, Eldred & Bonnie, Samuel L. Greenebaum, Greenebaum, Grissom, Doll, Matthews & Boone, Squire R. Ogden, Ogden, Robertson & Marshall, James W. Stites, Stites & McElwain, Leo T. Wolford, Middleton, seelbach, Wolford, Willis & Cochran, Louisville, for respondent.

PER CURIAM.

The primary question before us is whether the preparation of real estate mortgages for a bank by one of its lay officers constitutes the practice of law within the meaning of RCA 3.020, which at the time this proceeding arose read as follows:

"The practice of law' is any service rendered involving legal knowledge or legal advice, whether of representation, counsel, advocacy in or out of court, rendered in respect to the rights, duties, obligations, liabilities, or business relations of one requiring the services. But nothing herein shall prevent any person not holding himself out as a practicing attorney from drawing any instrument to which he is a party without consideration unto himself therefor.'

' Practicing law _ _ includes giving advice and preparing wills, contracts, deeds, mortgages, and other instruments of a legal nature.' Howton v. Morrow, 269 Ky. 1, 106 S.W.2d 81, 82 (1937). Ordinarily, therefore, the drawing of a real estate mortgage by one person for another would amount to the practice of law. But respondent relies on the last sentence of RCA 3.020 as above quoted and upon KRS 30.170(3), which provides:

'No rule _ _ shall prevent a person not holding himself out as a practicing attorney from writing a deed, mortgage or will, or prevent a person from drawing any instrument to which he is a party.'

The word 'person' may of course include a corporation under the statute laws of the state unless the context requires otherwise. KRS 446.010(21).

Respondent further calls our attention to the following language in Carter v. Trevathan, Ky., 309 S.W.2d 746, 748 (1958):

'To come within the exception of RCA 3.020, one, who is not a lawyer, must not only act without consideration for his services in drawing the paper but he must be a party to, or his name must appear in, the instrument as one to be benefited thereby. Merely having a pecuniary interest, direct or indirect, in the transaction covered by the instrument he draws will not suffice to relieve him of the charge of unauthorized practice of law unless he is party to, or his name appears in, the paper as one of the beneficiaries thereof. However, if one, who is not a lawyer, is a officer of a corporation or a member of a firm or partnership, not acting in a fiduciary capacity, he may under RCA 3.020 draw a legal instrument for or on behalf of the corporation, firm or partnership if it is a party to the instrument, provided he receives no remuneration for that particular service.' (Emphasis Added.)

The bar association contends, on the other hand, that neither KRS 30.170(3) nor the saving clause of RCA 3.020 is applicable and that the italicized language quoted from Carter v. Trevathan is dictum and in any event was effectually overruled by Frazee v. Citizens Fidelity Bank and Trust Company, Ky., 393 S.W.2d 778, 784 (1965), which held among other things that a bank or trust company acting only in a fiduciary capacity may not draft deeds and mortgages.

Respondent seeks to distinguish Frazee upon the ground that it was confined to fiduciary matters and services performed in the administration of estates, trusts and guardianships. Certainly it did not directly involve the question before us in this case, and it is perhaps for that reason that the court's attention was not drawn to a consideration of whether a basic inconsistency existed between Frazee and the so-called dictum in Carter v. Trevathan.

We think there is such an inconsistency, and that the last sentence of the quoted excerpt from Carter v. Trevathan must give way to the fundamental principle of Frazee.

The reason a trustee cannot to the things prohibited to it under Frazee is that unless it is a beneficial party to the instrument drawn it is not the real party in interest and therefore is drawing the instrument for someone else who is. This distinction is not obscured by the close relationship between trustee and beneficiary. Neither may it be obscured by the relationship between master and servant, principal and agent, employer and employe, corporation and officer. If the nonprofessional trustee may not prepare an instrument for his or its beneficiary, the nonprofessional officer or employee may not prepare it for his employer.

We construe KRS 30.170(3) and the last sentence of RCA 3.020, quoted above, as meaning one and the same thing, which is to say that any person may draw an instrument to which he is a party. By necessary implication RCA 3.020 says he may not charge compensation for it unless he is a lawyer. That is not inconsistent with the statute. Frazee says in effect that a trustee, as such, is not a 'party' within the meaning of these provisions. In the case before us the bank was a party to the mortgages in question and would have the right to prepare such instruments if it were physically possible for it to do so. But a corporation is an artificial person, not capable of performing any act except through the agency of others, and for that reason it cannot come within the meaning of a 'per...