Creditors National Clearing House, Inc. v. Bannwart

| Mass. | Jun 29, 1917

Loring, J.

The plaintiff is a Rhode Island corporation chartered (inter alla) “to establish, maintain, conduct and operate an office or offices for the general practice of the law in all its branches: to advise, assist and render all legitimate services in all sorts of legal, business.” On September 10, 1912, it made a written agreement with the defendant. The written agreement was made by filling out two. blanks one on the face and the other on the back of the same piece of paper, the plaintiff’s agreement being set forth on the face and the defendant’s on the back. By the terms of the contract set forth on the face the plaintiff agreed "to use its best efforts and discretion in the enforcement of all claims accepted by it for collection” charging as commissions percentages on collections made varying from twenty-five per cent (the percentage in case of collections amounting to $20 or less) to five per cent (the percentage in case of payments above $5,000) and different percentages on sums between the two. After making these provisions the blank proceeds in these words: “provided that in place of an attorney’s fee or advance for disbursement costs and expenses there will be charged an amount equal to 15% in addition to the above rates on each payment after the claim shall have been placed in the Law Department for enforcement.” Across the face of this blank are stamped these words: “Free legal advice.” On the back of the same paper the blank setting forth the agreement of the defendant states that the subscriber will pay to the “Clearing House” the percentages or commissions stated on the face of the paper and also a yearly fee of $60. The subscriber agrees -“not to accept payments on any claim after receiving written notice that the same has been transferred to the Law Department for attention.” This blank ends with the provision that “this agreement may be terminated by notice in writing given to said Clearing House at its executive offices at least sixty days before the expiration of any yearly period.”

After September 10, 1912 (when this agreement between the plaintiff and defendant was executed), the defendant placed in the plaintiff’s hands several demands for collection. Nothing was realized from them. ' On March 24,1915, it brought this action to recover from the defendant two yearly fees of $60 each on the ground that by virtue of the last clause of the agreement the contract continued in force until notice was given to terminate it. To this action the defendant set up as a substantive defence “that the plaintiff held itself out to be lawfully qualified to practise in the courts of this Commonwealth.” At the trial the judge instructed the jury that, if by the true construction of the agreement between it and the defendant (construed in the light of the way in which it conducted its business) the plaintiff maintained a law department, the affirmative defence set up in the answer was made out. But that (on the contrary), if by the true construction of that agreement the defendant agreed to procure legal advice for the defendant from attorneys not under salary from it and to put any cases which required the services of a lawyer into the hands of lawyers not under salary from it, the defence was not made out. The jury found for the defendant and the case is here on an exception taken by the plaintiff to the refusal of the judge to give nine rulings requested, on an exception taken to the charge “ so far as it is inconsistent with its requests for rulings” and on exceptions taken to the admission of evidence.

We are of opinion that by the true construction of the contract here in question the plaintiff undertook to maintain a law department and through its law department (1) to give the defendant free legal advice and (2) to perform the services of an attorney in collecting the claims committed by the defendant to it for collection when the services of an attorney were necessary. That being the true construction of the agreement the plaintiff by making the agreement held itself out to be lawfully qualified to practise law in the courts of the Commonwealth.

It follows that the charge of the judge in leaving the construction of the contract to the jury was too favorable to the plaintiff.

The plaintiff has contended that it was not illegal for it to practise law and relies in that connection on Ames v. Gilman, 10 Met. 239. The defence set up was not that the contract was void because by it the plaintiff undertook to practise law but because the plaintiff held itself out “to be lawfully qualified to practise in the courts of this Commonwealth.” That is to say because it held itself out to be a member of the bar. The plaintiff’s further contention based upon the fact that by the true construction of its charter its right to practise law is to practise law “so far as is lawful” is answered by the same consideration.

In the view which we have taken of the case the plaintiff was not prejudiced by the evidence admitted even if the presiding judge was wrong in admitting it.

We have examined all the cases cited by the plaintiff and find nothing in them that requires notice.

Exceptions overruled.