State Bar Ass'n of Conn. v. Connecticut Bank & Trust Co.

• Decision Date: 15 April 1958
• Citation: 69 A.L.R.2d 394,140 A.2d 863,145 Conn. 222
• Court: Connecticut Supreme Court
• Parties: , 69 A.L.R.2d 394 STATE BAR ASSOCIATION OF CONNECTICUT et al. v. The CONNECTICUT BANK AND TRUST COMPANY. STATE BAR ASSOCIATION OF CONNECTICUT et al. v. HARTFORD NATIONAL BANK AND TRUST COMPANY. Supreme Court of Errors of Connecticut

Page 863

140 A.2d 863

145 Conn. 222, 69 A.L.R.2d 394

STATE BAR ASSOCIATION OF CONNECTICUT et al. v. The CONNECTICUT BANK AND TRUST COMPANY.

STATE BAR ASSOCIATION OF CONNECTICUT et al. v. HARTFORD NATIONAL BANK AND TRUST COMPANY.

Supreme Court of Errors of Connecticut.

April 15, 1958.

Wesley A. Sturges, New Haven, with whom were Hadleigh H. Howd, Winsted, and, on the brief, Fleming James, Jr., New Haven, for the appellants (plaintiffs); with him also was plaintiff David H. Jacobs, Meriden, pro se.

Horace E. Rockwell, New Haven, with whom was Cyril Coleman, Hartford, for appellees (defendants).

F. Trowbridge vom Baur, Washington, D. C., of the District of Columbia bar, with whom, on the brief, were Thomas J. Boodell, Chicago, Ill., of the Illinois bar, E. N. Eisenhower, Tacoma, Wash., of the Washington bar, Melvin F. Adler, Fort Worth, Tex., of the Texas bar, and Andrew Hourigan, Jr., Wilkes-Barre, Pa., of the Pennsylvania bar, as amicus curiae.

Before WYNNE, C. J., and BALDWIN, DALY, KING and MURPHY, JJ.

DALY, Associate Justice.

These two appeals were combined by order of the trial court pursuant to the provisions of § 382 of the Practice Book. The plaintiffs alleged in each complaint that the defendant corporation named therein was, and for a long time had been, unlawfully practicing law in this state in violation of the common law and §§ 7638 ¹ and 7641 ² of the General Statutes and in contempt of court. They sought injunctions restraining each defendant from engaging in any and all of the acts and practices alleged and judgments declaring whether those acts and practices, singly or in combination, constituted the unlawful practice of law and violations of the statutes. The court found all the issues except one for the defendant in each case. The plaintiffs have appealed from the judgments.

The defendant The Connecticut Bank and Trust Company is a state bank and trust company organized under the laws of this state and has its principal office and place of business in Hartford. The defendant Hartford National Bank and Trust Company is a national banking association incorporated and organized under the laws of the United States. As such, it is doing business in this state and has a principal office and place of business in Hartford. It is authorized to exercise the same fiduciary powers as the defendant The Connecticut Bank and Trust Company. Neither defendant has been, nor can be, admitted to the practice of law in this state. During the year 1956 the defendant The Connecticut Bank and Trust Company had some 200 employees in its trust department. Five of them were members of the bar of this state and were employed as full-time trust officers. During the year 1956 the defendant Hartford National Bank and Trust Company had slightly less than 200 employees in its trust department. Seven of them were members of the bar of this state. Five of these seven were employed as full-time trust officers.

By advertising and the distribution of literature, each defendant disseminated without charge to its customers, prospective customers and the public, general information concerning (1) the application, scope and effect of various laws involved in estate planning, including federal income and gift tax laws, federal and state estate and succession tax laws, laws relating to trusts and laws relating to the administration and disposition of decedents' estates; (2) the complexities of federal and state taxes and various means of minimizing liability for them; and (3) the advantages and disadvantages of various means provided by law for the distribution of property, including the use of inter-vivos and testamentary trusts. The information was given by each defendant for the purpose of inducing persons to name it as executor or trustee in wills or trust agreements. In some of the advertising and literature it was stated that individuals should consult their own attorneys for advice on their specific situations and that all wills and trust agreements must be drawn by attorneys. Each defendant, acting through the officers of its trust department discussed in conferences and correspondence with customers and prospective customers the matters enumerated above for the purpose of inducing them to name it as executor or trustee. Final or specific advice as to what an individual should do or as to what terms should be stated in a will or trust agreement was not given. Customers and prospective customers were urged to consult their own attorneys for advice on their specific situations. As far as was possible, the giving of definite answers to legal questions was avoided. No compensation for such conferences and correspondence was accepted.

Each defendant, through its trust officers, reviewed at the request of testators or settlors the provisions of wills and trust agreements, drawn by lawyers who were not employed by it, in instances where it had been named as executor or trustee or the testator or settlor had indicated that he was considering naming it executor or trustee. Such testators and settlors or their attorneys were advised of changes that ultimately might be necessary, proper or desirable. In all such cases, the trust officers urged the testators and settlors to consult their own attorneys. Neither defendant made any charge for these reviews. Everyone who indicated that he intended to name one of the defendants executor or trustee was informed that he must have the will or trust agreement drawn by his own attorney. It was not suggested that each testator or settlor name an attorney to represent the fiduciary on any legal matters that might arise in connection with the administration of the estate. Each was informed that the defendant in question was competent and had the right and authority to carry out through its employees the duties and activities imposed upon or required of a fiduciary.

The employees of the trust department of each defendant composed, drafted and filed in the probate courts petitions, accounts, inventories, lists of claims, and applications for the probate of wills, for widows' allowances, for the payment of its own claims against estates it was administering and for approval and acceptance of its accounts and reports. Each defendant, acting in a fiduciary capacity, caused its appearance and representation to be made by its trust department employees at hearings and proceedings in the probate courts, including hearings and proceedings on applications for widows' allowances, for the admission to probate of wills in which it was named as executor, for the compromise of claims for or against the estates it was administering, for the adjudication of its claims against those estates, and for approval and acceptance of its accounts and returns. These practices of the defendants through their employees, some of whom were and others were not, attorneys admitted to practice law in this state, were followed unless it was decided at some stage in a given administration that an uncertain or unclear legal issue was involved or that a controversy might arise. In the event of such a determination, each defendant might retain independent outside counsel for such legal services as it might indicate.

Each defendant's trust department employees prepared and filed federal and state tax returns and dealt with examiners of the internal revenue service and agents or attorneys of the state tax department in admitting, denying or compromising liabilities for taxes claimed to be due from estates that defendant was administering. If, however, it was considered that an uncertain or unclear legal issue was involved or it was known or expected that a controversy might arise, and the amount of taxes involved warranted it, each defendant was represented by independent outside counsel. Each defendant, in most instances in the course of its fiduciary administrations, retained independent outside counsel to represent it in matters involving real estate and to draw instruments pertaining to real property, only because it was deemed that such a retainer was necessary for the proper administration of estates. Trust officers of each bank, some of whom were, and some of whom were not, attorneys, had frequent meetings with tax attorneys representing the state to compromise claims arising out of the succession and transfer tax laws. The questions which arose were more difficult to solve than title searching problems. At these conferences, independent outside counsel were seldom present. Where the claim was contested in a probate court, however, each defendant was consistently represented by outside independent counsel. On questions of taxability, it was a common thing for the trust officers of the defendants to make decisions without consulting an attorney.

The court concluded that each defendant in performing the acts and carrying on the practices stated above was acting primarily for itself in the proper exercise of its fiduciary functions under existing statutes; that there is no valid distinction between acts performed by each defendant as a fiduciary through its salaried employees and the same acts performed through independent outside counsel retained by it; that each defendant, in giving general information to customers and prospective customers and in reviewing existing wills, did not engage in the unauthorized practice of law; that each defendant, in composing and drafting petitions, accounts, inventories, lists of claims and other papers which were filed in the probate courts, and in preparing and filing tax returns and appearing before state and federal tax authorities in connection with taxes claimed to be due from estates it was administering through employees, whether lawyers or laymen, did not engage in the illegal practice of law or violate statutes; but that each defendant in appearing and being represented, in probate court proceedings in which a hearing is required by law or in which a hearing is had...