ATTORNEYS ‑- UNAUTHORIZED PRACTICE ‑- REALTORS ‑- COURTS

ATTORNEYS ‑- UNAUTHORIZED PRACTICE ‑- REALTORS ‑- COURTS

Realtors preparing deeds, contracts, mortgages and earnest money agreements are practicing law.  They may be enjoined, cited for contempt in extraordinary cases, and prosecuted for misdemeanor.  RCW 2.48.190 repealed by implication.

                                                                   - - - - - - - - - - - - -

                                                                  January 5, 1955

Honorable Hal G. Arnason
State Representative, 42nd District
700 17th Street
Bellingham, Washington                                                                                                                 Cite as:  AGO 55-57 No. 1

Dear Sir:

            You have requested the opinion of this office upon the following question:

            "Do real estate brokers subject themselves to legal sanction if they engage in preparation of earnest money agreements, contracts, mortgages or deeds, etc., by completion of blank forms or otherwise, in connection with transactions arising in their office where they receive no compensation other than their regular broker's commission for such work?"

            We have drawn the following conclusions:

            1. The courts have inherent power to enjoin the broker.  The exercise of this power is not conditioned upon the presence of compensation or prevented by the use of blank forms.  An injunction will be granted if the court decides from the facts of the particular case that it is necessary to protect the public interest.

             [[Orig. Op. Page 2]]

            2. The courts have inherent power to punish the broker as for contempt.  It is improbable that this power would be used except to enforce an existing injunction.

            3. The broker may be found guilty of a misdemeanor.

                                                                     ANALYSIS

            1. Injunction.  The conclusion stated is a summary of the rule announced in Washington State Bar Association v. Washington Association of Realtors, 41 Wn. (2d) 697, which is directly in point on the facts.

            2. Contempt.  In re McCallum, 186 Wash. 312, involved a realtor who had prepared deeds, real estate contracts, mortgages, and other instruments for compensation and gratuitously.  The court made it clear that it had power to punish unauthorized practice of law as for contempt; but indicated that the power would be used with extreme reluctance, saying at p. 316 of 186 Wash. that it

            "* * * is not an idle thing in this kind of a case to resort to the drastic remedy of contempt proceedings, thus cutting off the right to a jury trial and at the same time ignoring the remedy by injunction wherein the defendant may be heard in entering a judgment, the terms of which may be properly enforced thereafter by proceedings in contempt, if necessary."

            3. Criminal prosecution.  Three sections now printed in the Revised Code deal with the general subject of unauthorized practice: RCW 2.48.170 and RCW 2.48.180, formerly RRS §§ 138-13 and 138-14, derived respectively from §§ 13 and 14 of chapter 94, Laws of 1933; and RCW 2.48.190, formerly RRS § 139-4, derived from § 4, chapter 126, Laws of 1921.  We must determine which of these sections, if any, apply on the facts given.

             [[Orig. Op. Page 3]]

            We are confronted at the outset by the fact that RCW 2.48.180 carries the penalty of a misdemeanor, as does RCW 2.48.170 (under RCW 9.01.090); whereas RCW 2.48.190, under § 22, chapter 126, Laws of 1921, which became RRS § 139-22 but was not carried into the Revised Code, carries the penalty of a gross misdemeanor.  State v. Chamberlain, 132 Wash. 520; Ferris v. Snively, 172 Wash. 167.  Since RCW 2.48.170 and 2.48.180 prohibit certain acts also prohibited by RCW 2.48.190, under differing penalties, there is inconsistency.  The question of the implied repeal of RCW 2.48.190 (dating from 1921) by RCW 2.48.170 and 2.48.180 (and the 1933 act generally), mentioned without comment in theRealtors case,supra, thus arises.

            Chapter 94, Laws of 1933, carried no specific repealer.  If any statute was repealed, it was by implication.  State v. Becker, 39 Wn. (2d) 94.  A repeal by implication is effected if the later act (1) covers the entire subject matter, (2) is complete within itself, and (3) is evidently intended to supersede the earlier act; or (4) if the two acts are so inconsistent that they cannot both be given effect by a reasonable construction.  State ex rel. Reed v. Spanaway Water District, 38 Wn. (2d) 393; Rosenthal v. Tacoma, 31 Wn. (2d) 32.

            There is no doubt that chapter 94, Laws of 1933, did repeal most of chapter 126 Laws of 1921, on the admission of attorneys to practice and general regulation of the bar.  The section now under consideration, RCW 2.48.190 (cf. RRS § 139-4, chapter 126, Laws of 1921), provides:

            "No person shall be permitted to practice as an attorney at law or to do work of a legal nature for compensation, or to represent himself as an attorney or qualified to do work of a legal nature, unless he is a citizen of the United States and a bona fide resident of this state and has been admitted to practice law in this state:  Provided, That any person may appear and conduct his own case in any action or proceeding brought by or against him, or may appear in his own behalf in the small claims department of the justice's court:  Provided further, That an attorney of another state may appear as counselor in a court of this state without admission,  [[Orig. Op. Page 4]] upon satisfying the court that his state grants the same right to attorneys of this state."

            That is has been carried into the Revised Code (see the Reviser's note of conjecture following RCW 2.48.230) is of course inconclusive.  Petsch v. Willman, 29 Wn. (2d) 136.  That the section, then appearing as RRS § 139-4, was referred to by the court after 1933 inFoster v. Washington State Bar Association, 23 Wn. (2d) 800, andAyamo v. Washington State Bar Association, 24 Wn. (2d) 406, is certainly entitled to weight.  However, in neither case was the validity of the section in question.  In theAyamo case, the illegal and hence unethical acts were probably covered by RRS § 138-14 (RCW 2.48.180).  We think, therefore, as is indicated by the Realtors case, supra, that the question is still open.

            The two later sections, RCW 2.48.170 and 2.48.180, are derived respectively from §§ 13 and 14, chapter 94, Laws of 1933, which provided:

            "No person shall practice law in this state subsequent to the first meeting of the state bar unless he shall be an active member thereof as hereinbefore defined:  Provided, That a member of the bar in good standing in any other state or jurisdiction shall be entitled to appear in the courts of this state under such rules as the board of governors may prescribe."

            "Any person who, not being an active member of the state bar, or who after he has been disbarred or while suspended from membership in the state bar, as by this act provided, shall practice law, or hold himself out as entitled to practice law, shall be guilty of a misdemeanor:  Provided, however, Nothing herein contained shall be held to in any way affect the power of the courts to grant injunctive relief or to punish as for contempt."

             [[Orig. Op. Page 5]]

            The proviso of the first section quoted above, RCW 2.48.170, apparently superseded the second proviso of RCW 2.48.190.  Probably no statute is necessary to secure the right mentioned in the first proviso of RCW 2.48.190.

            RCW 2.48.190 requires bona fide residence in the state and United States citizenship of one who practices law.  After 1933 one could not lawfully practice without belonging to the Bar Association.  Section 8, chapter 94, Laws of 1933, now RCW 2.48.060, empowers the Board of Governors to fix qualifications for admission to practice, subject to the approval of the Supreme Court.  Pursuant thereto, residence for ninety days and citizenship are required by Rules 2 and 3 (b) and (d), 34A Wn. (2d) 160, 161.  Provision for coverage of this matter was thus made by the 1933 statute.

            RCW 2.48.190 prohibits the unauthorized practice of law, and the making of false representations that one is authorized to practice.  RCW 2.48.170 and 2.48.180 prohibit the same acts.

            RCW 2.48.190 also forbids the doing for compensation of, or the making of a false representation that one is qualified to do, "work of a legal nature," without being admitted to practice.  It seems fair to say that something which can lawfully be done only by an attorney admitted to practice is in fact and in law the "practice of law."  State v. Chamberlain, 132 Wash. 520.  Under RCW 2.48.190, therefore, doing "work of a legal nature" for compensation amounted to the practice of law, whereas the same acts performed gratuitously did not constitute the practice of law.  If the purpose of the statute is to protect the public from defective legal service, that result is inconsistent.  Since the court inPaul v. Stanley, 168 Wash. 371, pointed out this feature of the law in 1932, it is reasonable to infer that the matter was considered by the 1933 legislature which completely revised the statutes regulating the practice of law.  Yet if the legislature did consider the matter it seems unlikely that they intended to leave the doing of "work of a legal nature" for compensation a gross misdemeanor, while reducing the penalty for all-out unauthorized practice of law (the same conduct on a larger scale) to a simple misdemeanor.  But if RCW 2.48.190 has not been repealed that is the result.  The penalty of the earlier law will conform to that of the later law for an identical offense; but an even slightly different offense under the earlier law will carry the original penalty.  State v. Binnard, 21 Wash. 349.

             [[Orig. Op. Page 6]]

            Since doing "work of a legal nature" is not intrinsically different from the "practice of law," later legislation using only the latter term does not leave basically different prohibited conduct uncovered.  We view it rather as a final step in a progressive simplification of the unauthorized practice provisions.  See § 1, chapter 115, Laws of 1917, § 1, chapter 100, Laws of 1919; and § 4, chapter 126, Laws of 1921.

            From what has been said it seems that for purposes of the question at hand chapter 94, Laws of 1933, covers the entire subject-matter of the section to which we have been referring as RCW 2.48.190, is complete within itself, and was evidently intended to supersede RCW 2.48.190.  We conclude that RCW 2.48.190 has been impliedly repealed.

            It remains only to determine whether or not the activities described in your inquiry now constitute the practice of law within the contemplation of RCW 2.48.170 and 2.48.180.  In Ferris v. Snively, 172 Wash. 167, 174, it is said:

            "The practice of law is defined in 2 R. C. L., p. 938, § 4, as follows:

            "'According to the generally understood definition of the practice of law in this country, it embraces the preparation of pleadings and other papers incident to actions and special proceedings, and the management of such actions and proceedings on behalf of clients before judges and courts, and, in addition,conveyancing, the preparation of legal instruments of all kinds, and, in general, all advice to clients, and all action taken for them in matters connected with the law.  An attorney at law is one who engages in any of these branches of the practice of law.'"  (Emphasis supplied)

            At p. 176 the court said:

            "Under the authorities, and in reason, we think,  [[Orig. Op. Page 7]] it must be held that the services rendered by respondent included acts which fell within the term 'practice of law.'  * * * He prepared wills, leases, mortgages, bills of sale, and contracts, upon his own initiative, * * *"

            We will not burden further an opinion already unduly attenuated by amassing authorities from other jurisdictions in support of what we believe to be the weight of authority and the better rule; that a broker who prepares instruments affecting the legal rights of third parties, in real property or otherwise, whether or not by completion of blank forms and regardless of the presence or absence of specific compensation, is practicing law within the purview of RCW 2.48.170 and 2.48.180.

            We hope that the foregoing discussion will prove to be of assistance to you.

Very truly yours,

DON EASTVOLD
Attorney General

A. J. HUTTON, JR.
Assistant Attorney General