People v. Title Guarantee & Trust Co.

The appellant, originally incorporated under another name, was authorized ‘‘ to guarantee bonds and mortgages and titles to real estate; ” and “ to make and cause to be made and to purchase and to pay for all such searches, abstracts, indices, maps and copies of records as the trustees thereof may deem necessary,” and for a long time has been engaged in the prosecution of this business.

It has been convicted of a violation of section 280 of- the Penal Law prohibiting the practice of law and rendition or legal services by a corporation and of which section the presently material provisions read as follows: “ It shall be unlawful for any corporation * * * to hold itself out to the public as being entitled to practice law, or to render or furnish legal services or advice, or to furnish attorneys or counsel or to render legal services of any kind in actions or proceedings of

The evidence upon which if at all the conviction of appellant must rest is in substance as follows:

Appellant printed and kept for distribution a booklet of which the cover and each page were entitled “ Fees for the Examination of Titles.”- There was contained in it the statement, “ In all counties, fees for drawing and recording papers and fees for surveys are in addition to the regular charges. Survey charges are found on pages 11—28 and charges for drawing and recording papers on pages 29 and 30.” On page 29, which had the additional heading, “ Average Charges for Drawing Papers,” was found the item, “ Bill of Sale (Brooklyn & Queens) $3.00.”

On the occasion of the commission of its alleged offense two detectives employed for that purpose visited the appellant’s place of business in Brooklyn. Following directions given in answer to their inquiries they came to one of appellant’s employees, to whom one of the detectives explained that he was selling a store to the other for a given sum, of which part was to be paid in cash, and that he desired a bill of sale and chattel mortgage to be drawn. He gave to appellant’s employee, in response to his request therefor, a list of the merchandise which it was .claimed was involved. This employee then passed the detectives to another employee, who took and filled out in pencil blank forms of a chattel mortgage and bill of sale, which do not appear to have been prepared by the appellant, and gave them to a stenographer to be finally filled out. This stenographer returned them to the last employee, who looked them over, placed a seal on them, inquired the rate

There was evidence that on some subsequent occasion some employee of appellant prepared some other instrument of the same general kind as those involved in this proceeding.

In the consideration of the substantial and final question presented to us we can readily eliminate certain provisions of the statute and certain questions of evidence which have been a subject of discussion. Manifestly the provision in the statute that it “ shall not apply to any corporation * * * lawfully engaged in the examination and insuring of titles to real property ” is not to be taken literally. So far as concerns this case, small controversy if any arises in respect of its meaning. On the one side it is not seriously denied that it would permit appellant, or save to it the right, to do the acts which are involved here if they were an incident to its business and were necessary to place in insurable condition a title which was submitted to it for guaranty. On the other hand, it is not argued that it would enable appellant to prepare the instruments which on this occasion it did prepare if they were not thus incidental to and connected with the conduct of its authorized business, and were otherwise prohibited.

Under this interpretation of its powers we think that the evidence furnished by the booklet referred to is ineffective to sustain the present conviction. We think that in the light of all of the evidence derived from this booklet the price advertised for drawing hills of sale is to be regarded as applicable to those which might be lawfully prepared as an incident to its regular business and is not to be regarded as an advertisement holding out the appellant as soliciting and engaged in the business of drawing bills of sale in such manner as would amount to the practice of law. Also, in the view which we take, the evidence that subsequently a similar instrument was prepared by appellant’s employees is of no importance. We

So, stripped of inconclusive features and freed from unsupported claims of evidence, and eliminating any consideration of the principle of ultra vires, the bare and decisive inquiry becomes whether a corporation which, without giving any advice leading to and consummated therein, prepares a bill-of sale and chattel mortgage by filling out blanks upon and in accordance with the specific direction of a purported customer is rendering legal services or holding itself out as entitled to practice law. Under the circumstances of this case the general inquiry really is reduced to the narrow one whether this amounted to rendering legal services, for, as we have pointed out, there is no evidence that the appellant held itself out as entitled to practice law unless it did so by performing legal services whereby law would be practiced. I think that a negative answer must be given to this inquiry.

In approaching the decision of the question and at the outset we ought to consider what must have been the purpose of the ■ Legislature in enacting the statute. That purpose seems obvious. There are certain fundamental requirements and . features which, according to our conception in this state, attend and surround the practice of law and rendition of truly legal services. These are .the possession of sufficient knowledge and skill, the existence of a relationship of trust and confidence upon which the client may securely rely, and the power of courts to use summary proceeding if necessary to enforce on the part of the attorney observance of the obligations and duties growing out of this relationship. A corporation could not adequately comply with and subject itself to these requirements if there were no penal statute. Through the employment of attorneys as its agents it might fairly meet the requirements of knowledge, skill and ordinary legal responsibility, but it could

On the other hand, no convincing reason is suggested why a corporation should be punished for performing an act which because of simplicity and lack of confidential character it has not been thought necessary to confide to the exclusive care of attorneys, but which may be performed by a layman. Not only common sense, but the wording of the statute itself, dictates this view. This appears in that amendment to the statute which, after provisions that the section should not apply to corporations in certain cases, reads: “ But no corporation shall be permitted to render any services which cannot lawfully be rendered by a person not admitted to practice law in this state.” This sentence characterizes the purpose of the entire statute and outlines the final test. Various direct and specific prohibitions and exceptions conducive of special exceptions like that applicable to appellant have been enacted, but in the end avc come to the controlling declaration that whatever else

Thus, in the light of this apparent purpose of the statute, and in the absence of specific definitions, it seems that the best and controlling test by which to determine whether the given acts constituted practice of law or rendition of legal services is by the answer to be given to the underlying inquiry whether such acts were ones which had been committed to the exclusive charge of attorneys or were those which might be performed by a layman. In this inquiry I do not regard it as decisive that an act is one which is commonly performed by an attorney. That might be a matter of habit or convenience. The inquiry is rather whether it is one which might lawfully be performed by a layman. This is to be decided by the nature of the act and not by the identity of the individual who most frequently performs it. That in effect has been determined many times when the courts have refused to lay their hands summarily upon an attorney for the purpose of correcting transgressions in a transaction which was not undertaken by him in his character of attorney.

The appellant has argued with much vigor and learning the proposition that notaries public and scriveners in foreign countries, especially England, without being admitted to the bar, from time immemorial have been permitted to do conveyancing, and from these historical facts draws the conclusion that by analogy notaries public and laymen are entitled to draw conveyances in this state. The history of notaries and scriveners does somewhat support this view. While these men were compelled to prepare for their avocation and their admission and practices were subject to rules and regulations they nevertheless were not fully admitted members of the legal pro

But I think there is a stronger argument in favor of the contention that a layman at the time of these occurrences was permitted to draw such simple instruments as those here involved were without being subject to criminal punishment.

We may take judicial notice of a widespread custom which has prevailed from time out of memory in this state, and doing so we know that laymen have been accustomed to draw such instruments, not merely as a matter of accommodation for friends- and neighbors, but for pay. It probably would not be too much to say that in many rural communities more were drawn by laymen than by attorneys, and of course if it was lawful for a layman to draw such an instrument in such a community it was also lawful in a more urban one. While the Legislature might differentiate those conditions, we could not. Moreover, such practice has not been confined to such communities. We know that in cities constantly men engaged in the real estate business and banks have prepared for their customers such instruments without doubt or criticism.

The Legislature, when it enacted not only section 280 of the Penal Law, which we have been considering, but also section, 270, ¡relating to the practice of law by an individual without being admitted and registered, was charged with the same knowledge of prevailing customs and practices with which we are chargeable. Its members knew, oftentimes doubtless by practical and personal observation and experience, that laymen throughout the state were rendering such services as are here involved. Not only by practice and custom but by inherent privilege they had the right to do this unless forbidden by statute, and if the Legislature intended to prohibit a widespread practice and establish a new rule it was its duty to say so

When subsequently the Legislature, chargeable with knowledge of this practice and of the fact that under the enactment of section 270 of the Penal Code it was still permissible for a layman to draw such an instrument, enacted section 280 for the purpose and in the language and with the qualifications which we have mentioned, we do not think it would be a fair or reasonable interpretation to hold that it intended to prevent a corporation from drawing a simple bill of sale or chattel mortgage which from a legal standpoint could have been drawn by any layman in the state. It was easy to cover and prohibit such transactions if so intended, and we do not think that we should strain to discover such intention in the absence of some language clearly expressing it.

In seeking to reach a proper decision of the question before us we ought not to ignore considerations of public convenience

We appreciate also that it may be difficult to draw a logical and satisfactory dividing line under the statute between such acts as are before us and some other one. It very well may be that the difference is so marked between the transaction of

In conclusion, what I have said is not to be interpreted. in any manner as the expression of an opinion upon the question which would arise if a corporation by words or acts should hold itself out as engaged in the business of preparing instruments of the character involved in this proceeding or other-ones and should so do. In the case of People v. Alfani, decided herewith, we have held that a layman, by holding himself out as engaged in the preparation of legal instruments and by giving advice in connection with their execution, furnished evidence by which he could be convicted of holding himself out to the public as being entitled to practice law in violation of section 270 of the Penal Law. It is quite possible that a corporation by some such conduct might furnish evidence whereby it could be convicted of a violation of the statute relating to corporations. That question does not seem to me to be presented by the present case, and therefore has not been considered.

For these reasons the judgments should be reversed' and the information dismissed. ;

I agree that the people have failed to make out a case, but I desire to add a few words to make clear the reasons by which I have reached that conclusion.

Much may be said on the historical distinction between lawyers and scriveners and notaries, as has been admirably

In the case before 'us I think that the defendant may not; make it a business to prepare even simple legal papers for all who apply, independently of its chartered powers. The corporation is not, however, chargeable criminally for the isolated act of its employees, as here charged, which might well occur otherwise than as an incident of a general practice. On the evidence it does not hold itself out as preparing legal instruments generally, but only in connection with its legitimate business.

For these reasons, I concur in the result that the judgment should be reversed and the information dismissed.

I agree with the chief judge in this case, but desire to express my reasons for so doing. In my judgment the Title Guarantee and Trust Company could draw any papers or legal instruments necessary or incident to its chartered powers; that is, it could draw a chattel mortgage in connection with its closing of a title or the placing of a mortgage. This is not prohibited by section 280 of the Penal Law. The little pamphlet or circular showing a list of prices for drawing papers must be taken at its face value in the absence of other evidence and

In the first place, the company disavows any intention or attempt to conduct a business of drawing papers, whether legal instruments or otherwise, disassociated from its regular and ordinary business.

Section 280 of the Penal Law makes it unlawful for any corporation to do the following:

1. To practice as an attorney at law in any court.

2. To make it a business to practice as an attorney at law in any court.

- 3. To hold itself out to practice law or to render legal services.

4. To furnish attorneys.

5. To render legal services in any way or manner.

6. In any other manner to assume to he entitled to practice law.

■ The aim of this section is at a practice or a business to do the prohibited act. The single occurrence is not the evil sought to be prohibited. The words “ to render legal services of any kind in any way or manner ” must be read in connection with the whole provision and have reference to a practice or a business of rendering legal services in any manner. Should the defendant advertise or conduct a business of drawing chattel mortgages or legal papers unconnected with its other authorized work it would be violating this laiv and be guilty of a misdemeanor.

dissents upon the ground that accepting, as he does, the conception of legal services embodied in Judge Pound’s opinion, he believes that there was evidence before the triers of the facts sufficient to sustain the finding of a vio

Judgments reversed, etc.