Grand Rapids Bar Ass'n v. Denkema ( 1939 )

Because of the character of quotations made with seeming approval by Mr. Justice POTTER from cases adjudicated in other jurisdictions defining what constitutes the practice of law, I cannot unqualifiedly subscribe to the opinion written by him. Recently we said:

"Even if possible, it is not practical or advisable to attempt specific definition of 'practice of law.' The few efforts to do so have added little to general characterization." Detroit Bar Association v. Union GuardianTrust Co., 282 Mich. 216, 220.

Because of the difficulty of definition, in each case, especially a borderline case, the question of whether there is unauthorized practice of law should be determined in the light of facts therein presented. And in this connection distinction may well be made between mere isolated activities or transactions and a regular course of business engaged in by one charged with unauthorized practice of law. I cannot unqualifiedly approve my Brother's quotations from other jurisdictions which hold that the practice of law includes "drawing agreements," "conveyancing," and "preparation of contracts;" nor do I agree with my Brother's holding that "the preparation of conveyances of real estate and personal property by the defendant for others for a consideration comes within the usual and ordinary definition of 'practice of law;' " or that defendant may not prepare the papers incident to the transactions of his own business as a loan broker.

If no one but a licensed attorney may lawfully draw an agreement or prepare a contract, then the bank clerk who prepares a simple promissory note for a customer to sign is guilty of unauthorized practice of law. Likewise, in event a farmer desires to agree with a grain purchaser that the former will sell his crop to the latter at a fixed price and the memorandum of such transaction, which amounts to a contract, is prepared by the grain buyer's clerk, he too is guilty of unauthorized practice of law. It is fitting that courts should be zealous in protecting the legal fraternity in its exclusive right to practice law. But is is more than probable that excessive zeal along this line resulting in absurd decisions will be boomerangs producing legislation which will materially narrow, instead of widening, the present field of the practice of law in which attorneys now have the exclusive right to function. Because of the character of this litigation we should avoid generalization and be content with decision of the specific questions herein presented by appellant.

(1) The trial court restrained defendant from "practicing law" and "performing legal services for and giving advice to others in Michigan." If proper construction is given to the words "legal services" and "legal advice" as used in this decree, these restraining provisions are proper. But instead of being couched in these general and indefinite terms, the restraining provisions of the decree should be specific and confined to the particular issues upon which plaintiffs have prevailed. The noted general and indefinite provisions should either be eliminated from the decree or restricted in their operation to the other specific restraining provisions of the decree.

(2) The trial court also restrained defendant from preparing and filing papers in connection with the probate of estates and from appearing in probate court for the purpose of obtaining orders and decrees, except in cases wherein defendant was acting as guardian, administrator, executor or trustee; and from advising persons in connection with the probating of estates. The record in this case justified the court in so decreeing.

(3) The trial court likewise enjoined defendant from "drafting any proposed will or trust agreement or proposed form, outline or suggestion thereof for another." There was no occasion for enjoining defendant from drafting a proposed will or trust agreement, because the undisputed testimony is that defendant had not engaged in this type of business for a number of years preceding institution of this suit. He should not be enjoined from doing something which he has neither done nor contemplates doing.

"A court cannot entertain an injunction bill simply because no material injury would accrue to defendants by the injunction; but, on the contrary, the court requires in all cases a sufficient showing to be made of threatened injury entitling the complainant to equitable relief." Bates v. Cityof Hastings, 145 Mich. 574, 583.

See, also, Dutch Cookie Machine Co. v. Vande Vrede, 289 Mich. 272.

But, for reasons expressed by my Brother, appellant properly was restrained from acting in the regular course of his business as an intermediary between attorneys and clients in the preparation of wills.Hightower v. Detroit Edison Co., 262 Mich. 1 (86 A.L.R. 509);Detroit Bar Ass'n v. Union Guardian Trust Co., supra.

(4) By the decree entered in circuit court defendant is also restrained from "examining and giving opinions on abstracts of title of real property." Neither in his "reasons and grounds for appeal" nor in a "statement of questions involved" (Court Rule No. 67, § 1 [1933]), does appellant complain of this provision in the circuit court's decree. Hence there is no occasion for its consideration or modification on this appeal.

(5) By the remaining provision of his decree the circuit judge restrained defendant from preparing for others instruments incidental to the sale, leasing or mortgaging of real estate, "except in cases in which you are one of the parties in interest." The acts enumerated in this paragraph do not constitute practice of law notwithstanding they are performed by one who is not an attorney; provided, as is the fact in the instant case, the enumerated activities are merely incidental to such person's principal business.

In this connection it may be noted that by plain and necessary implication the legislature of this State has indicated that the business of conveyancing is not the practice of law. The statute which regulates licensing of real estate brokers and salesmen provides that applicants for such licenses shall be required to pass an examination showing that the applicant has "a fair understanding of the laws and principles of real estate conveyancing, deeds, mortgages, land contracts, leases." 2 Comp. Laws 1929, § 9813; and as amended by Act No. 148, Pub. Acts 1931 (Comp. Laws Supp. 1935, § 9813, Stat. Ann. § 19.798). Surely the legislature when embodying such a provision in the statute could not have understood that conveyancing was a business or activity which could not be carried on by realtors, but instead only by licensed attorneys. Further, it appears from this record that the legislature in passing various amendments to the law governing realtors (see Act No. 188, Pub. Acts 1937) refused to embody therein the following: "That a real estate salesman shall not draft or prepare any such papers," i.e., papers incidental to transactions consummated in his office. House Bill No. 349, Session 1937-1938.

This portion of the decree can be sustained only by holding that it is unlawful for one not admitted to the practice of law to do conveyancing, even though it is incidental to his principal business; as in the instant case conveyancing is a natural incident to defendant's business of making loans. The decree excepts from this provision only transactions to which defendant is a party in interest. Under like injunctive decrees one not admitted to the practice of law would be deprived of the right that has always existed in this State to draft deeds, mortgages, leases, et cetera, when doing so was only incidental to one's principal business. It was pointed out in Detroit BarAssociation v. Union Guardian Trust Co., supra, quoting from Inre Cannon, 206 Wis. 374, 395 (240 N.W. 441) that:

"The legislature may establish such qualifications as it chooses for those who are permitted to act as conveyancers, examiners of title, organizers of corporations, or any other type of legal services which does not give them power to influence the course of justice as administered by the courts."

There are numerous decisions holding that conveyance by a layman when carried on only incident to his principal business is not unauthorized practice of law.

"The drafting and execution of legal instruments is a necessary concomitant of many businesses and cannot be considered unlawful. Such practice only falls within the prohibition of the act [forbidding unauthorized practice of law] when the documents are drawn in relation to matters in no manner connected with the immediate business of the person preparing them, and when the person so drafting them is not a member of the bar and holds himself out as specially qualified and competent to do that type of work. A real estate broker is not prohibited from drawing a deed of conveyance, or other appropriate instrument relating to property of which he or his associates have negotiated a sale or lease. As stated in the concurring opinion of Pound, J., in People v. Title Guarantee Trust Co., 227 N.Y. 366, 380 (125 N.E. 666, 670): 'The preparation of the legal papers may be ancillary to the daily business of the actor or it may be the business itself. The emphasis may be upon the services of the broker or the business of the trader or it may be upon the practice of law.' " Childs v. Smeltzer, 315 Pa. 9, 14 (171 A. 883).

See, also, People v. Title Guarantee Trust Co., 227 N.Y. 366 (125 N.E. 666), which reviews the decision of the lower court reported in 180 App. Div. 648 (168 N.Y. Supp. 278); Cain v. Merchants National Bank Trust Co., 66 N.D. 746 (268 N.W. 719).

Courts ought not to attempt to extend the exercise of their inherent powers controlling the practice of law so as to include activities which are clearly more appropriately the subject of legislative regulation. Government by injunction should be limited to its proper scope and field. It should not be extended to phases of human activity which are more properly subject to control by the legislature. The test of whether the control or regulation of an activity said to constitute the practice of law is one exclusively within the inherent powers of a court is whether or not it in any way tends to impair the ability of the court to function properly. In deciding the application for a reconsideration of our denial of a rehearing in Detroit BarAss'n v. Union Guardian Trust Co., 282 Mich. 707, we said:

"Our Constitution has vested the courts with inherent power to regulate the practice of law to the extent that is reasonably necessary for their proper functioning. Legislative regulation is unconstitutional when, and only when, it tends to impair the proper administration of judicial functions."

Plaintiffs herein are not basing any claim of right to relief on any legislative enactment expressly restricting or forbidding defendant as a layman from engaging in preparation of instruments of conveyance. Therefore the injunctive relief to which plaintiffs are entitled is limited to such as the court may properly grant by reason of its inherent power to preserve its own ability to function. The trial court exceeded its inherent powers and was in error in decreeing injunctive relief whereby defendant was enjoined from preparing deeds, mortgages, leases of real estate, et cetera, as incidental to his loan business. Doing so clearly has nothing whatever to do with and in no way tends to impair the proper administration of judicial functions."

Our decision herein as to conveyancing is restricted to the facts of the instant case wherein such activity was carried on by defendant incident to his principal business. We do not pass upon the question of whether conveyancing or drafting contracts when carried on as an independent business is or is not the practice of law. The decree entered in the trial court should be modified in accordance herewith. Neither party has fully prevailed on this appeal and no costs are awarded.

WIEST, J., concurred with NORTH, J. BUTZEL, C.J., did not sit.