State Ex Rel. Seawell v. Carolina Motor Club, Inc.

Devin, J. The question presented to this Court for decision is whether the particular acts and methods of business of the defendants, as charged in the complaint and found by the court below, constitute a violation of the statute prohibiting the practice of law by unauthorized persons, and particularly by corporations and associations; and are such as to entitle the plaintiff to injunctive relief. By chapter 15Y, Acts 1931 (C. S., 199-a) it is made unlawful for any corporation, person, or association, except members of the bar of North Carolina, admitted and licensed to practice as attorneys at law, “to appear as attorney or counsellor at law in any action or proceeding in any court; to maintain, conduct, or defend the same, except in his own behalf as a party thereto; or, by word, sign, letter, or advertisement, to hold out himself, or themselves, as competent or qualified to give legal advice or counsel, or to prepare legal documents, or as being engaged in advising or counselling in law or acting as attorney or counsellor at law, or in furnishing the services of a lawyer or lawyers.” It *631 is made unlawful “for any person or association of persons, except members of the bar, for a fee or any consideration, to give legal advice or counsel, perform for, or furnish to another legal service.” And the statute further authorizes the solicitor, upon application of any member of the bar or any bar association, to bring action in the name of the State to enjoin such person, corporation, or association from violating the provisions of this act. C. S., 199 (a). Fitchette v. Taylor, 254 N. W., 910. The right to practice law is not a natural one. Subject to constitutional restrictions and limitations, the Legislature has the power to prescribe the qualifications and establish the rules and regulations under which citizens may enter upon and continue in the professional practice of the law. In re Applicants for License, 143 N. C., 1. The statute in question offends neither the State nor Federal Constitution. Berk v. State, 225 Ala., 324. A corporation cannot lawfully practice law. It is a personal right of the individual, obtained by diligent study and good conduct, cannot be delegated or assigned and dies with him. Since a corporation cannot practice law directly, it cannot do so indirectly by employing lawyers to practice for it. Re Co-operative Law Co., 198 N. Y., 479, 32 L. R. A. (N. S.), 55; State ex rel. Lundin v. Merchants Pro. Corp., 105 Wash., 12; Photo Eng. Co. v. Schonert, 95 N. J. Eq., 12; Re George H. Otterness, 181 Minn., 254; People v. Cal. Pro. Corp., 76 Cal. App., 354; People v. Merchants Pro. Corp., 189. Cal., 531; Re Eastern Idaho Loan & Tr. Co., 49 Idaho, 280, 73 A. L. R., 1323, and note. In recent years the courts have been frequently called upon to determine what constitutes practicing law. Probably the definition more often quoted with approval is found in In re Duncan, 83 S. C., 186, as follows: “According to the generally understood definition of the practice of law in this country, it embraces the preparation of pleadings and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts, and, in addition, conveyancing, the preparation of legal instruments of all kinds, and, in general, all advice to clients, and all action taken for them in matters connected with the law.” In re Duncan, 83 S. C., 186; In re Pace, 170 N. Y. App. Div., 818, 156 N. Y. S., 641; Barr v. Caldwell, 173 Iowa, 18; Ferris v. Snively, 172 Wash., 167; Fitchette v. Taylor, 254 N. W., 910, 94 A. L. R., 356; S. v. Bryan, 98 N. C., 644. The practice of law is not limited to the conduct of cases in court. S. v. Richardson, 125 La., 644. In a larger sense it includes legal advice and counsel and the preparation of legal instruments and con *632 tracts by which legal rights are secured, although such matter may or may not be pending in court. Boykin v. Hopkins, 162 S. E., 796 (Ga.). But the defendants in the case at bar contend they are not practicing law. They do not object to any of the prohibitions contained in the judgment except as their “claim and adjustment” department may be affected. They excepted only to paragraphs 9 and 10 of the findings and judgment of the court below. The question whether the maintenance of a collection agency comes within the definition of practicing law has been considered by the courts in other jurisdictions, and it has been generally held that while a collection agency might lawfully, for its members and others, engage in the collection of their claims, the maintenance of a law department and through it giving free legal advice to members and the performance of the services of an attorney in collecting the claims would constitute practicing law, and that where the corporations employed attorneys to dispense legal advice and services of the sort usually furnished by lawyers to their clients, and undertook to perform various legal services through licensed attorneys paid by them, it would be regarded as an evasion of the law. Creditors National Clearing House v. Bannwart, 227 Mass., 579; Midland Credit Adjustment Co. v. Donnelly, 219 Ill., 271; Grocers & Merchants Bureau v. Gray, 6 Tenn., C. C. A., 87, cited in 84 A. L. R., 753; State v. Retail Credit Men’s Association, 163 Tenn., 451; Berk v. State, 225 Ala., 324 (distinguishing Kendrick v. State, 218 Ala., 277) ; Boykin v. Hopkins, 162 S. E., 796 (distinguishing Trust Co. v. Boykin, 172 Ga., 437). In the recent case (1935) of Rhode Island Bar Association v. Automobile Service Association, 179 Atl., 139, where the facts were very much like those in the case at bar, the questions here involved were fully discussed with citation of authorities, and a similar result reached. The defendants in the case at bar, doubtless, perform useful services for the convenience of their members, and in the public interest with respect to the safety of motor vehicular travel and the promulgation of automobile laws and regulations, but in so far as any of their activities, methods, and conduct contravene the express provisions of the statute, they must, upon proper application, be enjoined. The complaint in the case at bar alleges violations of law in the very terms of the statute. The findings of fact and conclusions of law determine that in certain respects the identical matters and things forbidden by the statute have been and are being done by the defendants, and the judgment enjoins them from continuing such unauthorized practices. The findings of fact based on evidence are conclusive on appeal, and the conclusions of law of the court below necessarily follow, and must be sustained. Judgment affirmed.