186 A.D. 95 | N.Y. App. Div. | 1919
In Post v. Louis (184 App. Div. 533) we dismissed an appeal from an order made by the County Court denying an application made by the petitioner to intervene in the foreclosure action, and to dismiss said action because it was brought in contravention of section 280 of the Penal Law prohibiting the practice of law by corporations. This court held that the application of petitioner to intervene as amicus curies in order to press the application to dismiss, was a matter addressed to the discretion of the County Court. Mr. Justice Thomas said in his opinion: “ There is no motion before this court to discipline an attorney. If there were, the court could pursue its established practice, and then the question
It appears that the committee on unlawful practice of the law of the Brooklyn Bar Association, on November 11, 1918, preferred charges before the grievance committee of the association against the three attorneys respondents, identical with the charges made against them in this proceeding, and that the respondents appeared before such grievance committee on November eighteenth, with counsel, and filed an answer denying such charges; that after hearing, the committee unanimously dismissed such charges. This proceeding is, however, instituted by the association itself, the petition being verified by the secretary.
In United States Title Guaranty Co. v. Brown (166 App. Div. 688) this court affirmed a judgment of the Special Term, in which case the trial judge said (86 Misc. Rep. 287): “ The profession of the law, one of the oldest known to civilization, involving the most sacred confidence between man and man, with its past of high ideals and service to humanity, has in the last quarter of a century suffered much from the inroads of the new financial and business methods in this great land of ours. Whether by ill-advised attempts by corporate employers to dominate and direct attorneys and counsel in the conduct of litigation, whether by so-called title companies or casualty insurance corporations, the old ideals in the relation of attorney and client, which meant so much to mankind, have suffered and have been threatened with demoralization. This is wrong. The loss of the individual personal relation involved in the attempt by corporations to practice law is so serious to the community that it is against public policy, and I am inclined to think malum in se, but, at any rate, there is no question that in this State it is unlawful by force of the statute. The agreement of the plaintiff and defendant and the plaintiff’s agreements with the property owners seem to me to be flagrant violations of the law, and before a court of equity no skillfully framed wording of
We affirmed the judgment in an opinion by the presiding justice, holding that the agreements made by the plaintiff corporation in that case with third persons to undertake legal proceedings in their behalf to recover compensation for lands taken by the city of New York for the construction of the Ashokan Dam, were illegal — that the undertaking of the corporation — plaintiff was mala proMbita (Penal Law, § 280); and while the court held that the plaintiff in the case cited was entitled to an accounting by its attorney for moneys received, we said: “ The plaintiff, for aught decided in this case, remains liable to the exclusive punishment prescribed by the statute. We affirm a judgment, not enforcing the prohibited contracts, but upon taking ‘ notice of the circumstances ’ and in the belief that ‘ justice and equity require a restoration of money ’ [Pratt v. Short, 79 N. Y. 445], and in consideration of public policy, in order to uphold the principle that a member of the bar cannot invoke a violation of law in which he participated, for the purpose of retaining moneys, received by him in his professional capacity, which he agreed another should have and for which in justice and in equity he should account. (Irwin v. Curie, 171 N. Y. 414.) We cannot uphold him in his vindication of a law which he too broke, to the end that he should keep moneys which are not his own.”
The statute (Penal Law, § 280) prohibits a corporation from practicing or appearing as attorney-at-law for any person other than itself in any court in this State, or before any judicial body, or to make it a business to practice as an attorney-at-law for any person other than itself, or to render or furnish legal services or advice, or to furnish attorneys or counsel or to render legal services of any kind. The Legislature has clearly evidenced its intention not only in the general language referred to, but has particularized various acts and transactions as offending the prohibition, and this court in the case cited said through the presiding justice: “ In Matter of Co-operative Law Co. (198 N. Y. 479, 484), when the court considered this statute, it determined that its
There is no denial in the case at bar that the respondents were practicing law in the various matters referred to by the petitioner. That was the disputed question in Matter of Pace (170 App. Div. 818); People v. Peoples Trust Co. (180 id. 494); People v. Title Guarantee & Trust Co. (Id. 648). It was held in the cases cited that a corporation is prohibited from practicing law, and from holding itself out to the public as being entitled to practice law, to render or furnish legal services or advice or to render legal services of any kind, and that attorneys of the court may not aid and abet a corporate employer in such illegal transactions. But the distinction between the cases cited and the matter now before the court is obvious. The guaranty company in the present case is not engaged in seeking legal business or offering to render legal services. The Legislature has authorized the corporation to engage in the business of guaranteeing these securities, and to incur liability by reason of such guaranties, and that is the business of the corporation here. It is not suggested that the corporation is guaranteeing mortgages for the purpose of foreclosing them or engaging in litigation concerning them. Its lawful profits depend in the regular course of business upon the payment by the mortgagor of his obligations without litigation. The right of the corporation to enforce the obligation is a secondary matter necessarily attached to its legal right to carry on its business if it is to avoid loss upon its contracts legally made. The right of insurers to thus protect themselves by actions in the name of the insured has always been recognized. (May Ins. [4th ed.]
Mills, Rich, Putnam and Jaycox, JJ., concurred.
Application denied, without costs.