Touchy v. Houston Legal Foundation

• Decision Date: 22 June 1967
• Docket Number: No. 4636,4636
• Citation: 417 S.W.2d 625
• Parties: Hugo A. TOUCHY et al., Appellants, v. HOUSTON LEGAL FOUNDATION, Appellee. . Waco
• Court: Texas Court of Appeals

Page 625

417 S.W.2d 625

Hugo A. TOUCHY et al., Appellants, v. HOUSTON LEGAL FOUNDATION, Appellee.

No. 4636.

Court of Civil Appeals of Texas Waco.

June 22, 1967.

Rehearing Denied July 13, 1967.

Fred W. Robinson, Herbert Finkelstein, Houston, for appellants.

Leroy Jeffers, Curtiss Brown, Houston, for appellee.

OPINION

WILSON, Justice.

Appellants are four licensed Texas attorneys and a corporation composed of practicing lawyers. A motion for summary judgment and a plea in abatement were sustained, and judgment was rendered dismissing their action seeking an injunction against the Houston Legal Foundation. The record on which the trial court acted consists of the pleadings, a verified motion, a verified reply and an affidavit.

Houston Legal Foundation, it was alleged, is a charitable corporation which has been designated agent in the Houston and Harris County area for the Federal free legal aid program under the Office of Economic Opportunity. The record reflects its functions as the agency through which persons considered by the Foundation to be indigent may have attorneys made available in civil and criminal matters. It operates also, or serves in connection with a Lawyers Referral Service.

The petition alleged the Foundation was engaged in the corporate practice of law in violation of Art. 320a--1, Sec. 3, Vernon's Ann.Civ.Stat., 'rendering general legal services to all members of the public who, in its estimation, meet certain qualifications'; that it employs lawyers, investigators and a staff for its offices; that it provides legal services, gives legal advice, drafts legal instruments and appears in court; that it advertises its services, 'actively soliciting business and stirring up litigation'; that it operates a subsidiary organization known as the Lawyers Referral Service which maintains a list of member attorneys; that applicants whose requests for free legal services are not accepted are referred to the Service; that unless attorneys pay dues to the Foundation as members of the Service they are denied references of applications for legal aid; that the Foundation represents both sides of controversies, resulting in conflicts of interest; that it regularly approaches prisoners without request to advise them of legal rights and offer free representation, whereby 'numerous prisoners who could have paid a fee' fail to employ private attorneys.

It was alleged the Foundation 'causes private attorneys to be assigned, involuntarily, for a nominal fee'; that the bulk of its legal matters are in the field of domestic relations law, many of which would have been handled by private attorneys, who cannot ethically compete with the Foundation. The prayer was to enjoin the Foundation from engaging in the enumerated activities.

Appellee's motion for summary judgment and plea in abatement, asserted that it was a charitable society incorporated as a non-profit corporation for the purpose of providing or assisting in the providing of attorneys for the indigent; and under Canon 32 of the Texas Canons of Ethics it is not an 'intermediary', and could not be engaged in unethical or unauthorized practice of law, the only type of activities characterized by the pleadings. It also pleaded that plaintiffs have no standing or justiciable interest because exclusive authority to maintain an action alleging unethical practices is vested exclusively in the State Bar of Texas in accordance with established statutory grievance procedures; and such an action must be directed against individual members of the State Bar of Texas. Other grounds not necessary to relate were pleaded.

The Foundation's motion for summary judgment also stated it began and continued operation with grants from several private charitable foundations, from the Federal Government and the United Fund; that it is governed by trustees who are members of the Bar; that twenty-three full-time attorneys in ten offices in the county render legal assistance to indigents, and the attorneys engaged in the Foundation's civil program provide legal services without charge. Attorneys for appointment in criminal cases are recommended to the courts.

The Lawyer Referral Service, it was alleged, is similar to that in over 200 other communities, whereby attorneys agree to serve clients sent to them by the referral service; that the Service informs people of its existence; that any qualified lawyer who pays a subscription fee is eligible to join the Service; that referrals are made on a rotation basis, the purpose being to bring together people with legal problems and members of the legal profession, as encouraged by the State Bar of Texas and American Bar Association Committees on Lawyer Referral Service; and to improve relations between the Bar and the public. Other details of the system are outlined in appellee's verified pleading, and an extended statement of principles adopted by the Foundation, including its governmental structure, is attached as an exhibit. Judges and attorneys of Harris County serve as Foundation trustees. The activities of the Foundation are administered by a director who supervises a criminal division, a civil division, and the referral service.

Art. 320a--1, Vernon's Ann.Civ.Stat., the State Bar Act, provides that all persons licensed to practice law are members of the State Bar, and all persons not members 'are hereby prohibited from practicing law in this State.'

Canon 32 of the State Bar of Texas Canons of Ethics, as material here, reads:

'Intermediaries. The professional services of a member shall not be controlled or exploited by any lay agency, personal or corporate, which...