Nicollet Restoration, Inc. v. Turnham

• Decision Date: 02 July 1992
• Docket Number: No. C3-91-991,C3-91-991
• Citation: 486 N.W.2d 753
• Parties: NICOLLET RESTORATION, INC., Petitioner, Appellant, v. Darcy TURNHAM, d/b/a Darcy Sales, Respondent.
• Court: Minnesota Supreme Court

Page 753

486 N.W.2d 753

NICOLLET RESTORATION, INC., Petitioner, Appellant, v. Darcy TURNHAM, d/b/a Darcy Sales, Respondent.

No. C3-91-991.

Supreme Court of Minnesota.

July 2, 1992.

Syllabus by the Court

A corporation must be represented by a licensed attorney when appearing in district court regardless of the fact that the action originated in conciliation court.

Charles A. Cox, Cox & Goudy, Minneapolis, for appellant.

Jack F. Brown, Minneapolis, for respondent.

Considered and decided by the court en banc without oral argument.

TOMLJANOVICH, Justice.

The petitioner, Nicollet Restoration, Inc., seeks review of a court of appeals decision which held that a corporation must be represented by a licensed attorney when appearing in district court notwithstanding that the action originated in conciliation court. We affirm.

This is a commercial landlord-tenant dispute. The petitioner, a corporation, commenced an action in conciliation court against respondent for unpaid rent and cleaning charges. Both petitioner and respondent appeared without counsel at the May 17, 1990, hearing. Judgment for the petitioner was entered in the amount of $1,862. Respondent then removed the case to district court for a trial de novo.

This action proceeded to trial on April 1, 1991, with petitioner seeking to appear by its president. It is undisputed that the president of the corporation is not a licensed attorney. At the opening of trial, respondent's attorney moved for dismissal based on the petitioner's decision to appear without an attorney. Apparently, the trial court told the petitioner that it would grant a continuance so that the petitioner could retain counsel. After the petitioner elected not to request a continuance and to proceed without counsel, the trial judge dismissed the action with prejudice. On October 15, 1991, the court of appeals affirmed the trial court, holding that it made no difference that petitioner's action originated in conciliation court. 475 N.W.2d 508. This appeal followed.

Generally, a corporation must be represented by a licensed attorney when appearing in court, regardless of whether the person seeking to represent the corporation is a director, officer or shareholder. See Annotation, Propriety and Effect of Corporation's Appearance Pro Se, Through Agent Who is Not Attorney, 19 A.L.R.3d 1073 (1968). This prohibition is rooted in the common law. "At common law '... a plea by a corporation aggregate, which is incapable of a personal appearance, must purport to be by attorney.' " Strong Delivery Ministry Ass'n v. Board of Appeals of Cook County, 543 F.2d 32, 33 (7th Cir.1976) (quoting 1 Chitty On Pleading 550 (12th Am.Ed.1855)). In Osborn v. Bank of the United States, 22 U.S. (9 Wheat.) 738, 830, 6 L.Ed. 204 (1824), Chief Justice Marshall noted that, "A corporation, it is true, can appear only by attorney, while a natural person may appear for himself." See also Commercial & Railroad Bank of Vicksburg v. Slocomb, Richards & Co., 39 U.S. (14 Pet.) 60, 65, 10 L.Ed. 354 (1840) ("[A] corporation cannot appear but by attorney").

Minnesota follows the common law rule that a corporation may appear only by attorney. We first touched upon this rule in Banks v. Pennsylvania Ry. Co., 111 Minn. 48, 126 N.W. 410 (1910). In finding jurisdiction over a foreign corporation which appeared generally and entered an answer on the merits, we stated:

It may be conceded, as claimed, that the courts of this state have no jurisdiction over a foreign corporation, except as it is brought within the purview of our statutes; but it is equally true that such a corporation may voluntarily appear by attorney and submit its person to the jurisdiction of the courts of the state, precisely as it may by attorney come into such courts for the purpose of enforcing its claims.

Banks, 111 Minn. at 54, 126 N.W. at 411 (emphasis supplied). Sixteen years later, we directly addressed the common law rule in Cary & Co. v. F.E. Satterlee & Co., 166 Minn. 507, 208 N.W. 408 (1926). We held:

The ruling refusing to permit Mr. Francis C. Cary to appear as attorney for plaintiff was correct. Mr. Cary is no longer an attorney at law, and the right of a party to a suit in court to appear in person therein does not entitle him to appear for a corporation, even if he owns all its capital stock for the corporation is a distinct legal entity.

Cary, 166 Minn. at 509, 208 N.W. at 409. Although we have not had the opportunity to address the common law prohibition since Cary, it is still controlling precedent which prohibits a non-attorney agent from appearing on behalf of a corporation in district court.

In order to understand the importance of this prohibition, it is necessary to examine its underlying rationale. A non-attorney agent of a corporation is not subject to the ethical standards of the bar and is not subject to court supervision or discipline. The agent knows but one master, the corporation, and owes no duty to the courts. In addition, a corporation is an artificial entity which can only act through agents. To permit a lay individual to appear on behalf of a corporation would be to permit that individual to practice law without a license. The purpose behind attorney licensing requirements "is the protection of the public and the courts from the consequences of ignorance or venality." Strong Delivery Ministry, 543 F.2d at 33 (citation omitted). The Seventh Circuit Court of Appeals explained:

The rule in these respects is neither arbitrary nor unreasonable. It arises out of the necessity, in the proper administration of justice, of having legal proceedings carried on according to the rules of law and the practice of courts and by those charged with the responsibility of legal knowledge and professional duty.

* * * * * *

Were it possible for corporations to prosecute or defend actions in person, through their own officers, men unfit by character and training, men, whose credo is that the end justifies the means, disbarred lawyers or lawyers of other jurisdictions would soon create opportunities for themselves as officers of certain classes of corporations and then freely appear in our courts as a matter of pure business not subject to the ethics of our profession or the supervision of our bar associations and the discipline of our courts.

Id. at 33-34 (citations omitted). Thus, there are strong public policy considerations on which the prohibition is based. "[Any] departure ...