State ex rel. Fatzer v. Schmitt
| Decision Date | 06 June 1953 |
| Docket Number | No. 38810,38810 |
| Citation | 258 P.2d 228,174 Kan. 581 |
| Parties | STATE ex rel. FATZER, Atty. Gen. v. SCHMITT et al. |
| Court | Kansas Supreme Court |
Syllabus by the Court
The record examined in an original action in the nature of quo warranto, to determine the right and authority of defendants to engage in the practice of law, and held, that D. W. Schmitt, individually, and D. W. Schmitt, Manager, 'National Pure Trust Service, Rocky Mountain Division,' without right or authority and without being licensed so to do by this court, have been engaged in the practice of law, and are enjoined therefrom as more particularly set forth in the opinion.
C. W. Hughes, Sp. Asst. Atty. Gen., argued the cause, and Harold R. Fatzer, Atty. Gen., C. H. Hobart, Asst. Atty. Gen., and George Siefkin, of Wichita, were with him on the briefs for plaintiff.
Wm. H. Burnett, of Hutchinson, argued the cause, and Robert L. McDougal, of Denver, Colo., was with him on the briefs for defendants.
This is an original action in the nature of quo warranto commenced by the State on the relation of the Attorney General against D. W. Schmitt, individually, D. W. Schmitt, Manager, 'National Pure Trust Service, Rocky Mountain Division,' and National Pure Trust Service, organizational status unknown, to determine if the defendants have been exercising the privilege and franchise of practicing the learned profession of the law, and if so to oust and enjoin them therefrom.
The substance of the pleadings filed is as follows: In the petition it is alleged that the action is brought by the State on the relation of the attorney general and at the request of the committee on Illegal Practice of the Law of the Bar Association of the State of Kansas; that Schmitt is not now and never has been admitted to practice law in Kansas; that 'D. W. Schmitt, Manager,' is an individual, a resident of Denver, Colorado, doing business under the name and style of 'National Pure Trust Service, Rocky Mountain Division,' and Schmitt, manager, doing business as aforesaid is not now and never has been admitted to practice law in the State of Kansas. For reasons hereafter stated we do not review allegations as to defendant 'National Pure Trust Service'; that all named defendants are now and for some two years past have been unlawfully exercising or attempting to exercise the franchise and privilege of practicing law in stated cities within the State of Kansas without having complied with and in violation of the statutes and of the rules of this court; that the defendants and without having license to practice law from this court hold and have held themselves out as being ready, willing and able to pass upon the creation of trusts and trust documents, to create such trusts or cause such trusts to be created as would be legal in all respects and save the trustor the necessity of making a will as well as the expense incident to the probating thereof, to relieve the trustor from transfer taxes, as well as placing him in a more advantageous position in the distribution of profits to his family with subsequent reduction in the taxes which the trustor would otherwise have to pay upon income, and otherwise hold themselves ready, willing and able to practice law within the State of Kansas; that the defendants, without being licensed to practice law within this state, have advised with and created or caused to be created, trust indentures and purported trust indentures with named individuals at given addresses within this state, and have furnished and supplied to them and others who have employed defendants, the legal documents claimed by defendants to be necessary in the creation of such trusts and have advised such persons as to the tax consequences thereof, and agreed to furnish needed legal services during the continued existence of such trusts. The nature of the prayer has been indicated above.
Summons was issued out of this court and the return shows service on 'D. W. Schmitt individually and D. W. Schmitt, Manager National Pure Trust Service, Rocky Mountain Division.' No service was had on defendant 'National Pure Trust Service, organizational status unknown.'
D. W. Schmitt as an individual and D. W. Schmitt, Manager, National Trust Service, Rocky Mountain Division, filed an answer, denying that Schmitt has ever undertaken to practice the learned profession of the law within the State of Kansas; that he ever held himself out to be a lawyer or had attempted to exercise the franchise and privilege of an attorney at law or that he had been unlawfully practicing law at the places named in the petition; that he had ever created or caused to be created any of the trusts charged or that he agreed to furnish any legal services needed during the continuance of any such trust, or that he made any misleading or erroneous statements which would subject donors and beneficiaries to serious difficulties, litigation and tax liabilities beyond their conception and understanding at the time of the creation of the trusts. It was further pleaded at length that Schmitt is a salesman for National Pure Trust Service of Chicago, Illinois; that he is not admitted to the Bar of the State of Kansas or any other state; that he has not assumed to give advice on legal subjects; that he has sold many copyrighted 'Trust Indenture Forms' for the National Pure Trust Service of Chicago and has come in contact with many lawyers who had not made a study of pure trusts and had no experience with irrevocable trusts and who requested Schmitt to furnish them with information and that he had done so; that for the National Pure Trust Service of Chicago he had sold to the persons named in the petition a Trust Indenture form which could be used for the creation of a pure trust; that he did not supervise the execution thereof nor the transfer of property to any trust nor prepare any legal papers in connection therewith; that Schmitt is not an officer, agent or representative of National Pure Trust Service of Chicago and acts only in the capacity of a salesman, taking orders in the field, forwarding to that Service the remittance of the purchaser and being paid a commission for his services from the Chicago office. The prayer of the answer was that plaintiff's petition be denied.
After the issues had been joined, this court appointed James D. Dye, an attorney at law in this court, as a commissioner to hear the evidence and to make suggested findings of fact and conclusions of law and report to the court. Before any testimony was taken the defendant Schmitt individually filed his motion that the action be dismissed for the reasons in substance that no member of the committee on Illegal Practice of the Law of the Bar Association of the State of Kansas had made any investigation of charges against Schmitt, no complaint in writing had been made, and other similar allegations. Although both of these motions were presented to our commissioner, they ultimately came before this court for ruling and were denied.
Pursuant to our order the commissioner heard the evidence and returned into court his report containing his findings of fact and conclusions of law. For present purposes it may be said the commissioner suggested that D. W. Schmitt should be ousted and enjoined from the practice of the law. After the commissioner had filed his report the plaintiff filed its motion, in which, after directing attention to the fact that service had been had upon Schmitt in his capacity as manager, 'National Pure Trust Service, Rocky Mountain Division,' it asked that the recommendation of ouster be amended to include him in that capacity and that as so amended the report of the commissioner should be approved. Thereupon Schmitt filed a motion that the plaintiff's motion should be stricken for the asserted reasons Schmitt had not been so served, and the evidence had not been taken as though he were present in such capacity. The State's motion is allowed. We need not demonstrate that service of summons was had on Schmitt as manager further than as above shown, nor resolve whatever conflict there may have been about appearances before the commissioner for Schmitt filed an answer individually and as manager and is in court in both capacities.
Schmitt also filed a motion that certain of the suggested findings of fact and conclusions of law contained in the commissioner's report be set aside. This motion is not only long, but argumentative in character. In essence, what is later said herein justifies our ruling that the motion should be and it is denied.
The cause is now for determination on the State's motion that D. W. Schmitt individually and D. W. Schmitt, Manager, 'National Pure Trust Service, Rocky Mountain Division,' be ousted and enjoined from the practice of law within this state. We recognize the rule contended for by the defendants that in an original proceedings in this court, the findings and conclusions of our commissioner are advisory only and that it is our duty to examine the record and...
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