Petitions of Ingham County Bar Ass'n

• Decision Date: 14 April 1955
• Docket Number: 64,No. 63,63
• Citation: 342 Mich. 214,69 N.W.2d 713,53 A.L.R.2d 777
• Parties: , 53 A.L.R.2d 777 Petitions of INGHAM COUNTY BAR ASSOCIATION to have the Walter Neiler Company et al., and Edward G. Hacker Company et al., adjudged guilty of contempt of court and enjoined from the practice of law. INGHAM COUNTY BAR ASSOCIATION, Petitioner, State Bar of Michigan, Intervenor and Appellant, v. WALTER NELLER COMPANY et al., Edward G. Hacker Company et al., Respondents and Appellees.
• Court: Michigan Supreme Court

Page 713

69 N.W.2d 713

342 Mich. 214, 53 A.L.R.2d 777

Petitions of INGHAM COUNTY BAR ASSOCIATION to have the Walter Neiler Company et al., and Edward G. Hacker Company et al., adjudged guilty of contempt of court and enjoined from the practice of law INGHAM COUNTY BAR ASSOCIATION, Petitioner, State Bar of Michigan, Intervenor and Appellant, v. WALTER NELLER COMPANY et al., Edward G. Hacker Company et al., Respondents and Appellees.

No. 63, 64.

Supreme Court of Michigan.

April 14, 1955.

Charles L. Golstein, G. Leslie Field, Detroit, for State Bar, intervenor-appellant.

Jennings, Fraser, Parsons & Trebilcock, Lansing, for respondents-appellees.

Neithercut & Neithercut, Flint, George R. Sidwell, Lansing, for Michigan Real Estate Ass'n, amicus curiae.

Before the Entire Bench.

BUTZEL, Justice.

The Ingham County Bar Association, plaintiff, brought proceedings to have Walter Neller Company and Edward G. Hacker Company, both Michigan corporations, corporate defendants, and Arnold J. Sprayman, Harold Davis and Alice L. Broadbent, individual defendants, adjudged guilty of contempt of court. The specific charge is that they practiced law illegally. There is no testimony whatsoever to indicate that Herman Cook, Jr., also an individual defendant, ever performed any acts which plaintiff alleges constitute the illegal practice of law. He will not be further referred to in this opinion. Plaintiff also sought an injuction against all of the defendants to restrain them from what plaintiff claims was the illegal practice of law. The State Bar of Michigan intervened as a plaintiff and we shall also include it as plaintiff. The Michigan Real Estate Association filed a brief as amicus curiae. In view of our decision it is unnecessary to consider other questions raised by the brief.

The defendant corporations are realtors in the city of Lansing, Michigan, and respectively employ the individual defendants. They do a large volume of real estate business, manage properties, collect rents for some of their clients, and one of them represents an insurance company which makes loans on real estate mortgages. In the conduct of their work they fill in standard printed froms of agreements of purchase and sale, deeds, land contracts, mortgages, assignment of mortgages, notice to quit, et cetera, as printed by stationers. They do this solely in connection with properties in which their services are enlisted in the course of the particular transactions in which they are involved, and for no one else, nor do they receive any extra fees or compensation whatsoever for these incidental services. The testimony shows that if forms of conveyance are necessary in these transactions the defendants fill in on the printed forms the names of the parties, the date, the description of the property, terms of the contract, et cetera; that they draw instruments such as deeds, mortgages, et cetera, after the abstract has been examined by an attorney; and that if something other than a simple warranty deed, land contract or other document is contemplated, an attorney is called upon to draw it. Plaintiffs also claim that in cases of nonpayment of rent and after notice to quit, defendants conducted proceedings before the circuit court commissioner for repossession of the property.

Plaintiffs claim that all the parties, licensed brokers but not licensed attorneys, thus engaged in the practice of law in violation of C.L.1948, § 601.61, Stat.Ann. § 27.81, and that the two corporate defendants thus also engaged in the practice of law contrary to the provisions of C.L.1948, § 450.681, Stat.Ann. § 21.311. Defendants specifically denied the charge that they had acted illegally and assert that what they did was not the practice of law but only the filling in of simple forms without exacting or receiving extra compensation, and solely as incidental to real estate transactions in which they were engaged.

The main and real question in the case is whether such transactions as hereinbefore described constitute the practice of law. The plaintiffs brought these proceedings in a commendable effort to protect the public against the illegal practice of law. All parties admit that the question presented is one of first impression in this State although it has been passed upon in a few other jurisdictions. The case was heard by the three judges of Ingham county sitting en banc and they unanimously held that the filling out of the standardized blank forms, as described by the testimony, was not the practice of law when it was only incidental to the particular transactions they, as licensed brokers, were engaged in; but that in the proceedings before the circuit court commissioner, the examining and cross-examining of witnesses constituted the practice of law and would be enjoined. There is no appeal from the part of the decree restraining defendants from such activity before the circuit court commissioners. Our discussion is therefore limited to the question stated as follows by appellees:

'Have respondents practiced law or engaged in the law business contrary to MSA 27.81 by reason of their having completed and filled out printed forms of offers to purchase real estate, warranty deeds, quit claim deeds, land contracts, land contract assignments, leases, and notices to terminate tenancy incidental to their handling and consummation of real estate transactions in which respondents were acting as real estate brokers, no separate charge having been made therefor?'

Plaintiffs claim that only a duly licensed attorney has the right to fill in these forms. They contend that the defendant realtors violated C.L.1948, § 601.61, Stat.Ann. § 27.81, which provides:

'It shall be unlawful for any person who is not a regularly licensed attorney and counselor of this state, * * * to practice law or to engage in the law business; or to represent himself as an attorney at law, or to use any sign, letter head, return envelope, or writing, printing or advertising of any kind whatever in or by which he designates or represents his place of business as a law office or himself as a lawyer, attorney at law, counselor, or in any way represent to the public that he is an attorney at law, or his place of business a law office; or to make any representations to any person or persons either spoken or written, intended to lead such person or persons to believe that the person making such representations is an attorney at law';

and C.L.1948, § 450.681, Stat.Ann. § 21.311, which makes it unlawful for any corporation to practice law with the exception that:

'This section shall not apply to any corporation * * * lawfully engaged in a business authorized by the provisions of any existing statute, * * *.'

Of this latter provision, the court in Detroit Bar Association v. Union Guardian Trust Company, 282 Mich. 216, 225, 276 N.W. 365, 368, stated:

'It is apparent that this provision was embodied in the statute by the Legislature so it might be definitely understood that it was not the intent of the Legislature by this enactment to restrict the powers conferred upon corporations by other acts of the Legislature under which such corporations were organized.'

The licensing and regulation of real estate brokers is provided for in C.L.1948, § 451.201 et seq, Stat.Ann.Cum.Supp.1953 § 19.791 et seq. In addition, the Corporation and Securities Commission is charged with the administration and enforcement of these provisions. C.L.1948, § 451.204, Stat.Ann.Cum.Supp.1953, § 19.794. Further, and most important, C.L.1948, § 451.208, Stat.Ann.Cum.Supp.1953, § 19.798, provides:

'The commission shall also require each applicant for broker's or salesman's license to pass an examination establishing, in a manner satisfactory to the commission, that the applicant has a fair knowledge of the English language, including reading, writing, spelling and elementary arithmetic, a satisfactory understanding of the fundamentals of real estate practice and of the laws and principles of real estate conveyancing, deeds, mortgages, land contracts, leases, the obligations of a broker to the public and his principal, and the provisions of the Michigan statutes defining, regulating and licensing real estate brokers and salesmen: Provided, however, That the commission shall have the authority to require at its discretion written examination or written reexamination of brokers and/or salesmen, and in these cases that passing grades, satisfactory to the commission shall be required as a condition precedent to reissuance of licenses to such brokers and/or salesmen.' (Emphasis supplied.)

Plaintiff claims that this latter provision was enacted subsequently to the unlawful practice of law statute above quoted, and conflicts with it, that inasmuch as the earlier statute has not been expressly repealed or amended (and should not impliedly be so) the last quoted statute is of no legal effect. We cannot subscribe to this view.

In addition it is persuasive but not conclusive that the regulations and rules of the real estate division of the Corporation and Securities Commission bear out our interpretation of the statute. Accordingly we conclude that while the statutes do not define the practice of law, they do reveal, at the very least, the right of licensed real estate brokers to engage in conveyancing in the manner complained of when it is incidental to the items of business they are transacting.

Since it is left to the courts of this State as well as those of most other States, to define the 'practice of law' we must consider the adjudicated authorities. Initially, however, a verbal distinction must be disposed of. It is said that while conveyancing may be considered to be the practice of law, the real question is whether, conceding that it is, it should be deemed unlawful when solely incidental to a lawful business. It has been repeatedly held that it is not the practice of law. Under either approach the inquiry is the same for all...