Washington State Bar Ass'n v. Washington Ass'n of Realtors, 31633

Decision Date19 December 1952
Docket NumberNo. 31633,31633
Citation41 Wn.2d 697,251 P.2d 619
PartiesWASHINGTON STATE BAR ASS'N, v. WASHINGTON ASS'N OF REALTORS at al.
CourtWashington Supreme Court

F. L. Stotler, Colfax, A. V. Stoneman, Counsel, Washington State Bar Ass'n, Auburn and Seattle, for appellant.

Peyser, Cartano, Botzer & Chapman, Seattle, Olson & Palmer, Yakima, for respondents.

OLSON, Justice.

The question presented by plaintiff's appeal from a decree dismissing its action, is whether or not a licensed real estate broker should be restrained from doing certain work of a legal nature.

By rulings of the trial court, which are not challenged, the scope of this case has been narrowed, since its inception as an action against all licensed real estate brokers in the state, until it now involves but one defendant, C. K. Worrell. He is a licensed real estate broker engaged in business in Yakima. Plaintiff alleged that he had prepared seven legal instruments, two real-estate purchase contracts and five deeds. He denies that he prepared the contracts in question, but admits that he has filled the blanks in legal forms to make such contracts on other occasions. He does not question the finding of the trial court that four deeds in evidence were prepared under his supervision and direction, by the completion of printed forms of statutory warranty deed supplied to him by a title insurance company. Each legal instrument drawn by defendant pertained to a transaction negotiated through his office.

One of the deeds, known as the Voeller-Newman deed, is of primary concern to us. This language appears in it, following the property description:

'Subject: To a $4,000 mortgage held by Public Service Life, Health and Accident Company.

'A mortgage of $850.00.'

The trial court found, and defendant now concedes, that he was doing work of a legal nature when he prepared these deeds. But he contends that, because he received no compensation for their preparation beyond his usual broker's commission for the real-estate transactions, he has not violated the statute, RCW 2.48.190, cf. Rem.Rev.Stat. § 139-4, proscribing the doing of 'work of a legal nature for compensation' by one not admitted to practice law in this state, and that his activities are not within the later statute, RCW 2.48.180 (cf. Rem.Rev.Stat. § 138-14, a section of the integrated bar act) providing a penalty for the unlawful practice of law.

The success of this action does not depend upon proof of defendant's violation of any statute. It is not a criminal prosecution. It is an action in equity. The prayer is not that we find that defendant is in contempt and impose a penalty upon him, but is that he be restrained from doing work of a legal nature in the future. Such relief does not require legislative sanction, and we need not discuss or decide the application or present effectiveness of either statute, or whether the second statute cited repealed the first. If we are to grant an injunction in this case, we must do so by the exercise of our inherent judicial power.

Defendant does not question, and no citation of authority is necessary to establish, the possession of this power by this court. Its possession imposes a duty upon the court to protect the public, by a proper decree, from the activities of those who, because of lack of professional skill, may cause injury, whether they be members of the bar or persons never qualified for or admitted to the bar.

The probability of injurious consequences from the acts of the unskilled, is shown by the constant stream of litigation arising from this source. These consequences are not made less probable, nor are their results less severe, because the unskilled are not paid for their services. The same harm can be caused whether the work be done gratuitously or for a fee. The nature and character of the service rendered, rather than the fact of compensation for it, should govern its classification and relation to the public interest.

A legislative act which purports to permit gratuitous work of a legal nature by the unskilled or unqualified, can impose no restriction upon the power of the court to grant an injunction, if the court determines that the continuation of such work is, in fact, against the public interest. Such an act might well be viewed as a statement of the minimum requirement for an action at law for relief against the proscribed activities. It is not a maximum requirement that divests the court of jurisdiction or precludes its action in an equitable proceeding. If the legal relief based upon such a statute is inadequate to protect the public, the aid of a court of equity may be sought, and its powers should be invoked for that purpose. Then an action such as this is brought on behalf of the public, it is not one in which the right of an individual plaintiff is concerned. Consequently, no pecuniary or property interest of the plaintiff need be involved to justify the entry of a decree restraining the defendant from continuing improper actions.

This power is one which the court exercises with reluctance and only when its duty to do so is clear, in order that the public interest be protected. Each case must rest upon its own facts.

Considering particularly the Voeller-Newman deed in evidence in this case, the agreement of the parties and their liability regarding the mortgages cannot be told from the face of the instrument. The grantees testified that they did not know the legal consequences of the document. Defendant, in the preparation of this deed, failed to recognize the dangers inherent in the situation or, if he recognized them, failed to provide against them by accurate legal draftsmanship. The fact that the form of deed he used may have been proper or approved by statute or counsel, is not a justification for defendant's action. Any legal form must be adapted skillfully to the transaction for which it is used, so that it expresses the agreement of the parties and defines their rights and obligations. Doing this is work of a legal nature, and, when it is done by one unqualified, we not only cannot condone its continuance but we must act to prevent it, whether or not it is done for compensation.

Defendant relies, and the trial court based its ruling, upon the limitation which this court placed in the decree in Paul v. Stanley, 1932, 168 Wash. 371, 12 P.2d 401, discussed in 8 Wash.L.Rev. 33. The defendant in that case was restrained from doing work of a legal nature only if that work was done for compensation. The court construed, and placed its reliance upon, the statute, RCW 2.48.190, cf. Rem.Rev.Stat. § 139-4, and not upon the exercise of its inherent power. However, for the reasons expressed in the case at bar, we now depart from that decision and, in so far as it is inconsistent with this opinion, it is overruled.

Many cases from other jurisdictions, bearing upon the problem presented by this case, have been cited to us, and we have found many others in our research. There is a division in these authorities, and we decline to refer to or rely upon any of them, because the problem is one which each court must resolve as it deems proper.

There are many propositions inherent in a case of this nature which influence its decision. We feel obliged to mention them, but we do not need to discuss them. Among these are: The representation of qualification and competence to do work of a legal nature and to advise upon that subject, which is implicit in the preparation of any legal document by the selection and completion of a blank form, the ethical problems arising from the fact that the legal draftsman acted for both parties to the transaction, and the fact that there is no simple legal instrument which necessarily can be differentiated from a complex one, so that its preparation by an unqualified person can be justified.

Upon the issues as they are presented to us in this case, we need not decide what activities are or are not included in the term, 'practice of law,' and it is not necessary that we attempt to define that term. Nor is there any issue here regarding the right of a lay person to prepare legal documents incident to transactions to which that person is a party, such as the preparation of earnest-money receipts by real-estate brokers on standard forms or otherwise.

Because of our decision not to adhere to the limitation imposed by Paul v. Stanley, supra, and the narrowed issues and diminished scope of the case at bar, and our reluctance to exercise our inherent power except when necessary, and then only with prudence, we are of the opinion that the relief granted in this case must be quite restricted. It shall restrain the defendant from doing the specific kind of work of a legal nature evidenced by the preparation of the Voeller-Newman deed. We intend that the nature of this decree in this regard shall not necessarily define the terms of any decrees to be entered in any cases of this type which may arise in the future. The decree shall further provide that it shall be effective whether or not the defendant receives any compensation for such work.

The judgment is reversed, and the cause remanded to the trial court, with instructions to enter a decree consistent with this opinion.

SCHWELLENBACH, C. J., and MALLERY and WEAVER, JJ., concur.

HILL, HAMLEY and FINLEY, JJ., concur in the result.

Page 717

GRADY, J., not participating.

DONWORTH, Justice (concurring in the result).

I am in accord with the result of the majority opinion so far as it goes but I feel that it does not adequately protect the public from the unauthorized practice of law by respondent.

The trial court found that respondent prepared for others two types of legal instruments:

(1) The Voeller-Newman deed (in which he attempted to define certain legal rights in connection with mortgages).

(2) Three other deeds (in which he merely filled in the names of the parties, the legal description of...

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