State v. Buyers Service Co., Inc., No. 22730

CourtUnited States State Supreme Court of South Carolina
Writing for the CourtPER CURIAM; NESS, C.J., GREGORY and FINNEY, JJ., and RICHTER; CHANDLER
Citation357 S.E.2d 15,292 S.C. 426
PartiesSTATE of South Carolina, Appellant-Respondent, v. BUYERS SERVICE COMPANY, INC., Respondent-Appellant. . Heard
Decision Date20 January 1987
Docket NumberNo. 22730

Page 15

357 S.E.2d 15
292 S.C. 426
STATE of South Carolina, Appellant-Respondent,
v.
BUYERS SERVICE COMPANY, INC., Respondent-Appellant.
No. 22730.
Supreme Court of South Carolina.
Heard Jan. 20, 1987.
Decided June 1, 1987.

Page 16

[292 S.C. 427] Atty. Gen. T. Travis Medlock and Sr. Asst. Atty. Gen. Richard B. Kale, Jr., Columbia, for appellant-respondent.

Ray L. Derrick, of Funderburk and Derrick, Columbia, for respondent-appellant.

Edward G. Menzie, of Nexsen, Pruet, Jacobs and Pollard, Columbia, amicus curiae for South Carolina Bar.

PER CURIAM:

In this action the circuit court issued a declaratory judgment that Buyers Service Company, Inc. (Buyers Service) has illegally engaged in the practice of law. Additionally, Buyers Service was enjoined from performing future acts [292 S.C. 428] deemed to constitute the practice of law. We affirm in part and reverse in part.

FACTS

Buyers Service is a commercial title company which also assists homeowners in purchasing residential real estate. Its principal place of business is Hilton Head Island.

The State brought this action alleging Buyers Service has engaged in the unauthorized practice of law by: (1) providing reports, opinions or certificates as to the status of titles to real estate and mortgage liens; (2) preparing documents affecting title to real property; (3) handling real estate closings; (4) recording legal documents at the courthouse; and (5) advertising to the public that it may handle conveyancing and real estate closings.

Buyers Service's clients are usually prospective home purchasers referred by local real estate agents. Its general procedures for handling a real estate transaction are as follows:

After a client is referred, Buyers Service receives an executed contract of sale from the realtor. If the sale involves a mortgage, the buyer makes an application to a local lender. If the lender approves the loan, it notifies Buyers Service and sends a letter of commitment to the buyer stating the terms. Buyers Service then orders the loan package from the lender. This consists of a set of instructions, a note and mortgage, truth in lending statement, HUD-1 Statement, miscellaneous affidavits regarding employment, and other forms. The documents arrive in various degrees of completion depending upon the particular lender. Buyers Service fills in the mortgagor-mortgagee on the mortgage, the grantor-grantee on the deed, consideration, the legal description and other blank spaces.

Buyers Service sends the completed forms to the purchaser for his examination and signature. Thereafter, the lender examines the loan package and funds the loan. Buyers Service deposits the loan proceeds check in its escrow account and disburses the funds according to the HUD-1 Statement and the closing instructions. Buyers Service also prepares settlement statements after loans are closed.

When a title search is necessary, Buyers Service sends an [292 S.C. 429] employee to the courthouse to abstract the title. The purchaser pays $50 for this service. The abstract is reviewed by a non-attorney employee who determines if the seller has fee simple title to the property. Buyers Service gives purchasers a fact sheet describing three ways to hold fee simple title in South Carolina. If a purchaser has questions, an employee of Buyers Service elaborates. The purchasers then tell Buyers Service how they wish to hold title.

Subsequent to the commencement of the litigation, Buyers Service retained an attorney to review its closing documents. The

Page 17

attorney, whose name and charges appear on the settlement sheet, receives $35 for this service. Buyers Service pays this fee and passes it on to the purchaser. There is no direct contact between the attorney and the purchaser.

Buyers Service conducts closings without any attorney present. The majority are handled by mail. For these, Buyers Service sends written instructions to the parties as to the manner of signing the legal documents. When the purchaser comes to Buyers Service's office for the closing, an employee supervises the signing of the legal documents. If the purchaser has any questions, the employee answers them or refers the purchaser to the mortgage lender.

Buyers Service has legal instruments hand-carried or mailed to the courthouse for recording. It sends a form instruction letter with each set of documents but does not take responsibility for ensuring proper recording, which it maintains is the responsibility of the clerk of court.

The circuit court's order enjoins Buyers Service from the following activities:

"1. Providing reports, opinions or certificates as to the status of real estate titles to persons other than attorneys licensed to practice law in the State of South Carolina and seeking separate compensation for performing title work in connection with [Buyers Service's] title insurance business.

2. Preparing deeds, mortgages, notes and other legal instruments related to transfer of real property or mortgage loans.

3. Giving legal advice during the closing of real estate transfers or real estate mortgage loan transactions.

4. Advertising to the general public that the Defendant is [292 S.C. 430] a full-service closing company and may handle complete real estate closings, practice law, or perform any activity constituting the practice of law."

Both Buyers Service and the State have appealed.

DISCUSSION

This court in In re Duncan, 83 S.C. 186, 189, 65 S.E. 210, 211 (1909) held the practice of law includes "... conveyancing, the preparation of legal instruments of all kinds, and, in general, all advice to clients, and all action for them in matters connected with the law." See also State v. Wells, 191 S.C. 468, 5 S.E.2d 181 (1939); Matter of Easler, 275 S.C. 400, 272 S.E.2d 32 (1980). Additionally, S.C. Code Ann. § 40-5-320 (1986) strictly prohibits corporations from the practice of law.

A. Preparation of Instruments

Buyers Service contends the circuit court erred in holding it may not prepare deeds, notes and other instruments related to mortgage loans and transfers of real property. It...

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57 practice notes
  • First Escrow, Inc., In re, Nos. 72686
    • United States
    • United States State Supreme Court of Missouri
    • October 27, 1992
    ...at 733. Likewise, the Supreme Court of South Carolina essentially precluded nonlawyers from all closing activities. Buyers Service Co., 357 S.E.2d 15. This court held that not only the preparation of documents, but also the preparation of abstracts for nonattorneys, the closing of transacti......
  • In re Lucas, No. CIV.A.03-40277-WGY.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • September 30, 2004
    ...legal skill to determine whether a particular legal form will achieve a desired result, see, e.g., State v. Buyers Serv. Co., Inc., 292 S.C. 426, 430, 357 S.E.2d 15 (1987), here the form itself disclosed its effect. See Official Bankruptcy Form 6 ("NOTICE TO DEBTOR: This agreement gives up ......
  • State v. Rogers
    • United States
    • Superior Court of New Jersey
    • February 4, 1998
    ...for dissolution of marriage requires at least some degree of legal knowledge or skill"); State v. Buyers Service Co., [705 A.2d 402] Inc., 292 S.C. 426, 357 S.E.2d 15, 17 (1987) ("[P]reparation of instruments, even with preprinted forms, involves more than a mere scrivener's The challenged ......
  • Dabney v. Bank of Am., N.A (In re Dabney), Bankruptcy Case No.: 13-04227-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • October 25, 2019
    ...by counsel of the borrower at a real estate loan closing is required under South Carolina law. See State v. Buyers Serv. Co. , 292 S.C. 426, 434, 357 S.E.2d 15, 19 (1987) (holding that real estate and mortgage loan closings should be conducted only under the supervision of attorneys, who ha......
  • Request a trial to view additional results
57 cases
  • First Escrow, Inc., In re, Nos. 72686
    • United States
    • United States State Supreme Court of Missouri
    • October 27, 1992
    ...at 733. Likewise, the Supreme Court of South Carolina essentially precluded nonlawyers from all closing activities. Buyers Service Co., 357 S.E.2d 15. This court held that not only the preparation of documents, but also the preparation of abstracts for nonattorneys, the closing of transacti......
  • In re Lucas, No. CIV.A.03-40277-WGY.
    • United States
    • United States Bankruptcy Courts. First Circuit. U.S. Bankruptcy Court — District of Massachusetts
    • September 30, 2004
    ...legal skill to determine whether a particular legal form will achieve a desired result, see, e.g., State v. Buyers Serv. Co., Inc., 292 S.C. 426, 430, 357 S.E.2d 15 (1987), here the form itself disclosed its effect. See Official Bankruptcy Form 6 ("NOTICE TO DEBTOR: This agreement gives up ......
  • State v. Rogers
    • United States
    • Superior Court of New Jersey
    • February 4, 1998
    ...for dissolution of marriage requires at least some degree of legal knowledge or skill"); State v. Buyers Service Co., [705 A.2d 402] Inc., 292 S.C. 426, 357 S.E.2d 15, 17 (1987) ("[P]reparation of instruments, even with preprinted forms, involves more than a mere scrivener's The challenged ......
  • Dabney v. Bank of Am., N.A (In re Dabney), Bankruptcy Case No.: 13-04227-JW
    • United States
    • United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina
    • October 25, 2019
    ...by counsel of the borrower at a real estate loan closing is required under South Carolina law. See State v. Buyers Serv. Co. , 292 S.C. 426, 434, 357 S.E.2d 15, 19 (1987) (holding that real estate and mortgage loan closings should be conducted only under the supervision of attorneys, who ha......
  • Request a trial to view additional results

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