Lowell Bar Ass'n v. Loeb

Decision Date08 December 1943
Citation52 N.E.2d 27,315 Mass. 176
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court
PartiesLOWELL BAR ASSOCIATION & another v. BIRDIE T. LOEB& another.

November 8, 1943.

Present: FIELD, C.

J., LUMMUS, QUA COX, & RONAN, JJ.

Attorney at Law. Equity Pleading and Practice, Injunction, Decree, Appeal.

Upon an appeal from a final decree in a proceeding under Section 46B, inserted by St. 1935, c. 346, Section 2, in G. L. (Ter. Ed.) c. 221 where the record included a report of all the evidence as well as a voluntary report by the trial judge of "all the material facts," this court was not limited to the facts recited in the findings of the trial judge, but could find others from the evidence and, if findings made by the trial judge were deemed to be plainly wrong, could make findings contrary thereto.

Statement by LUMMUS, J., with citation of authorities, of occupations and professions, which are universally recognized as distinct from the practice of law and in the usual practice of which the giving of advice or the drawing of documents or performance of other services is not deemed practice of law prohibited to persons not members of the bar although done for compensation and involving some element of law or legal effect or knowledge of law.

Merely advertising through newspapers and by placards a service of making out simple income tax returns for persons whose income consisted wholly, or almost wholly, of salary or wages, and the rendering of such service for compensation, was not the practice of law by persons not members of the bar in violation of Section 46A, inserted by St. 1935, c. 346,

Section 2, in G. L (Ter. Ed.) c. 221.

For persons not members of the bar, associated in the advertising and conducting of a service of preparing for a consideration simple income tax returns of salary and wage earners, also to advertise the furnishing for such consideration of "counsel in handling income tax matters should any develop after the official audit by the U.S. Tax Department during the year," naming an attorney at law as "legal counsel" and stating that

"we stay with your taxes" and "take care of all correspondence and all interviews with the tax department," was the advertising of an undertaking to sell the legal services of a lawyer who was to act for the association, and was a violation of Section 46A, inserted by St.

1935, c. 346 Section 2, in G. L. (Ter. Ed.) c. 221.

A preliminary injunction expired upon the later entry of a final decree after a hearing on the merits, and the propriety of the preliminary injunction was not considered on appeals from both decrees.

PETITION, filed in the Superior Court on February 18 1943. The case was heard by Morton, J.

H. W. Cole, (C.

W. O'Brien with him,) for the respondents.

R. B. Walsh, (A.

Z. LeMoine, Assistant Attorney General, with him,) for the petitioners.

R. G. Dodge & E.

H. Sullivan; R.

B. Heavens; and R. S. Woodbury, by leave of court, submitted briefs as amici curiae.

LUMMUS, J. This is a petition in equity, under G. L. (Ter. Ed.) c. 221, Section 46B, inserted by St. 1935, c. 346, Section 2, brought by an incorporated association of members of the bar, to restrain the respondents, who are not members of the bar, from holding themselves out as authorized, entitled, competent, qualified and able to practise law, from engaging in the practice of law, and from giving legal advice in respect to liability to pay income taxes and the preparation and execution of income tax returns. See also Steinberg v. McKay, 295 Mass 139 , 142; McMurdo v. Getter, 298 Mass. 363 , 364. The petition was dismissed as to the respondent Koch, who was not served with process. The Attorney General was permitted to intervene as an additional petitioner, under the section of the statute cited. From the decree allowing him to intervene, the remaining respondents Birdie T. Loeb and J. H. Friedman appealed. There is nothing in that appeal, and it is not argued. By interlocutory decree entered on March 4, 1943, those respondents were enjoined until the further order of the court "from in any form or manner advertising in the newspapers of this Commonwealth the making of tax returns, from maintaining signs or placards in the windows of the premises at 260 Merrimack Street, Lowell, Massachusetts, and from in any manner practicing law in this Commonwealth." By the final decree, entered on March 15, 1943, those respondents were "permanently enjoined and restrained from advertising a tax service in any form whatsoever, whether in newspapers, placards or signs displayed in their various offices, and from engaging in the making out of income tax returns as a regular occupation and other than the occasional drafting thereof and from engaging in the practice of the law in any of its aspects," and were ordered to pay costs. From each decree those respondents appealed. The case is here on a voluntary report of "all the material facts," and a report of all the evidence under G. L. (Ter. Ed.) c. 214, Section 24, and Rule 76 of the Superior Court (1932).

In our consideration of the facts, we are not limited to those recited in the findings of the judge, even though he undertook to find "all the material facts." All the evidence is before us, and all questions of law, fact and discretion are open for our decision. From the evidence we can find facts not expressly found by the judge. If convinced that he was plainly wrong, we can find facts contrary to his findings. Trade Mutual Liability Ins. Co. v. Peters, 291 Mass. 79 , 83, 84. Culhane v. Foley, 305 Mass. 542, 543. Marshall v. Landau, 308 Mass. 239 , 241, 242. Bernhardt v. Atlantic Finance Corp. 311 Mass. 183 . McLaughlin v. Old Colony Trust Co. 313 Mass. 329 , 330.

The facts may be summarized as follows: One Louis G. Loeb, an attorney at law practising in Boston, the husband of the respondent Birdie T. Loeb, had an interest in a business of making out income tax returns for wage earners which was carried on in Quincy in 1941, and was then discontinued. In the summer of 1942 he planned to establish a similar business in a number of manufacturing cities. Recent statutes had required income tax returns from many wage earners previously exempt, and the trend was toward a further extension of tax liability. U. S. C. Title 26, Section 51, originally enacted as Act of May 28, 1938, c. 289, Section 51 (52 U.S. Sts. at Large, 476), and later amended by Act of June 25, 1940, c. 419, Title I, Section 7 (a) (54 U.S. Sts. at Large, 519), Act of September 20, 1941, c. 412, Title I, Section 112 (a) (55 U.S. Sts. at Large, 696), and Act of October 21, 1942, c. 619, Title I, Sections 131 (c) (1), 136 (a) (56 U.S. Sts. at Large, 828, 836). For the Victory Tax, see Act of October 21, 1942, c. 619, Title I, Section 172 (56 U.S. Sts. at Large, 884).

To carry out his plan, he organized the unincorporated American Tax Service, with headquarters in Boston which soon after establishment were moved to his law office, and with branch offices in Lowell, Lawrence and other manufacturing cities. He is the real owner of the business, although he devotes little time to it. The respondent Birdie T. Loeb devotes all her time to the business, and ostensibly is the proprietor. The respondent Friedman is general manager, and has his office at the Boston headquarters. The respondent Koch was manager of the Lowell branch until succeeded by one Shea. The business has about one hundred employees during the season for income tax returns. None of them is a member of the bar. None of them appears to be an accountant, with the exception of the respondent Friedman.

The American Tax Service does not attempt to make out income tax returns for corporations, partnerships, estates, fiduciaries or business men conducting a business. Its patrons are exclusively persons whose income consists wholly, or almost wholly, of salary or wages. It advertises extensively in newspapers and by signs in its windows. There is little modesty or restraint about its advertising, which is designed to arrest attention and to bring in a large volume of business. Its uniform prices are $2 for a State or Federal return, and $3.75 for both returns. Its "maximum charge for all returns to any one person" is advertised to be the latter sum.

The legal principles underlying this case are now well established. The judicial department of government, and no other, has power to license persons to practise law. Statutes may aid by providing machinery and criminal penalties, but may not extend the privilege of practising law to persons not admitted to practice by the judicial department. Opinion of the Justices, 289 Mass. 607 . Keenan, petitioner, 310 Mass. 166 . Matter of Keenan, 313 Mass. 186 , 196, 204, 205. Note, 144 Am. L. R. 150. As constituted at present, the Massachusetts bar is a unit. Each member may practise in any State court and in any branch of legal work, without regard to his special qualifications in one branch or his comparative lack of them in another. In England, the legal profession is divided, and lawyers may practise only in the branch of work for which they have been admitted. Formerly a similar division existed in this Commonwealth. Washburn, Judicial History of Massachusetts, 189, 200, 201. S. J. C. Rules (1806) 2 Mass. 72 , 105. S. J. C. Rules (1810) 6 Mass. 382 . St. 1782, c. 9, Section 4. Rev. Sts. (1836) c. 88, Section 23. Pub. Sts. (1882) c. 159, Section 37. G. L. (Ter. Ed.) c. 221, Section 37. The justification for excluding from the practice of law persons not admitted to the bar is to be found, not in the protection of the bar from competition, but in the protection of the public from being advised and represented in legal matters by incompetent and unreliable persons, over whom...

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