Summary
filling out preprinted forms for realty sales involves "ordinary intelligence rather than the skill peculiar to one trained and experienced in the law" and did not constitute the practice of law
Summary of this case from Cleveland Bar Assn. v. CompmanagementOpinion
No. 28521
Decided June 18, 1941.
Injunction — Unauthorized practice of law by real estate brokerage corporation — Selecting and filling printed blank forms of lease enjoined — Filling printed blank contract forms for purchase of realty, not enjoined.
APPEAL from the Court of Appeals of Cuyahoga county.
This chancery action originated in the Court of Common Pleas of Cuyahoga county.
The plaintiffs are duly admitted attorneys engaged in the practice of law in the state of Ohio.
The defendant is an Ohio corporation organized for the purpose of engaging in the real estate brokerage business.
In their petition the plaintiffs complain that the defendant is engaged in unauthorized practice of law, and an injunction is asked to prevent a continuation of such conduct.
The Court of Common Pleas granted a decree enjoining the defendant corporation from selecting and filling printed blank forms of lease but refused to enjoin the defendant from merely filling printed blank forms of contract for the purchase of realty.
Upon appeal by the plaintiffs on questions of fact and law the Court of Appeals rendered a similar decree and stated its conclusions of fact and law in part as follows:
"1. Plaintiffs are lawyers at the bar of this county and are entitled to maintain this action in the capacity and for the purposes set forth in the petition.
"2. Defendant is a corporation organized for the purposes of conducting a real estate brokerage business, and said corporation was and is now engaged in that business.
"3. Defendant is a licensee under the laws of Ohio relating to real estate brokers.
"4. Defendant is not licensed or otherwise authorized to engage in the practice of law.
"5. The defendant has engaged in a general course of conduct in connection with its business as a real estate broker, through its officers, agents and employees, whereby said defendant has filled in certain blanks on a printed form, which printed form was drawn by a regularly admitted attorney at law at the request of the defendant, and which printed form is entitled 'offer to purchase,' involving the offer to purchase real estate which the defendant did not own and in which it had no direct or primary interest, its only interest being the obtaining of a brokerage commission.
"6. * * *
"7. The acts of the defendant concern only transactions where the defendant acted as a real estate broker and where the defendant was the procuring cause of the purchase and sale of the real estate.
"8. The services rendered by the defendant consist generally of the following acts:
"(a) When a deal had been made, or was about to be made, salesman-employee of the defendant, would procure from a supply kept on hand by the defendant in its various offices, a blank form of said 'offer to purchase.'
"(b) Thereupon the salesman would either write upon this blank form or dictate to a stenographer employed by the defendant, who would type thereon words which expressed the offer of the purchaser, and deleting from such printed matter such words as did not express the desires of the prospective purchaser.
"(c) Said documents were usually, although not always, filled in the absence of the customers whose signatures later appeared thereon.
"(d) The defendant used but one printed form, changing or modifying the same to fit the particular case.
"(e) The offers to purchase above referred to were intended by the defendant broker to be binding upon the parties thereto, when executed and accepted.
"9. The customers of the defendant, for whom such offers to purchase were prepared, were generally laymen not represented by counsel. Upon a few occasions the parties to the transaction were represented by counsel.
"10. The offer to purchase as prepared by the defendant, contained a description of the premises, usually by metes and bounds, with the offer by the prospective purchaser to buy and the acceptance by the seller; it also contained provisions for the cash consideration to be paid, usually it provided for the assumption or execution of a note and mortgage for the balance of the price, if any. The offer to purchase contained printed language providing for the kind of deed of conveyance, for the furnishing of a title guarantee in accordance with the terms of the instrument, the prorating or other adjustment of taxes, assessments and other charges and encumbrances upon or against the property. It also provided that in case of default by the purchaser that the owner could treat the offer to purchase as null and void and retain the earnest money. It also provided that in the event of default by the owner that the purchaser could treat the offer to purchase as null and void and receive return of the earnest money.
"11. Said printed blank form was prepared in the first instance about the year 1925 by a regularly admitted attorney at law, at the request of the defendant, who advised defendant to use that blank form only when the same could be applied to the transaction without change, except as to the filling in of blanks or the deleting of certain printed matter in the form as to factual matters. In no case was the blank form used by the defendant without the filling in of certain blanks or the striking out of certain printed language. In all cases the defendant, or its employees, acted both as scrivener or clerk in the filling in of these forms, or the striking out of certain printed matter, and the phraseology used was usually that which the salesman, who was invariably a person of average or ordinary education, deemed appropriate to the situation, taking into consideration the intent and meaning of the words printed upon the blank form and the phrases necessary to fill in the blanks with respect to such factual matters as were material in the offer to purchase.
"12. In the transactions in evidence only one printed form of offer to purchase was used, and that was the printed form which was theretofore drawn by the attorney for the defendant.
"13. In at least twenty-five separate matters the defendant through its employees and agents used as a basis for lease agreements printed blank forms of leases as published by the Ohio Legal Blank Company, and filled in such words and phrases as such defendant's agents and employees deemed appropriate to express the actual agreement of the parties. One of such lease forms is in evidence.
"14. The instrument which is entitled an offer to purchase was an offer to purchase and not an offer to sell. It was a memorandum under the statute of frauds.
"15. The insertions made by the defendant in the filling in of blanks or the deleting of certain language, was clerical in its nature and did not require legal skill, or legal knowledge.
"16. The use by a broker of a form specifically prepared for that broker by the broker's regularly admitted attorney, is not selecting a form. It is following legal advice by the attorney to the client.
"17. After execution by the parties to the transaction the offers to purchase and acceptances thereof were in several instances used by The Cleveland Trust Company showing what had been agreed to be purchased and sold and upon which escrow instructions, sufficient to enable said trust company to finally carry out and consummate the transaction as escrow agent, were drawn but that the escrow conditions and instructions were not in any manner drawn or otherwise furnished by the defendant."
The case is in this court for review by reason of the allowance of the plaintiffs' motion to certify the record.
Mr. Arthur P. Gustafson, Mr. Jalius A. Negin and Mr. Carl A. Mintz, for appellants.
Messrs. Garfield, Cross, Daoust, Baldwin Vrooman, for appellee.
In considering and deciding this controversy this court is not asked to formulate any new rule of law but merely to reapply the principles announced in the cases of Land Titte Abstract Trust Co. v. Dworken. 129 Ohio St. 23, 193 N.E. 650, and Judd v. City Trust Savings Bank, 133 Ohio St. 81, 12 N.E.2d 288, relied upon by the plaintiffs and the defendant.
In the first case the pertinent paragraph of the syllabus is the sixth which reads as follows:
"Such guarantee companies are likewise precluded from preparation of or advising in the drafting of escrow agreements and instructions, other than the clerical service of recording the stated agreement of the parties to the transaction, and except as to provisions necessary for the protection of any such company as escrow agent."
In the second case this court made the following pronouncement in the third paragraph of the syllabus:
"Banks and trust companies in Ohio are engaged in the unauthorized practice of law when, through their regular salaried officers and employees, who may be attorneys at law admitted to practice in Ohio, they prepare and draft wills, trust agreements, or contracts and other instruments requiring the exercise of legal skill, for their customers or patrons."
The sole question presented by the plaintiffs' appeal is whether the defendant has violated this rule by merely filling printed blank forms of contract for the purchase of realty. More specifically, does the filling of these printed blank forms require the exercise of legal skill, or does it constitute merely the clerical service of recording the stated agreement of the parties to the transaction? This court finds itself in agreement with the reasoning and conclusion of the lower courts to the effect that the supplying of simple, factual material such as the date, the price, the name of the purchaser, the location of the property, the date of giving possession and the duration of the offer requires ordinary intelligence rather than the skill peculiar to one trained and experienced in the law.
The judgment of the Court of Appeals must be affirmed.
Judgment affirmed.
WEYGANDT, C.J., TURNER, WILLIAMS, HART, ZIMMERMAN and BETTMAN, JJ., concur.
MATTHIAS, J., not participating.