State v. Cozad

Citation16 N.W.2d 484,70 S.D. 193
Decision Date20 November 1944
Docket Number8664
PartiesSTATE OF SOUTH DAKOTA, ex rel. George A. Rice and Mose S. Lindau, Chairman of the Unauthorized Practice of Law Committee of the State Bar of South Dakota, Appellants, v. J. C. COZAD, Respondent.
CourtSupreme Court of South Dakota

Appeal from Circuit Court, Bennett County, SD

Hon A. R. Denu, Judge


Gale B. Braithwaite, Sioux Falls, SD

Attorney for Appellants.

David F. Heffron, Martin, SD

W. J. Hooper, Gregory, SD

Attorneys for Respondent.

Opinion Filed Nov 20, 1944

SMITH, Judge.

The relator, the chairman of the Unauthorized Practice of Law Committee of the State Bar, asserting authority “to bring this proceeding for and on behalf of the State Bar and the members thereof and for and on behalf of the people of the State of South Dakota,” prayed for an injunction restraining the defendant, a layman, from practicing law and for an adjudication that described conduct of defendant constituted contempt of court. By motion and by answer. the defendant asserted that the complaint, or information, “does not state facts sufficient to constitute a cause of action,” and by answer specifically denied the authority of the relator to bring the proceeding on behalf of the people of the state. The issues thus raised were considered in connection with a trial of the merits. Thereafter the learned trial court ruled against defendant on the described issues of law, but entered judgment for defendant on the merits on the theory that his evidenced conduct did not amount to the practice of law. In answer to the appeal of the plaintiff, the defendant presents the above described adverse rulings of the trial court in support of his judgment. In our opinion the exceptions of the defendant were well taken and are determinative of the appeal.

That the defendant may urge the described objections to sustain his judgment is conceded by appellant and we so hold. 5 CJS, Appeal and Error, 168, § 1498.

We think we need not pause to consider the substance of the argument of defendant in so far as it treats with the jurisdiction of the circuit court to deal with the unauthorized practice of law as contempt of court. If such is the character of the proceeding, the judgment for defendant must stand. In the case of State v. American-News Co., 62 SD 456, 253 NW 492, it was held that the right of appeal in a proceeding for a criminal contempt is governed by the statute dealing with appeals in criminal actions. In such actions, the state is not accorded a right of appeal in the instant circumstances. SDC 34.4101. If the alleged conduct constitutes contempt of the circuit court, it must be classified as a criminal contempt. State v. American-News Co., supra, and State v. Fletcher Trust Co., 211 Ind. 27, 5 NE2d 538.

The plaintiff, however, insists that the proceeding is equitable in character and that the allegation and prayer dealing with contempt were included by inadvertence. The action was instituted below by summons and complaint, and was tried as a suit for an injunction, and we review it as such.

The defendant questions (1) the availability of the equitable remedy of injunction to prevent the unauthorized practice of law, and (2) the authority of the relator to represent the state or the public.

The major premise of defendant’s argument on the ground first noted supra is that the preventive equitable jurisdiction of the circuit court is limited to the protection of property rights; its minor premise is that as the right to practice law is not a property right, the property rights of the relator, and of licensed practitioners as members of a class are not violated: and his conclusion is that neither the alleged or established facts invoke the remedy of injunction for the protection of the relator or the class he represents.

The cases which have sustained the right of individual members of the bar to the remedy of injunction to prevent the unlicensed practice of law accept defendant’s major premise but reject his minor premise. They hold that the right of a licentiate to practice his profession is a property right. Dworken v. Apartment House Owners Association of Cleveland, 38 Ohio App. 265, 176 NE 577; Land Title Abstract & Trust Co. v. Dworken et al., 129 Ohio St. 23, 193 NE 650; Unger et al. v. Landlord’s Management Corp., 114 N. J. Eq. 68, 168 A. 229; Sloan et al. v. Mitchell, 113 W. Va. 506, 168 SE 800; Paul et al. v. Stanley, 168 Wash. 371, 12 P. 2d 401; and Fitchette v. Taylor, 191 Minn. 582, 254 NW 910, 94 ALR 356. See Annotation at 94 ALR 359.

In the case of In re Hosford, 62 SD 374, 252 NW 843, 846, this court said, “First, the so-called ‘right to practice law’ is in fact not a vested or absolute ‘right,’ nor is it a property right, but rather it is a permit, license, franchise, or privilege granted upon demonstration of satisfactory moral fitness and satisfactory legal and general learning. To continue in the enjoyment of this privilege one must maintain his fitness and qualifications.” This view finds support in the other holdings of the courts. Hulbert v. Mybeck, 220 Ind. 530, 44 NE 2d 830; Wollitzer v. National Title Guaranty Co., 148 Misc. 529, 266 NYS 184; In re Casebier, 129 Kan. 853, 284 P. 611; In re Edwards, 45 Idaho 676, 266 P. 665; Cohen v. Wright, 22 Cal. 293; and Petition for Integration of Bar of Minnesota, 216 Minn. 195, 12 NW2d 515.

That the right to practice a profession is highly prized by the members of the favored class requires no demonstration. Such a license opens doors of opportunity to acquire wealth and position, as well as to experience the deep satisfactions which flow from ministering unto the most delicate and pressing needs of humanity. Through the exercise of the granted privilege one may acquire that which all will readily classify as property, viz., a business and its good will. We do not think, however, that it follows necessarily from these considerations that the right or privilege to practice constitutes property. In our opinion, it is the public purpose which motivates the particular regulatory statutes that determines whether one who gains a privilege or franchise to enter a described regulated field of endeavor is thereby clothed with a right of property in that field which he may enforce against an intruder. When it is thought that monopoly or semi-monopoly will best serve the public interest, and provision is made for a franchise to accomplish that purpose, we think it logical to conclude that it was intended that the grant of franchise should give rise to a property interest in the described field of activity, and that equity, at the instance of the grantee, should prevent unlawful invasions of such a right. See 23 AmJur 745 § 39. However, where the motivating purpose underlying the regulatory measures is but to protect the public from the unfit, and the profession or occupation is open to all who can qualify, we entertain the view that a license to enter grants no more than a person privilege, unaccompanied by a property right in the field of endeavor. It logically follows that in the one case the grant of the right gives rise to a correlative duty to the grantee on the part of those who do not hold a like franchise not to trespass; in the other case, the duty not to enter the field without a license runs solely to the public and is not correlative to the right or privilege of the licensees. Our rules, SDC 32.11 and the statutes they replace, were adopted to protect the public from the unfit, and do not seek to create a monopoly.

Holding these views, we are not justified in receding from the quoted language of In re Hosford, supra, in order that we may acquire an added means of controlling the unauthorized practice of law. See Lewis & Spelling, The Law of Injunctions, § 7, p. 9. If the members of the bar have suffered some character of special injury, preventable by our courts under their common law or statutory powers other than the purported injury we have considered, such injury has been neither pointed out by appellants nor perceived by us.

In other jurisdictions the legislatures have seen fit to invest their courts with power to enjoin such unauthorized practice at the instance of members of the profession. See State v. Fray, 214 Iowa 53, 241 NW 663, 81 ALR 286; Board of Medical Examiners v. Blair, 57 Utah 516, 196 P. 221; and Lamb et al. v. Whitaker, 171 Tenn. 485, 105 SW 2d 105.

Thus far we have ignored the title of this action and have considered it as a class action by relator on behalf of the members of the bar. Viewed in that aspect, because we are of the opinion that the complaint fails to exhibit special injury in the relator or in the class which he represents, it fails to invoke the remedy of injunction. Stated in another way, we hold that the complaint fails to show a breach of duty which defendant owes to the individual members of the bar.

We now turn to a consideration of the action as brought in the name of the state, on the relation of the relator, to prevent the breach of the duty defendant owes to the public to refrain from ,,he practice of law. This involves defendant’s second ground of challenge.

So viewed the complaint prays for an injunction on behalf of the state to protect its institutions, and to safeguard public or social interests from harm occasioned by alleged criminal conduct (see SDC 13.1255) which is not alleged to have invaded, or to threaten to invade, any property or pecuniary interest. As to the power of equity to enjoin such conduct at the instance of the state, the cases are in sharp conflict. They are collected in the annotations at 40 ALR 1145 and 91 ALR 315. On the one extreme, it has been said that even a public nuisance is beyond the reach of the preventive powers of the courts of equity in the absence of a showing of interference with property rights. Attorney General v. Utica Insurance Co., 2 Johns. Ch., NY, 371. On the other extreme, it has been asserted that...

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