in the very nature of such associations seems plain. Besides, if it be conceded, as the Towne case, supra, holds, that a member's contract, wherever it is made, is conditioned on the laws of the company so far as these. are in correspondence to the laws of the state where it is organized, comity, if nothing else requires courts of other states to follow construction by the courts of the state enacting such laws. The federal courts admit the right of each state to construe its own statutes, and they claim independence of construction only in matters of general law. Shall one state concede less to a sister state than the federal judiciary concedes?

Expression by some of these courts appears to place them as being ready to say, if necessary, that, as a rule of interpretation, they are bound by a state's construction of its own statutes, independently of any bearing of the faith and credit clause on the matter. But rules of interpretation are subject to so many distinctions that they are not as safe guides as a rule of law, and this rule of law I think is found in the Green case, supra.

Faith and Credit Clause Protects State Construction of Its Laws.-Section 1 of Article IV of the constitution provides that: "Full faith and credit shall be given in each state to the public acts, records and judicial proceedings of every other state," and public acts are held to embrace statute law. But merely to construe the law of another state, while not questioning its validity, was held, with some exceptions, not to deny to it full faith and credit.1 Nor do courts of another state deny full faith and credit to a law of another state, where it considered it and decisions of its courts as to what that law meant." In another case16 it was held, that a ruling turning upon the meaning of a decision of a state court construing its own statute is not necessarily denying to

the statute full faith and credit, except that the construction of such decision be erron. eous. In this case it was claimed, that a decision relied on by the court of the other state had been overruled, but it was held that this was not true.

But no more forcible illustration of the principle that it is state statute with state construction which the faith and credit clause protects can be given than the Green case first above referred to, as shown in and of itself and by the state case1 which was reversed. In the latter case it was said: "The plaintiff's rights are not affected by the fact that the defendant is a corporation organized under the laws of Massachusetts, nor by the finding of the trial court that the statutory law, public acts of the commonwealth of Massachusetts, fraternal beneficiary organizations, of which the defendant supreme council is one, have power to change and amend their rate of assessment,, because (1) the trial court also found that the contract in all its essentials between the parties was entered into, made and completed in the state of New York, and (2) the statute of Massachusetts, under which the defendant claims the power to amend as to rates of assessment, was not enacted until 1902 and expressly provides that amendment, alteration or repeal shall not take away or impair any remedy which may exist by law."

18

The U. S. Supreme Court does not go into any consideration of the meaning of the orig. inal or amended Massachusetts statute, but takes as true and binding a Massachusetts case. It said: "The (Massachusetts) court, after a careful review of the general nature of the corporation, of the character of the fund, of the rights of its members as evidenced by the certificates, of the constitution and by-laws of the corporation, and the laws of the state applicable thereto, decided that the increase complained of was valid,

(17) Greene v. Sup. Council R. A., 206 N. Y. 591, 100 N. E. 411.

(18) Reynolds v. Sup. Council R. A., 192, Mass., 150, 78 N. E. 129, 7 L. R. A. (N. S.) 1154, 7 Am. Cas. 776.

impaired no contract right of the certificate holders and was entitled to be enforced."

Let us remember that the case thus referred to was not a case where any privity could be held to bind the plaintiff Green in the case before the court, and, therefore, the judgment, as a judgment, could claim no protection under the faith and credit clause. This principle was extended, as the chief justice shows, in another very recent case,19 where a suit was brought by representatives suing for themselves and all other members

in the mutual benefit department of an insurance company. The chief justice is thus explicit as to this: "Coming, then, to give

full faith and credit to the Massachusetts charter of the corporation and the laws of that state to determine the powers of the corporation and the rights and duties of its members, there is no room for doubt that the amendment to the by-laws was valid if we accept, as we do, the significance of the charter and of the Massachusetts law applicable to it as announced by the Supreme Judicial Court of Massachusetts in the Reynolds case. And this conclusion20 does not require us to consider whether the judgment per se as between the parties was not conclusive in view of the fact that the corporation, for the purposes of the controversy as to assessments, was the representative of the members. Into that subject, therefore, we need not enter."

It is to be noticed that the reversed case held, that it was deciding the rights of a member of the company under a New York contract, and, therefore, there was merely construction of Massachusetts law and of interpretation thereof by Massachusetts courts, even if it is admitted that the New York contract was conditioned on Massachusetts law. But the reversing court upheld the controlling effect of the law of Massachusetts as established by the ruling of its highest court. The New York court appeared to deny this effect-in a New York

(19) Hartford L. Ins. Co. v. Ibs, 237 U. S.-, 35 Sup. Ct. 692.

(20) Italics Supplied.

contract conditioned on Massachusetts law. It did not admit it controlled, and then argue that the law as interpreted did not cover the case before the court. If it had done this its judgment probably would have come under the ruling of the Allen, Johnson and Finney cases supra. The faith and credit clause does not guard against mere reasoning by courts of other states, but there is presumption that they will respect, in good faith, its guaranties.

Faith and Credit Clause and Home State

of Company.-The enforcement of the prinfect of eliminating conflict of decision in ciple in the Green case cannot have the effraternal insurance company cases. Its only necessary effect is, that the members of a particular company, whether they reside at its home place of charter or in other states, and whether their contracts with it are where they reside or at the home place of charter, are all conditioned upon one law-that made and construed in the state which grants the charter. I will illustrate this by cases decided in the state of New York.

The Green case against the Royal Arcanum was decided erroneously, because it held that an increase in rates was in impairment of contract rights, when interpretation placed by Massachusetts courts on the law under which the defendant was organized held to the contrary. This same ruling by New York courts in another fraternal insurance case21 was right, if Michigan, its home state, rules the same way. I leave that question to local inquiry.

Another case22 holding the same way may be deemed correctly decided, because the defendant was a New York corporation and the ruling was on the principle of stare decisis. This case, like the Reynolds case, supra, could be taken as conclusive interpretation of New York law, upon which the

(21) Wright v. Knights of Maccabees. 196 N. Y. 391. 89 N. E. 1078. 134 Am. St. Rep. 838. (22) Dowdall v. Catholic M. B. A.. 196 N. Y. 405, 89 N. E. 1075.

contracts of members are conditioned. The same may be said of another case.23

Another case24 was of a Massachusetts company, and though it might be thought to involve the same principle as the Reynolds case, yet the precise question was not involved. This case showed attempted reduction of amount of insurance. The Reynolds case showed increase of assessment. There would be room here to argue that this question was not covered and there would be no denial of faith and credit in refusing to apply the Reynolds case.

This

Another case25 in this volume concerned a Pennsylvania company. This case involved the question as to the operation, whether retrospective or not, of a suicide amendment. The opinion does not disclose any reference to Pennsylvania decision. reasoning would seem under the Reynolds case to be wholly irrelevant, if there existed any Pennsylvania ruling on the point, by its highest court. I leave this to local investigation.

In a case concerning a New York corporation,26 the decision was right on the same principle that governed the Dowdall case, but the court refers to rulings in support rendered in suits against domestic and foreign corporations, without making any distinction between them, as required by the principle declared in the Green case. It only needed to refer to cases where domestic corporations had been sued.

The illustration of the operation of the faith and credit clause, as shown by my reference to New York cases, can be multiplied for every state. I do not attempt to show which of the rulings are right or wrong, but that some of them are right and others wrong is clear, for I believe it to be true that the different states, with such

(23) Parish v. New York Produce Exchange, 169 N. Y. 51. 61. N. E. 977. 56 L. R. A. 149. (24) Langan v. Am. Legion of Honor. 174 N. Y. 266, 66 N. E. 932.

(25) Shipman v. Protected Home Circle, 174 N. Y. 398. 67 N. E. 83, 63 L. R. A. 347.

(26) Ayers v. Ancient Order United Workmen, 188 N. Y. 280. 80 N. E. 1020. out of the ground.-Lesamis

V. Greenburg, U.

rare exceptions as hereinbefore pointed out, have not considered as important the question of the home place of the corporation. Those that have regarded this fact as important have done so either on the theory that rulings at the home state were more persuasive than others and because that state must have intended there should be uniform operation everywhere. This intention, however, might be viewed, as many courts have viewed the intention in uniform

legislation, to be applied with many reservations and exceptions. These have crept into decision so much as seriously to hinder the commendable purpose in uniform laws. The faith and credit clause, however, in a case, where the question is properly raised, secures a constitutional right that the courts must enforce.

For a learned note showing the conflict of authority on the question in the Reynolds case, see 7 L. R. A. (N. S.), beginning at 754, and 1 Ann. Cas. 715, which may be useful for reference in suits brought on benefit certificates in foreign companies. But, as above said, this involves inquiry into the law of home states, and the space allowed to this article cannot be extended to a showing of what is the law of every state that has authorized the incorporation of fraternal benefit societies.

St. Louis, Mo.

N. C. COLLIER.

ATTORNEY AND CLIENT-WHAT IS LAW

BUSINESS?

GROCERS & MERCHANTS BUREAU OF
NASHVILLE, Plaintiff in Error v. DR.
W. E. GRAY, Defendant in Error.

In the Court of Civil Appeals at Nashville, Tennessee. Nov. 29, 1915.

Where a collection agency, organized as a corporation, contracts for a consideration "to give legal advice" to its customers, it is engaging in law business and the contract so made is contrary to public policy and is therefore void and unenforceable.

HALL, J. This action originated before a Justice of the Peace of Davidson County, and was brought by the Grocers & Merchants Bureau of Nashville against the defendant in error to collect the sum of $10.00, growing out of a certain written contraet filed as exhibit "A" to the

agreed statement of facts entered into between the parties, and upon which the case was tried in the court below, and which is made a part of the record upon this appeal. Said written contract was entered into on June 25, 1914, between the plaintiff in error and the defendant in error, Dr. W. E. Gray, who is a colored physician residing in the City of Nashville, Tennessee.

The defendant in error defended the suit upon the ground that said contract was contrary to the public policy of the State, and was, therefore, illegal and void.

A trial of the case in the court below before the Hon. J. B. Daniel, special judge, without the intervention of a jury, resulted in a dismissal of plaintiff in error's suit, and it was taxed with the costs thereof. From this judgment it appealed to this Court, after its motion for a new trial had been overruled, and error have been duly assigned.

The plaintiff in error is a collection agency incorporated under chapter 58 of the Acts of 1901, providing for the organization of corporations for the purpose of conducting commercial, mercantile and protective agencies for the collection of debts. And for the purposes usual and appropriate to the business of such agencies.

The contract solicited by the plaintiff in error and entered into with the defendant in error on June 25, 1914, provided that in consideration of $10.00, to be paid monthly thereafter at the rate of eighty cents per month by the defendant in error, the plaintiff in error would furnish "the following improved and strictly up to date service: (1) Rating book; (2) Supplements; (3) Standing of newcomers; (4) Special reports in Nashville; (5) Special reports in Tennessee; (6) List of bankrupts; (7) Free notary work; (8) Free legal advice regarding commercial matters; (9) To keep office open every Saturday evening until six o'clock."

It appears from the agreed statement of facts that said $10.00 was never paid, and was due under the terms of said written contract at the time the present action was brought.

It was the insistence of the defendant below that plaintiff in error was engaged in the practice of law and contracted, among other things, to perform the services of an attorney and counsellor at law for the defendant; that such a contract is illegal in Tennessee, except when made by a duly licensed attorney; and that the contract being illegal in part and the consideration being entire, the whole contract was vitiated. It was further insisted that the

contract was also void upon the ground that it was solicited by the plaintiff in error.

The agreed statement of facts shows that plaintiff in error employs a reputable and competent member of the Nashville bar to give to its clients the legal advice which it contracts to furnish its subscribers or patrons. And it is insisted by counsel for plaintiff in error that, in pursuing this course, it was not in any sense holding itself out as an attorney or counsellor at law, nor is it engaged in the practice of law, but only hires a lawyer to give its clients legal advice, which it is insisted, is in no way contrary to public policy. It is conceded by counsel for plaintiff in error that a corporation is not eligible to practice law in this state.

We think this is undoubtedly true, as our statutes upon the subject only apply to natural persons who must be twenty-one years of age and of good moral character, and shall stand the examination prescribed by the State Board of Law Examiners, and shall have been duly licensed as required by chapter 247 of the Acts of 1903, and Shannon's Code, Sec. 5772. The question presented upon the agreed statement of facts is whether the services undertaken to be performed by the plaintiff in error under the eighth item of said contract constitutes an undertaking to practice law within the meaning of our statutes, and with the legal significance of that term.

In the matter of the Co-operative Law Co., 198 N. Y. 479, 19 Am. & Eng. Ann. Cas., 879, a corporation was chartered to furnish to its subscribers legal advice and service; to operate in connection with the above department of law and collection for the use and benefit of the subscribers of the company only. The Bar Association of the City of New York intervened to have its charter vacated, and the Court of Appeals, in vacating the charter, said:

"The practice of law is not a business open to all, but a personal right, limited to a few persons of good moral character, with special qualifications ascertained and certified after a long course of study, both general and professional, and a thorough examination by a state board appointed for that purpose. The right to practice law is in the nature of a franchise from the state conferred only for merit. It cannot be assigned or inherited, but must be earned by hard study and good conduct. It is attested by a certificate of the Supreme Court and is protected by registration. No one can practice law unless he has taken an oath of office and has become an officer of the court, subject to his discipline, liable to

punishment for contempt in violating his duties as such, and to suspension or removal. It is not lawful business except for members of the bar who have complied with all the conditions required by statute and the rules of the courts. As these conditions cannot be performed by a corporation, it follows that the practice of law is not a lawful business for a corporation to engage in. As it cannot practice law directly, it cannot indirectly by employing competent lawyers to practice for it, so that would be an evasion which the law will not tolerate. Quando aliquid prohibetur ex direct, prohibetur et per obliquim. Co. Litt. 233.

"The relation of attorney and client is that of master and servant in a limited and dignified sense, and it invites the highest trust and confidence. It cannot be delegated without consent and it cannot exist between an attorney employed by a corporation to practice law for it, and a client of the corporation, for he would be subject to the direction of the corporation and not to the directions of the client. There would be neither contract nor privity between him and the client, and he would not owe even the duty of counsel to the actual litigant. The corporation would control the litigation, the money earned would belong to the corporation and the attorney would be responsible to the corporation only. His master would not be the client but the corporation, conducted it may be wholly by laymen organized simply to make money and not to aid in the administration of justice which is the highest function of an attorney and counsellor at law. The corporation might not have a lawyer among its stockholders, directors or officers. Its members might be without character, learning or standing. There would be no remedy by attachment or disbarment to protect the public from imposition or fraud, no stimulus to good conduct from the traditions of an ancient and honorable profession, and no guide except the sordid purpose to earn money for stockholders. The bar, which is an institution of the highest usefulness and standing, would be degraded if even its humblest member became subject to the orders of a money making corporation engaged not in conducting litigation for itself, but in the business of conducting litigation for others. The degradation of the bar is an injury to the state.

"A corporation can neither practice law nor hire lawyers to carry on the business of practicing law for it, any more than it can practice medicine or dentistry by hiring doctors or dentists to act for it."

We have quoted from the opinion in the above case at length, because the case is direct

ly in point, and the opinion set forth some most wholesome reasons why a corporation cannot practice law, either directly or indirectly, all of which this court heartily approves.

In People vs. John H. Woodbury Dermatological Institute, 192 N. Y. 454, 85 N. E. 697, it was held under the New York Statute, (laws of 1907, ch. 344, Sec. 15), providing that "any person not a registered physician who advertise to practice medicine shall be guilty of a misdemeanor," that a corporation organized under an act authorizing incorporation for manufacturing, mining or chemical purposes might be convicted for advertising to practice medicine.

In State Electric Medical Institute vs. State, 74 Neb., 40, 12 Am. & Eng. Ann. Cas., 673, it was held, under a statute of the State of Nebraska requiring a license for the practice of medicine, that a corporation is not such a person as can obtain a statutory license to practice medicine in said state.

In Hannon vs. Siegel-Cooper Co., 167 N. Y., 244, 52 L. R. A., 429, it was held that a corporation could not engage in and advertise that it was practicing dentistry.

In re Duncan reported in 83 S. C., 186, 18 Am. & Eng. Cas., 657, it was held that any advice given to clients, or action taken for them, in matters connected with the law is practicing law. In that case the court said: "It is too obvious for discussion that the practice of law is not limited to the conduct of cases in courts. According to the generally understood definition of the practice of law in this country, it embraces the preparation of pleadings and other paper 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 actions 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. The following is the concise definition given by the Supreme Court of the United States: 'Persons acting professionally in legal formalities, negotiations, or proceedings by the warrant or authority of their clients may be regarded as attorneys at law within the meaning of that designation as employed in this country.'"

Under these definitions there can be no doubt that the giving of legal advice "regarding commercial matters" is engaging in the practice of law. This being true, we are of the opinion that the contract solicited and entered into by the plaintiff in error with the defendant in