State ex rel. Indiana State Bar Ass'n v. Indiana Real Estate Ass'n

191 N.E.2d 711, 244 Ind. 214, 1963 Ind. LEXIS 179
CourtIndiana Supreme Court
DecidedJuly 10, 1963
DocketNo. 29,990
StatusPublished
Cited by31 cases

This text of 191 N.E.2d 711 (State ex rel. Indiana State Bar Ass'n v. Indiana Real Estate Ass'n) is published on Counsel Stack Legal Research, covering Indiana Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State ex rel. Indiana State Bar Ass'n v. Indiana Real Estate Ass'n, 191 N.E.2d 711, 244 Ind. 214, 1963 Ind. LEXIS 179 (Ind. 1963).

Opinions

Achor, J.

This is an original action brought by The Indiana State Bar Association, and others, under Rule 3-26 of this court, to enjoin the alleged unlawful practice of law by the respondents, Indiana Real Estate Association, Inc., and all licensed real estate brokers and salesmen in the state of Indiana.

We have held that this court has jurisdiction to entertain the proceedings for the reason that, inherently, and under Acts 1951, ch. 143 §1, p. 382, being §4-3605, Burns’ 1962 Supp., this court is charged with the duty of supervising and controlling the practice of law in this state, and of issuing restraining orders and injunctions against the unau[217]*217thorized practice of law, whether in or out of our courts.1

The practice of law, in the broad sense, both in and out of the courts, is such a necessary part of, and so inexorably connected with, the exercise of the judicial power of this court, that this court is charged with the continuing responsibility of exercising its supervisory control of such practice of law.

The questions presented in this case are whether or not the use of forms of legal instruments prepared by attorneys, the selection of such forms to be used, and the insertion of words within the printed forms in connection with the real estate transactions in which they are involved, constitutes the unauthorized practice of law by respondents who are not attorneys and whether such action be enjoined as against public interest.

The respondents are duly licensed by the Indiana Real Estate Commission under Acts 1949, ch. 44, §§1 — 24, inclusive, being §§63-2401 — 63-2423, Burns’ 1961 Repl. Section 9 of the above Act [§63-2409] provides, in part:

“Every person acting for himself, every member of a firm, partnership, association or corporation participating or engaged in the real estate brokerage or as a real estate salesman therefor shall obtain and keep renewed and wholly unrevoked a license as a real estate broker or real estate salesman as herein required.”

The act further provides that the commission shall hold examinations to determine the qualifications of those asking for a license, and shall promulgate rules and regulations for the conduct of such agents and brokers.

[218]*218The' respondents admit that they use the forms, as alleged in the petition, but deny that they are giving legal advice, directly or indirectly, in connection with their use. They further deny that they undertake to draw or-prepare documents in connection with real estate transactions, “but merely fill in the blank spaces in- the forms referred to in the petition,” stating in their response that such does not constitute the practice of law.

The respondents further state that the forms referred to 'in the petition have been in all cases prepared by attorneys who are members of the bar of the state of Indiana; and that although not all the forms have been approved by The Indiana State Bar Association, these forms have been used since 1950 when an agreement was. made with The Indiana State Bar Association, Wherein they agreed to the use of certain of such forms by the real, estate brokers, and further agreed to “approve and promulgate” other forms for use by both attorneys' and relators. This agreement was originally made in 1942, and amended in 1950, and reads in part as follows:

“2,.- The Realtor shall not undertake to draw or prepare documents fixing and defining the legal rights of parties to a transaction. However, when acting as broker, a Realtor may use an earnest money contract form for the protection of either party against unreasonable' withdrawal from the ■- .transaction, provided that such earnest money con-i' tract form,' as well as any other standard legal •‘■'forms used by the broker in transacting such business shall first have been approved and promulgated for such use by the Bar Association and the Real Estate Board in the locality where the forms are to be used.” [Our italics.]

. Although the “other standard legal forms,” referred to in the above'agreement, were never'drafted, “ap[219]*219proved and promulgated” by the parties to this action, it is contended by the respondents that The Indiana State Bar Association has impliedly approved the use of forms, such as those specified in its petition, by the respondents; and that by reason of the prolonged failure of The Indiana State Bar Association to consummate their agreement, the Association is now estopped to object to the use of forms here placed in issue, which forms have been unilaterally prepared and approved by competent legal counsel for the respondents.

Since the court has elected to decide the case upon its merits, a ruling upon the issue of estoppel is not necessary. However, the fact of the long standing negotiations between the parties upon the issue before us is indicative of the fact that a just solution of the problem, as it relates to the parties and the general public, probably lies within the area of agreement reached by the parties, as above recited.

In our consideration of the case, we make plain that the question presented here is narrowly limited to the use of forms [prepared by attorneys], the selection of such forms to be used, and the filling in of blanks in such forms by licensed real estate brokers and agents in transactions in which they are authorized by statute to perform. There is no issue here presented with reference solely to the offering or giving of legal advice.

In some of the briefs, an attempt is made to make the issue turn upon definitions of “the practice of law.” In any event, we believe that the real question here at issue is whether the selection, completion, and use of the standardized forms by brokers, in connection with real estate transactions for their clients, and here sought to be enjoined, is prohibited to them, as being the practice of law. Al[220]*220though the practice of law is one of the oldest and most honored professions, the law itself is by no means an absolute science, the practice of which can be accurately and unequivocally defined. For example, under the early English law, some instruments were prepared by scriveners, who were neither barristers nor solicitors, although the preparation of such instruments is now universally considered to constitute the practice of law. On the other hand, persons not admitted to the practice of law are now permitted to represent clients before tax courts, etc., where formerly only attorneys were authorized to appear. These changes have come about because of the exigencies of the particular situation. So it is today with regard to the practice of law. There is a twilight zone between the area of activity which is clearly permitted to the layman, and that which is denied him. Generally, it can be said that the filling in of blanks in legal instruments, prepared by attorneys, which require only the use of common knowledge regarding the information to be inserted in said blanks, and general knowledge regarding the legal consequences involved, does not constitute the practice of law. However, when the filling in of such blanks involves considerations of significant legal refinement, or the legal consequences of the act are of great significance to the parties involved, such practice may be restricted to members of the legal profession.

As stated by the Supreme Judicial Court of Massachusetts in Lowell Bar Association v. Loeb (1943), 315 Mass. 176, 186, 52 N. E. 2d 27, 34:

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Bluebook (online)
191 N.E.2d 711, 244 Ind. 214, 1963 Ind. LEXIS 179, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-ex-rel-indiana-state-bar-assn-v-indiana-real-estate-assn-ind-1963.