Curry v. Dahlberg , 341 Mo. 897 ( 1937 )

ON MOTION FOR REHEARING. [5] Many questions urged on motion for rehearing have been fully discussed in the opinion, but it is contended that the issue of illegality of the contract sued on should not have been raised by the court sua sponte, because it was an affirmative defense waived by failure to state it in the answer, and because the case was a purely private controversy in which the public policy of practice of law by laymen was not presented by the pleadings. A sufficient answer, even if the broader aspects of the public interest in the regulation of the practice of law be disregarded, is that the illegality of the contract was affirmatively shown by the facts stated in plaintiff's fourth amended petition, and therefore on the face of the record proper it appears that plaintiff was not entitled to the relief asked. [See 6 R.C.L. 818, sec. 215; Scott v. Brown (1892), 2 Q.B. Div. 724; Shohoney v. Q., O. K.C. Railroad Co., 231 Mo. 131, l.c. 147, 132 S.W. 1059; Oscanyan v. Winchester Arms Co.,103 U.S. 261, 26 L. Ed. 539; Noonan v. Gilbert, 68 F.2d 775; Waychoff v. Waychoff (Pa.), 163 A. 670, 86 A.L.R. 190.] It is unfortunate that apparently plaintiff's creditors are the real losers in this case. They naturally and properly sought repayment out of funds which they had reason to believe might come into his possession. Nevertheless, their claim is only based on assignment from him and it can rise no higher than its source.

In the matter of public interest, it can make no difference, as plaintiff suggests, that in Clark v. Austin, 340 Mo. 467,101 S.W.2d 977, the question of unlawful practice was raised and brought before the court by action of the court's advisory committee. Certainly, if it is proper for the court to appoint an advisory committee to investigate and raise such questions concerning prevention of unlawful practice in cases not before this court, then surely it is proper for this court to raise such a question in a case pending before it where unlawful practice and unlawful practices constitute the basis for the relief asked. To do otherwise would be to punish one violation of the law and reward another. This court believes that it has the responsibility and the duty to concern itself both with regard to proper conduct of licensed practitioners and with unlawful practice of law by all others to the end that legal services required by the public, and essential to the administration of justice, will be rendered by those who have been found by investigation to be properly prepared to do so by conforming to strict educational standards, and who demonstrate that they have the character to conform to higher standards of ethical conduct than are ordinarily considered necessary in business relations which do not involve the same fiduciary and confidential relationships. To enforce such standards of ability, knowledge and conduct, it is necessary in the public interest to prevent those who will not or cannot comply with them, from engaging in competition for legal work with those who must and do observe them, especially when, as here, such employment is obtained by advertising and soliciting rather than by being sought out because of known integrity and ability. [See In the Public Interest (Clark), 2 Mo. Law Review 161.] One of the most effective means of preventing encroachment by such unauthorized practioners is to prevent them from profiting by such "chiseling" activities as "high pressure" solicitation for legal business. No doubt our Legislature had this in mind when it passed Section 11694, Revised Statutes 1929, which not only made such acts a misdemeanor subject to a fine, but also provided for recovery from an unlawful practitioner of treble the amount collected by him for his compensation.

[6] Plaintiff also contends that his contract should be enforced because it was made before the Legislature enacted Sections 11692-11694, Revised Statutes 1929. These sections are based upon the police power of the State (Clark v. Austin, supra), and it is well settled that "parties cannot remove their transactions from the reach of dominant constitutional power by making contracts about them." [Norman v. B. O. Railroad Co.,294 U.S. 240, 55 Sup. Ct. 407, 79 L. Ed. 885.] Not only are individuals powerless to contract against proper exercise of the police power of the State, but even the Legislature is specifically prohibited by the Constitution from abridging it in any way. [Sec. 5, Art. XII.] While plaintiff further contends that Dahlberg was not practicing law, this is settled by the principles stated in Clark v. Austin, supra, and State ex inf. McKittrick v. Dudley Co., 340 Mo. 852, 102 S.W.2d 895, and it would serve no useful purpose to discuss them again in this case. Further discussion and collation of cases may be found by reference to 85 U. of Pa. Law Review 432; 83 U. of Pa. Law Review 357; 41 Yale Law Review 69; 29 Mich. Law Review 989.

[7] The question of public policy involved is argued from the standpoint that it was good public policy to allow shippers to obtain refunds of charges exacted from them in violation of rates fixed by the laws of this State, and that the parties here were assisting such a purpose. No one will question the propriety of such recovery and all reasonable and lawful methods to accomplish it, but Dahlberg's interest (nor plaintiff's either) was not a purely altruistic crusade against railroads violating the law. He was not even seeking employment as an accountant only. His activity was induced by the idea of his own gain, not from merely the work of computing rates but from controlling the settlement of rights of claimants involved in this situation and of acting for them not only in determining the amount of their claims but also in enforcing them in the courts up to the highest in this State and Nation. He made an intensive solicitation, personally and by agents, to obtain control of claims so that he could obtain for himself half of what those entitled to such refunds would receive. He was authorized to say what action should be taken and when; and to employ lawyers to do what he thought should be done. Services of an accountant and rate expert were no doubt not only helpful but necessary in carrying on such litigation, and it would have been entirely proper for him to have been employed as such by claimants, and to be paid whatever that kind of work was worth (or even to be paid on a contingent basis), but that did not give him the right to be the lawyer as well as the accountant for these claimants, by constituting himself their legal representative to control and carry on their litigation. Plaintiff finally says that, even if Dahlberg was practicing law, he was not; and, citing Kelerher v. Henderson, 203 Mo. 498, 101 S.W. 1083, says that the contract between plaintiff and Dahlberg was separate and distinct from the contracts between Dahlberg and Shippers and would not be tainted with any illegality therefrom. This is also answered by the principles stated in Clark v. Austin, supra, and State ex inf. McKittrick v. Dudley Company, supra; and it further appears that plaintiff's contract violates another vital precept of public policy; namely: It is an agreement to make personal solicitation to obtain law business which neither lawyers nor laymen can be permitted to do nor to have done for them. Moreover, the contract which plaintiff seeks to enforce specifically provided that "this forms a special partnership between us for the handling of the particular matters referred to."

The motion for rehearing is overruled.