MB. JUSTICE ANDEBSON
delivered the opinion of the court.
This is an original proceeding brought to have the defendants adjudged in contempt of court for practicing law without a license. Many lawyers throughout the state, as well as collecting agencies, have been permitted to appear as
amici curiae.
After issues were framed by the pleadings the court appointed Honorable A. F. Lamey, a practicing attorney of Havre, as referee to take testimony. The testimony was taken at a hearing held in Great Falls and has been certified to this court. The important facts are these:
The Merchants’ Credit Service, Inc., is a Montana corporation with its principal office in Great Falls. Its business is that of carrying on a collection business. The defendant Palmer Johnson is its general manager. It solicits, from merchants and others, the assignment of debts for collection. Creditors are advised that the corporation has in its employ attorneys at law who are retained to represent it wherever necessary. It uses letter-heads representing that it can garnishee wages and attach property. Some creditors assign claims by using what is called a “claim sheet” furnished by defendants. This claim sheet is in the following form:
“Merchants’ Credit Service, Inc., Great Falls, Montana.
“Gentlemen: The accounts listed on this sheet are hereby assigned to you for collection in accordance with your regular schedule of rates and terms. The undersigned guarantees them to be just, correct and unpaid, and will furnish you with a fully itemized statement of any of these accounts upon request. None of these accounts are at present listed with other collectors or with attorneys. You will be notified promptly of any payments made directly to us by any of these debtors and your regular terms will apply to such payments.
If it is necessary, you' are authorized to forward any of these accounts to other collectors or to attorneys, and it is expressly understood that we will not hold you responsible for the efficiency, honesty or defalcation of such forwardee. Should you deem it necessary to file suit on any of these accounts, this assignment makes you the party in interest in whose name suit is to be filed; if an attorney is necessary he is to be selected, engaged and compensated by you, and in all ways the handling and settlement of the suit is left to your choice, judgment and discretion.
“Date: - 19 — .
“Signed-
“By-”
(On the sheet appear five columns, headed as follows:)
“Name.
“Last Known Address.
“Amount.
“Last Date of Purchase or Service.
“Remarks: Give any information you can regarding debt- or’s employment, etc., that will help us. If all or any part of the debt is covered by a note or other instrument, that instrument should be enclosed with this sheet. If the account is disputed, letters from the debtor will help. If his address is not known, give us the name and address of relatives, etc.”
Other creditors use their own method of assignment, while still others do so orally, but with the understanding that the claim sheet covers the terms and conditions of the verbal assignment.
Defendant corporation pays nothing for the assignments at the time they are made, but, in the event of collection, transmits a certain percentage thereof to the assignor, retaining the balance for its fee for effecting collection. When it receives an account or demand for collection, an agent of the corporation calls upon the debtor at his home, writes him a letter, or telephones to him and endeavors to collect without suit, but often it resorts to the courts for collection. If suit is in the
district court, the corporation appears by duly licensed attorneys retained by it. If suit is in the justice court, the defendant Johnson or some other employee of the corporation prepares the complaint, summons, affidavit for attachment, writ of attachment and execution, and appears for the corporation’ unless an answer is filed or there is opposition to the suit. When suit is on a promissory note calling for the payment of attorneys’ fees in case of suit a demand is made therefor, whether an attorney is employed or not. In most cases the defendant corporation advances the costs of suit, but in some eases, where recovery is doubtful, the assignor advances 50 per cent, thereof. Justice court judgments are in many, eases abstracted and filed with the clerk of the district court and execution -thereon is issued by the clerk of the district court. When collection is effected by suit or otherwise, the defendant corporation deducts its agreed commission and transmits the balance to the assignor.
The first question for determination is whether this court has jurisdiction to punish for contempt, if the acts complained of constitute unlawful practice of law. This court is by statute given the exclusive power to confer upon any persons the right to practice law (sec. 8936 et seq., Rev. Codes), and to deprive them of that right. (See. 8961, Id.) If any person shall engage in the practice of law without being authorized - so to do, -even though that practice is not done directly in this court, it has the right to punish for contempt. (Compare
In re Bailey,
50 Mont. 365, 146 Pac. 1101, Ann. Cas. 1917B, 1198;
In re White,
54 Mont. 476, 171 Pac. 759;
In re Phillips,
64 Mont. 492, 210 Pac. 89;
State
v.
Barlow,
(Neb.) 268 N. W. 95.)
The question of primary importance in this case is whether the so-called assignments of claims to the defendant corporation are sufficient, so that the corporation may be said to be the real party in interest within the meaning of section 9067 of our Codes. The defendants contend that by reason of these assignments the defendant corporation becomes the real party in interest, and, therefore, .when it files suit in its own
name on these claims it is entitled to conduct its own litigation. The contention of the plaintiff is to the contrary, namely, that these assignments are so in form only, and that they are insufficient to make the corporation the real party in interest.
Section 9067, Revised Codes, provides: “Every action must be prosecuted in the name of the real party in interest, except that an executor or administrator, a trustee of an express trust, or a person expressly authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted. A person with whom, or in whose name, a contract is made for the benefit of another, is a trustee of an express trust, within the meaning of this section.”
Ever since the adoption of the original New York Code of 1848, the provisions of the above section have been a fundamental requirement of Code pleading. Prior to the adoption of the Code, if the assignee of a claim sued at law, he was turned out of court; and if the assignor sued in equity, he was turned out also. As a result of the adoption of this section, much diversity of judicial opinion exists as to the true meaning of this section. Many courts have held that the assignee who acquires the mere legal title to a claim for the purpose of collection, without any consideration other than an agreement to proceed with diligence to endeavor to collect and pay the proceeds of the collection, either in whole or in part, to the assignor creates in the assignee the status of a real party in interest who may bring the action on the claim. We shall at a later point in this opinion review and discuss some of these decisions. Other courts consider such transfers as being merely simulated, and hold that, though where, as here, no consideration being paid and the assignor being entitled to a substantial part of the proceeds of the claim assigned, the assignment does not operate to make the assignee the real party in interest within the meaning of the above section of our Codes, as is illustrated by the following decisions:
Gaffney
v.
Tammany,
72 Conn. 701, 46 Atl. 156;
Muller
v.
Witte,
78
Conn. 495, 62 Atl. 756;
Olmstead
v.
Scutt,
55 Conn. 125, 10 Atl. 519;
Waterman
v.
Merrow,
94 Me. 237, 47 Atl. 157;
Coombs
v.
Harford,
99 Me. 426, 59 Atl. 529;
Abrams
v.
Cureton,
74 N. C. 523;
Martin & Garrett
v.
Mask,
158 N. C. 436, 74 S. E. 343, 41 L. R. A. (n. s.) 641;
Brown
v.
Ginn, Trustee,
66 Ohio St. 316, 64 N. E. 123; Cf.
People
v.
Securities Discount Corp.,
361 Ill. 551, 198 N. E. 681;
State
v.
James Sanford Agency,
167 Tenn. 339, 69 S. W. (2d) 895.
It will be noted, in giving consideration to section 9067, that certain exceptions are enumerated within the section itself, namely, executors and administrators, a trustee of an express trust, and persons authorized by statute. It would appear that if the legislature had intended that a real party in interest was one who held only the legal title of a claim, no reason can well be suggested for mentioning these exceptions. No one may dispute that a trustee of an express trust holds the legal title to the trust funds, the property of the trust; and, likewise, the executor and the administrator would ordinarily hold the legal title of a chose in action, the property of the estáte. Thus it would appear to be clear, in the light of these exceptions, that it was the intention of the legislature in adopting this section that when it used the words “real party in interest,” it meant exactly what it said.
Such is the view expressed by Mr. Kerr in his work on Pleading and Practice in Western States. At page 787 of this work it is written: “In other words, ‘assignment’ means just what it says, using that word in its legal and technical sense; it is a contract whereby the owner of the thing in action divests himself of all interest and right and title therein, and of all right to receive or derive any further or future benefit therefrom, and vests all the interest and right and title, including the right to the money on the payment or enforcement of the same, for a valuable consideration, or as a gift or donation. If the owner still retains an interest in the ‘thing in action,’ and has the right to receive the money arising from the enforcement thereof by an action at law or a suit in equity,
on execution or otherwise, the transaction is in no legal sense an ‘assignment,’ as that word is used in procedural Codes. A transfer, either with or without endorsement, without consideration, and merely for the purpose of having an action instituted and prosecuted in the name of another, and enforcing the thing in action by a judgment and execution, retaining the right to receive the proceeds of such judgment and execution, not being in any proper and legal sense an ‘assignment,’ does not make the party to whom the pretended transfer is made and in whose name the action is instituted the ‘real party in interest’ and entitled to maintain an action thereon under the Code provision; and to hold that such camouflage of a simulated transfer does confer that right is not only to do violence to the clear and explicit language of the Code, but is also, in many instances, a judicial violation of, and evasion of, that other provision of the Code requiring nonresident plaintiff and foreign corporations to give security for costs; accomplishes no useful purpose in judicature, hut does enable the owners of ‘things in action,’ in some instances, to escape their legal obligations, and promotes the interests of collection agencies.”
This same author, after observing that a view at variance with that expressed by him exists in the decisions of the courts of many states, has this to say: “ #
* *
, but that does not change the facts in the case; the construction is unwarranted by the Code provisions themselves or by any common-law or statutory rule of construction; has too much of the air of ‘special pleading,’ and can be but regarded as ‘judicial legislation,’ and not an enforcement of either the letter or spirit of the statute.” Finally, on page 791, the author declares: “The real party in interest in a ‘thing in action,’ is the person who is to derive the substantial or monetary benefit therefrom. The camouflage of a ‘simulated transfer’ cannot make the transferee the real party in interest — with all due respect to the decisions which, under a forced construction, hold otherwise. It is simply a correct interpretation of plain Anglo-Saxon words.”
In 34 Yale Law Journal, page 273, an article on the subject of the real party in interest appears. Although the article takes a view somewhat opposite to that advanced by Mr. Kerr, nevertheless as one of the grounds for their view the authors advance the argument that in most Codes this section, as it exists in our Code, is divided into two sections, one providing merely that the action shall be brought in the name of the real party in interest, and the other containing the provisions of our section following the word “except.” It is said that since the provisions are divided into different sections, they are of equal dignity, and that one does not thereby become the exception to the other. It is noteworthy that in this action such was the state of our statutory provisions prior to the adoption of the Codes of 1895. Section 570 of the Code of Civil Procedure of 1895 was in the same form as our present section. Prior to that time, however, we had this same matter contained in two sections. (See sees. 4 and 6, Title 2, Compiled Statutes of 1887.)
Counsel for the defendants have invited our attention to many cases holding that an assignment such as the one here under consideration would operate to make the defendant corporation, in actions prosecuted by it under these assignments, a real party in interest. Among these is the case of
Cohn
v.
Thompson,
128 Cal. App. (Supp.) 783, 16 Pac. (2d) 364. That case, however, was based in part upon a statute expressly authorizing such assignments. The court in the course of its opinion cited many earlier California cases prior to the enactment of this statute, which announced a similar rule. The earliest decision there referred to is the case of
Grant
v.
Heverin,
77 Cal. 263, 18 Pac. 647, 19 Pac. 493. The California court there based its decision entirely upon the statement found in section 132 of the then current edition of Pomeroy on Code Remedies & Remedial Rights, which is quoted in the opinion. The quotation, however, states that if the assignment “of any action is absolute in its terms so that by virtue thereof the entire apparent legal title vests in the
assignee any contemporaneous collateral agreement by which he is to receive a part of the proceeds and has to account to the assignors and other persons for the residue, * # * such assignee is the real party in interest.” Here resort is not necessary to a collateral agreement to ascertain the fact that the assignor is entitled to the proceeds and that he retains control over the chose in action, for it is apparent on the face of the written assignment. Some of the later California cases lay down the rule in entire accord with the contention of the defendants.
Counsel cite the case of
Mosher
v.
Bellas,
33 Ariz. 147, 264 Pac. 468. Arizona, however, as a part of their section, which is a counterpart of our section 9067, provides: “The assignee of any chose in action is a trustee of an express trust, within the meaning of this Section.”
(Sroufe
v.
Soto Bros. & Co.,
5 Ariz. 10, 43 Pac. 221.)
Again counsel cite the case of
Carson Pirie Scott & Co.
v.
Long,
(Iowa) 268 N. W. 518, 519, as announcing the rule for which they contend, and without question the case so holds; but we find that Iowa for many years has had a statute providing that an open account “of sums of money due on contract may be assigned, and the assignee will have the right of action in his own name,” etc.
(Knadler
v.
Sharp,
36 Iowa, 232.) Thus it will be observed that the courts of Iowa and Arizona have express statutory authority for their conclusions, the like of which does not exist in this jurisdiction.
The courts of Kansas, after deciding otherwise, finally adopted a rule in accordance with the defendants’ contention.
(Manley
v.
Park,
68 Kan. 400, 75 Pac. 557, 66 L. R. A. 967, 1 Ann. Cas. 832.) The Kansas statute, although it is divided into two sections, is similar to our own. Likewise the court of South Dakota, in the case of
Citizens’ Bank
v.
Corkings,
9 S. D. 614, 70 N. W. 1059, 62 Am. St. Rep. 891, under a statute similar to the Kansas statute, adopted a like rule.
It is noteworthy, in passing, that so far as promissory notes which are negotiable in form are concerned, they are on a
different basis, as under section 9067, Revised Codes, a person who is authorized by statute may sue without joining with him the person for whose benefit the action is prosecuted. Section 8458, Id., provides that the holder of a negotiable instrument may sue thereon in his own name; and section 8402 defines a “holder” to mean the payee or indorsee of a bill or note, who is in possession of it or the bearer thereof.
We hold that the defendant corporation under these assignments, so far as accounts and claims other than negotiable promissory notes are concerned, is not the real party in interest and therefore not entitled to sue on such assigned claims, and that, when so suing, it was not representing itself, but its assignors.
Section 8944, Revised Codes, defines the practice of law as follows: “Any person who shall hold himself out, or advertise as an' attorney or counselor-at-law, or who shall appear in any court of record or before a judicial body, referee, commissioner, or other officer appointed to determine any question of law or fact by a court, or who shall engage in the business and duties and perform such acts, matters, and things as are usually done or performed by an attorney-at-law in the practice of his profession for the purposes of this Act, shall be deemed practicing law.”
Since the defendant corporation was only acting in a representative capacity when it prepared pleadings and filed them in the district court, which is something usually done and performed by attorneys at law in the practice of their profession, the corporation and its agent, Palmer Johnson, were practicing law. The same is true with reference to actions in the justice court, unless they were relieved by the provisions of section 8943, reading as follows: “If any person practice law in any court, except a justice’s court or a police court, without having received a license as attorney and counselor, he is guilty of a contempt of court”; and also section 9629, which declares: “Parties in justice’s court may appear and act in person or by attorney; and any person, except the constable
by whom the summons or jury process was served, may act as attorney.”
It is suggested that the defendant corporation may practice law in a justice court under these sections, on the theory that the word “person” in section 9629, includes corporations. Section 16 of the Codes declares that the word “person” includes corporations wherever used in the Codes. A like provision occurs in section 10713. Section 8776 declares: “Whenever the meaning of a word or phrase is defined in any part of this code, such definition is applicable to the same word or phrase wherever it occurs, except where a contrary intention plainly appears.” Section 15 of the Code provides that “words and phrases used' in the codes or other statutes of Montana are construed according to the context and the approved usage of the language.”
If the suggestion of the defendant corporation is worthy of consideration, we find that section 8936, Revised Codes, providing who may be admitted as attorneys, includes any citizen or person resident of this state. It is everywhere held that a corporation can never be authorized to practice law itself, and neither can it employ attorneys to practice for another. (2 R. C. L. 946;
State
v.
James Sanford Agency,
167 Tenn. 339, 69 S. W. (2d) 895;
Richmond Assn. of Credit Men
v.
Bar Assn.,
(Va.) 189 S. E. 153, decided January 14, 1937, and not yet reported [in State report];
People
v.
Securities Discount Corp.,
279 Ill. App. 70, affirmed in 361 Ill. 551, 198 N. E. 681;
In re Opinion of Justices,
289 Mass. 607, 194 N. E. 313;
In re Co-operative Law Co.,
198 N. Y. 479, 92 N. E. 15, 32 L. R. A. (n. s.) 55, 139 Am. St. Rep. 839, 19 Ann. Cas. 879;
In re Otterness,
181 Minn. 254, 232 N. W. 318, 73 A. L. R. 1319;
People
v.
Merchants’ Protective Corp.,
189 Cal. 531, 209 Pac. 363;
People
v.
Motorists Assn. of Illinois,
354 Ill. 595, 188 N. E. 827;
People
v.
People’s Stock Yards State Bank,
344 Ill. 462, 176 N. E. 901;
State ex rel. Lundin
v.
Merchants’ Protective Corp.,
105 Wash. 12, 177 Pac. 694;
State
v.
Retail
Credit Men’s Assn.,
163 Tenn. 450, 43 S. W. (2d) 918;
Berk
v.
State,
225 Ala. 324, 142 So. 832, 84 A. L. R. 740.)
Section 5903, Revised Codes, enumerates the purposes for which private corporations may be formed. It includes many purposes. The section closes with the parting injunction: “No corporation must be formed for any other purpose than those mentioned in this section”; and nowhere in this section do we find any subject which even by inference or innuendo might include the practice of law. It is fundamental that a special statute controls a general one where both relate to the same subject.
(Durland
v.
Prickett,
98 Mont. 399, 39 Pac. (2d) 652;
Langston
v.
Currie,
95 Mont. 57, 26 Pac. (2d) 160;
State ex rel. Daly
v.
Dryburgh,
62 Mont. 36, 203 Pac. 508.) Accordingly, the word “person” as used in section 9629 does not include a corporation.
Plaintiff contends that when the defendants sued to recover attorneys’ fees on a promissory note they were guilty of the unlawful practice of law. Section 8958, Revised Codes, makes it unlawful for any court to allow attorneys’ fees in an action when the party is represented by someone other than a duly licensed attorney. The defendant corporation is without justification in making such demand, and courts in allowing fees under such circumstances are subject to severe condemnation. The record discloses that attorneys’ fees have been included in judgments where no attorney was employed in justice courts, but it is asserted that in no such case has the fee ever been collected. This practice is a direct violation of the statutes of this state and it amounts to an unlawful practice of law. The demanding of attorneys’ fees is usually done by a licensed attorney in his practice, and therefore comes within the statutory definition of the practice of law.
Complaint is made of the defendants’ joining both the husband and wife in all actions where a claim against either is involved. They have done so on the theory that the debt was due for the purchase of necessities of life, in which event such joinder may be proper. (Sec. 5790, Rev. Codes.) In
some eases it was shown that such joinder was made when the facts in nowise justified this practice. This course of conduct, when without the terms of the statute, should not be encouraged. It at least amounts to sharp practice.
Defendants prior to the commencement of this proceeding frequently addressed to the debtors a document designated as a “final notice.” This instrument is on regular legal paper commonly used in court proceedings and bears the names of the parties, followed by the appropriate designation of plaintiff and defendant. On it appears the statement, “Original to the defendant, and duplicate to the clerk of the court.” On the back of the instrument appears a notation, as follows: “Final notice filed April 27, 1935.” These instruments are designed to simulate legal process and were sent out before any action was commenced in court. Documents of similar import have been condemned in the ease of
State Bar of Oklahoma
v.
Retail Credit Assn.,
170 Okl. 246, 37 Pac. (2d) 954, and we likewise concur in what was there said in condemnation of this practice.
The whole course of conduct as disclosed by the record in this case manifests an attempt on the part of the defendants unlawfully to practice law and to seek either to ignore or evade the statutes. Accordingly we find the defendants to be guilty of contempt. Let judgment be entered finding the defendants guilty of contempt and fining them in the amount of the costs of this proceeding.
Associate Justices Stewart and Morris concur.