State ex rel. Daniel v. Wells

• Decision Date: 20 October 1939
• Docket Number: 14944.
• Parties: STATE ex rel. DANIEL, Atty. Gen., et al. v. WELLS.
• Court: South Carolina Supreme Court

5 S.E.2d 181

191 S.C. 468

STATE ex rel. DANIEL, Atty. Gen., et al. v. WELLS.

No. 14944.

Supreme Court of South Carolina

October 20, 1939

John M. Daniel, Atty. Gen., Frank B. Gary, Jr., James F. Dreher and C. T. Graydon, all of Columbia, D. W. Galloway, of Spartanburg, Huger Sinkler, of Charleston, and C. G. Wyche of Greenville, for petitioners.

William Elliott, Jr., and Douglas McKay, both of Columbia, and Stephen Nettles, of Greenville, for respondent.

PER CURIAM.

This proceeding was instituted in the original jurisdiction of this Court upon petition which, briefly stated, alleged that respondent was a paid representative of the American Mutual Liability Insurance Company, which was engaged in writing insurance under the Workmen's Compensation Act of this State; that, as such representative, the respondent had on numerous occasions appeared before the individual commissioners of the South Carolina Industrial Commission had conducted hearings before such commissioners, in the course of which he filed pleadings, stated grounds, examined and cross-examined witnesses and made arguments; that such action constituted the practice of law; and that respondent was not a licensed attorney of this or any other State. Upon this petition, a rule to show cause was issued by the Chief Justice of this Court directing respondent to show cause why he should not be adjudged in contempt of Court. The return of respondent admits that he is a salaried claim adjuster employed by said Insurance Company; that, among his other duties, he appears at the hearings before the individual commissioners; and that he is not an attorney. It is further alleged that his compensation covers his general services as a claim adjuster and his services at such hearings constitute only a minor part of his duties. It further alleged that he receives for such appearances no special or additional compensation. Respondent denies that any acts of his constitute the unauthorized practice of law.

Elaborate briefs have been filed, including brief in behalf of the National Association of Mutual Casualty Companies, amicus curiae.

The major question for determination is whether an appearance before a single commissioner in hearings under the Workmen's Compensation Act of this State constitutes the practice of law.

In the determination of this question it is necessary to review the pertinent sections of the Statute establishing the South Carolina Industrial Commission and providing for hearings before single commissioners, as well as the rules adopted by the Commission for the conduct of such hearings. Under the terms of the Act, Acts of 1936, approved July 17, 1935, 39 Statutes at Large, 1231, the South Carolina Industrial Commission consists of five Commissioners who are empowered to make rules for carrying out the provisions of the Act. The Act permits, with the approval of the Commission, the employer and the injured employee to reach an agreement, but if the injured employee or his dependents and the employer fail to reach an agreement, a hearing is had in regard to the matters at issue. The hearing may be had before the Commission or any of its members. Usually such hearing is before a single member of the Commission. At such hearing the commissioner ascertains the disputed issues of law or fact, swears witnesses and takes such testimony as may be offered by the interested parties. Witnesses are examined and cross-examined by the interested parties or their representatives or by the commissioner. After the hearing, the commissioner makes an award, together with a statement of his findings of fact rulings and conclusions of law, and other matters pertinent to the issues. A complete record is made of the proceedings, including a transcript of the testimony. Any party who feels aggrieved by the award may appeal within a stipulated time to the full Commission, who is empowered to review the award and, if good grounds be shown, reconsider the evidence, receive further evidence, rehear the parties, and if it deems proper, to amend the award. Usually the hearing before the full Commission is had entirely upon the record taken before the single commissioner. The award of the single commissioner is final unless reviewed in due time, or if reviewed, the award of the full Commission is conclusive and final as to all questions of fact, with the right of either party within a stipulated time to appeal to the Circuit Court on account of any errors of law. The Court cannot review issues of fact. Any party in interest may file in the Circuit Court a certified copy of an award whereupon the Court is empowered to render judgment in accordance therewith, which has the same force and effect as any other judgment of the Circuit Court.

At this point it maybe well to refer to the pertinent statutory provisions of this State in reference to the practice of law. Section 312, Code of 1932, prohibits the practice of law in any Court of this State by any person unless admitted and sworn in as an attorney. Under subsequent sections of this chapter, no license to practice as an attorney can be granted except by this Court. A Board of Law Examiners is created to pass upon the qualifications of applicants, other than graduates of the University of South Carolina. Section 326 permits any person to represent himself, and with leave of the Court another, provided he receives no compensation.

There is no statutory provision in South Carolina defining what constitutes the practice of law. This term has been defined, however, by this Court in the case of In re Duncan, 83 S.C. 186, 65 S.E. 210, 211, 24 L.R.A., N.S., 750, 18 Ann.Cas. 657, as follows: "According to the generally understood definition of the practice of law in this country, it embraces the preparation of pleadings, and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts, and, in addition, conveyancing, the preparation of legal instruments of all kinds, and, in general, all advice to clients, and all action taken for them in matters connected with the law. An attorney at law is one who engages in any of these branches of the practice of law. The following is the concise definition given by the Supreme Court of the United States: 'Persons acting professionally in legal formalities, negotiations, or proceedings by the warrant or authority of their clients may be regarded as attorneys at law within the meaning of that designation as employed in this country."'

The question now presented has never been passed upon by this Court. The Industrial Commission has made a rule which permits only licensed attorneys to appear before the full Commission, but allows lay representation in hearings before the single commissioners. The question has been passed upon in a few other jurisdictions and these authorities are now briefly reviewed.

The facts in the case of Shortz v. Farrell, 327 Pa. 81, 193 A. 20, 21, are almost, if not entirely, similar to those in the case now before us. In that case Farrell was employed as a claim adjuster for the Globe Indemnity Company. He prepared and filed "pleadings" in workmen's compensation cases in which that company was a party defendant, and in behalf of the company, appeared at hearings before the referees, examined and cross-examined witnesses. The function of the referee under the Pennsylvania Act and that of the single commissioner under our Act is substantially the same. The Court held that such hearings were essentially of a judicial character and that the appearance at such hearings in behalf of the company constituted the practice of law. The Court further held that the preparation and filing of "pleadings" did not constitute the practice of law for the reason that such "pleadings" were so simple that legal skill was not required in the preparation of same, that they were executed on forms prepared by the Board, were elementary in character, and did not rise to the dignity of "pleadings" as that term is usually understood.

In disposing of the question, the Court said: "In considering the scope of the practice of law mere nomenclature is unimportant, as, for example, whether or not the tribunal is called a 'court,' or the controversy 'litigation.' Where the application of legal knowledge and technique is required, the activity constitutes such practice even if conducted before a so-called administrative board or commission. It is the character of the act, and not the place where it is performed, which is the decisive factor."

In the case of People ex rel. Chicago Bar Association, v. Goodman, 366 Ill. 346, 8 N.E.2d 941, 947, 111 A.L.R. 1, the Court held that one who is engaged in the business of handling, adjusting, and prosecution of workmen's compensation claims before the State Industrial Commission was engaged in the practice of law. Business was obtained by a widespread plan of solicitation and claims of injured employees were handled on a contingent basis. When difficult legal questions arose or appeals were taken to the Circuit Court, a member of the bar was employed. In discussing what acts constituted the practice of law, the Court said: "It is immaterial whether the acts which constitute the practice of law are done in an office, before a court, or before an administrative body. The character of the act done, and not the place where it is committed, is the factor which is decisive of whether it constitutes the practice of law." Petition for writ of certiorari in the above case was denied by the United States Supreme Court. 302 U.S. 728, 58 S.Ct. 49, 82 L.Ed. 562.

It was held in the case of Goodman v. Beall, 130 Ohio St 427, 200 N.E. 470, that appearances and practice before the ...