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ince the subject seems to have developed a life of its own, I'm
posting this case, which contains some in-depth discussion of the
power to regulate or define the practice of law, where it lies under
separation of powers doctrine, and the policy reasons for it to be
that way.
I have been propounding the majority view that the practice of law,
and therefore, the definition of what is and is not the practice of
law, is within the plenary power of the courts to regulate. This
case analyzes, but does not conclude on, the issue of definition
of what is the practice of law, but addresses and discusses a lot of
the issuess that have been coming up in threads on this newsgroup
on the subject.
The dissent takes up some of the viewpoints of people who have been
disagreeing with me. However, note that even this dissent notes
that "the weight of authority supports the contrary view."
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233 Or. 80, 377 P.2d 334
Supreme Court of Oregon, En Banc.
OREGON STATE BAR, Respondent,
v.
SECURITY ESCROWS, INC., a corporation, and Ralph Perry, Appellants.
OREGON STATE BAR, Respondent,
v.
AMERICAN ESCROW, INC., a corporation and Hazel M. Altig, Appellants.
Argued and Submitted Sept. 6, 1962.
Decided Dec. 19, 1962.
Suits to enjoin private escrow companies from preparing conveyances
and other specified instruments. The Circuit Court, Multnomah County,
P. K. Hammond, J., granted a part of the relief prayed for and
defendants appealed. The Supreme Court, Goodwin, J., held that an
escrow agent would engage in the practice of law at any time it
exercised any discretion in selection or preparation for another of an
instrument, with or without cost, or if it acted in an advisory
capacity in recommending or designing conveyances as an extra service
to customers, but would not engage in practice of law if it merely, as
scrivener, filled in blanks in such warranty deeds, purchase-money
mortgages, satisfactions of mortgages and similar forms as would be
selected by its customers.
Decree modified.
Lusk and O'Connell, JJ., dissented.
An escrow agent would engage in the practice of law at any time it
exercised any discretion in selection or preparation for another of an
instrument, with or without cost, or if it acted in an advisory
capacity in recommending or designing conveyances as an extra service
to customers, but would not engage in practice of law if it merely, as
scrivener, filled in blanks in such warranty deeds, purchase-money
mortgages, satisfactions of mortgages and similar forms as would be
selected by its customers. ORS 9.160.
Thomas H. Ryan and Victor C. Hefferin, Portland, for appellants.
Malcolm Montague, Portland, for respondent. With him on the brief were
William F. Thomas and James H. Clarke, Portland.
Before McALLISTER, C. J., and ROSSMAN, PERRY, SLOAN, O'CONNELL,
GOODWIN and LUSK, JJ.
GOODWIN, Justice.
The Oregon State Bar brought suit against two private corporations and
certain of their officers to enjoin them from preparing conveyances
and other specified instruments. From a decree granting a part of the
relief prayed for, the defendants appeal.
The issue is whether these particular defendants lawfully may draft
such instruments as contracts, deeds, mortgages, satisfactions,
leases, options, certificates of assumed business name, bulk-sales
affidavits, and the like, as an accommodation for customers who come
to them for escrow service.
The defendants perform closing services in connection with real-estate
transactions. They are not real estate brokers. They offer to brokers,
lawyers, and others their services as depositaries for money and
documents in the closing of a wide variety of transactions. The
closing fee in each case is based upon the value of the property
involved in the transaction, not upon the number or complexity of
instruments prepared. The fee may be the same in two cases even though
no instruments are prepared in one and many are prepared in another.
It is stipulated that no fee is charged for the preparation of
instruments. The escrow companies have no interest in the ordinary
transactions, but presumably are selected as depositaries because of
their disinterest. They have no obligation to any party to any
transaction except to carry out the terms of the escrow. They owe no
duty to advise the parties on their legal rights, nor do they owe any
duty to prepare instruments. They have no reason to protect the rights
of any one party as against another. Neutrality is their stock in
trade. If the instruments needed by a party to a given transaction
were not to be drawn by the defendants, such instruments would have to
be drawn elsewhere and brought to the defendants for deposit in the
regular course of the escrow business.
The defendants say they will be at a competitive disadvantage if they
are enjoined from drawing conveyances. They say they draw the
instruments involved in this litigation only because their customers
want them to do so, and because satisfied customers are good for
business. They perform the service for the same reason other merchants
give other kinds of premiums. It stimulates trade.
The defendants deny that in the performance of the services described
they are holding themselves out as qualified to practice law even when
the documents drawn by them are custom made for a particular
transaction. By far the greater number of documents prepared by the
defendants are prepared upon printed forms. (This last observation no
doubt could apply as well to most lawyers.) Whether there is a
significant difference in principle between the selection of the
proper printed form and the selection of the proper words to put on a
clean sheet of paper in order to accomplish a particular conveyancing
purpose is one of the peripheral questions in this case. First,
however, there are other questions that must be noticed.
The defendants contend that it is exclusively a legislative function
to define the practice of the law, and that the Oregon legislature
has, by its silence, defined the practice of law in such a manner as
to exclude from any prosecription the activities complained of in this
case. The present statutes contain no definition of the practice of
law. From 1919 to 1937 there was a statutory definition. See 32-505,
Oregon Code 1930, repealed by Oregon Laws 1937, ch. 343.
When the assertion made by the defendants is separated into its
component parts, it will be seen that it tenders two issues which are
of different kinds. The question whether either the court or the
legislature has the exclusive power to define the practice of law is a
question of constitutional importance, involving, as it does, the
frontier between the separated powers of government under our state
constitution. It is not a question upon which dictum should be lightly
scattered. We decline to express an opinion upon this question in this
case for two good reasons: (1) The question has not been briefed and
argued with the thoroughness it deserves when and if it needs to be
decided. (2) It is not necessary to decide the question because the
legislature has not, since 1937, undertaken to define the practice of
law.
With the defendants' assertion that the legislature has, by its
silence, defined the practice of law so as to exclude therefrom the
common forms of conveyancing, we are invited to divine legisl
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