I am not able to agree with what is said in the majority opinion with reference to the effect of the assignments. In my opinion, the assignments in question gave defendant corporation the right to maintain actions on the claims in its own name. I think in order to arrive at the legislative intent in the enactment of section 9067, it is important to give consideration to the history of that section.
It first came into our Codes in 1864, under the Bannack Statutes, and then provided: "Every action shall be prosecuted in the name of the real party in interest, except as otherwise provided in this Act: but in suits brought by the assignee of achose in action, account, or unliquidated demand, not assigned inwriting, the assignor shall be made a party defendant, to answeras to his interest in the subject matter of the action." (Sec. 4, p. 43, Bannack Statutes.) In 1867 it was amended so as to eliminate that provision which is italicized. (Statutes of 1867, p. 136.) Thus it will be seen that when first enacted, the assignee could sue on a written assignment without joining the assignor. But when the assignment was oral, the statute required that the assignor be joined. *Page 109 By amending the statute in 1867, the requirement that the assignor under an oral agreement must be joined, was eliminated, thus evidencing a clear intent on the part of the legislature that in all assignments, written or oral, the assignor need not be a party to the action, but that it was properly maintainable by the assignee in his own name.
The legislature again, in 1895, further amended the statute as stated in the majority opinion; but before doing so Mr. Pomeroy, in his work on Code Remedies, third edition, section 132, when speaking with reference to whether an assignee for collection was the real party in interest, had said: "Analogous to the subject discussed in the preceding paragraph is the question whether an assignee, to whom a thing in action has been transferred by an assignment which is absolute in its terms, so as to vest in him the entire legal title, but which, by means of a contemporaneous and collateral agreement, is, in fact, rendered conditional or partial, is the real party in interest. It is now settled by a great preponderance of authority, although there is some conflict, that if the assignment, whether written or verbal, of anything in 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 virtue of which he is to receive a part only of the proceeds, `and is to account to the assignor or other person for the residue, or even is to thus account for the whole proceeds, or by virtue of which the absolute transfer is made conditional upon the fact of recovery, or by which his title is in any other similar manner partial or conditional,' does not render him any the less the real party in interest; he is entitled to sue in his own name, whatever collateral arrangements have been made between him and the assignor respecting the proceeds. The debtor is completely protected by the assignment, and cannot be exposed to a second action brought by any of the parties, either the assignor or other, to whom the assignee is bound to account. This is the settled doctrine in most of the states. Notwithstanding the general unanimity of the courts *Page 110 in sustaining this doctrine, there are still some indications of a different opinion, although it can hardly be said that this difference has been embodied in an adjudication as the ratiodecidendi."
By the amendment of 1895 our statute was made to read exactly as the New York statute, which had prior to 1895 been construed as authorizing an assignee for collection to sue in his own name. (Allen v. Brown, 44 N.Y. 228; Cummings v. Morris, 25 N.Y. 625. ) Likewise prior to 1895, California, with the same statute, had construed it in the same manner. (McPherson v. Weston,64 Cal. 275, 30 P. 842.) When interpreting what are now sections 9067 and 9068, Revised Codes of 1935, this court has always placed great reliance upon the New York and California decisions, as will appear in the cases of Stadler v. First Nat. Bank,22 Mont. 190, 56 P. 111, 74 Am. St. Rep. 582, and Cornish v.Woolverton, 32 Mont. 456, 81 P. 4, 108 Am. St. Rep. 598; and the rule is of long standing that when we borrow a statute from another state which prior to its enactment here had been construed by the courts of the state from which we adopted it, the presumption is that our legislature also adopted that construction. (Esterly v. Broadway Garage Co., 87 Mont. 64,285 P. 172; St. George v. Boucher, 88 Mont. 173,293 P. 313.)
The courts throughout the country have construed statutes either identical or nearly the same as section 9067, supra, as authorizing the assignee for collection to sue in his own name. (Manley v. Park, 68 Kan. 400, 75 P. 557, 1 Ann. Cas. 832, 66 A.L.R. 967; Coffman v. Saline Valley R. Co.,183 Mo. App. 622, 167 S.W. 1053; Morrison v. Veach, 190 Cal. 507,213 P. 945; James v. Lederer-Strauss Co., 32 Wyo. 377,233 P. 137; McGillivray v. Columbia Salmon Co., 104 Wash. 623,177 P. 660; Dyer v. Title Guaranty Surety Co., 106 Wash. 186,179 P. 834; Falconio v. Larsen, 31 Or. 137, 48 P. 703, 37 L.R.A. 254; Citizens' Bank v. Corkings, 9 S.D. 614,70 N.W. 1059, 62 Am. St. Rep. 891; Mosher v. Bellas, 33 Ariz. 147,264 P. 468; Collins v. Heckart, 127 Or. 34, *Page 111 270 P. 907; Ingham v. Weed, 5 Cal. Unrep. Cas. 645, 48 P. 318;Cohn v. Thompson, 128 Cal.App. (Supp.) 783,16 P.2d 364; Moss v. Taylor, 73 Utah, 277, 273 P. 515; Keon v.Saxton Co., 227 A.D. 733, 236 N.Y. Supp. 503; Elam v.Arzaga, 122 Cal. App. 742, 10 P.2d 805; Hammell v.Superior Court, 217 Cal. 5, 17 P.2d 101; Perkes v. UtahIdaho Milk Co., 85 Utah, 217, 39 P.2d 308; Bechtel v.Baglieto, 13 Cal. App. 2d 495, 57 P.2d 192; HiberniaSecurities Co. v. United Mfg. Co., (Or.) 59 P.2d 384;Carson Pirie Scott Co. v. Long, (Iowa) 268 N.W. 518; note, 64 L.R.A. 582.)
In 4 Am. Jur. 328, the rule is stated as follows: "An assignee for collection is generally considered to be the real party in interest under these statutes, though he is to account to the assignor for the proceeds of the action." To the same effect is 2 R.C.L. 640, and 5 C.J. 995.
Some of the foregoing cases hold that the assignee for collection is trustee of an express trust within the meaning of the statute, and others that he is the real party in interest. Thus for more than forty years our statute has remained unchanged with practically all courts in the country construing it as authorizing the assignee for collection to maintain action in his own name. Moreover, it is a matter of common knowledge that during this period of time courts and litigants throughout the state have recognized the assignee for collection as the real party in interest. It has been taken for granted that such an assignee may sue in his own name, and no one has ever presented the question to this court in a direct proceeding challenging his right to sue.
Were it not for the historical background of section 9067, there might be some merit in what Mr. Kerr has stated, which the majority of this court now place reliance on. Is it not strange that if it did not want the assignee for collection to have the right to sue, the legislature has taken no steps to change the law? *Page 112
My associates seem to lay stress upon the fact that here there was no collateral agreement, but that the whole agreement appears on the face of the assignment. I can see no logical reason for any different rule on this account. Certainly, defendant corporation is not to be penalized because it dealt aboveboard and placed the entire agreement relating to the terms of the assignment in one contract rather than having two separate contracts.
I agree, of course, that if the assignment does not make the assignee the real party in interest, then the corporation is simply furnishing legal services to another, which it has no right to do. But it is my view that the assignment operates to make the assignee the real party in interest and, in consequence, it is appearing for itself in maintaining actions, and not for another. The cases relied upon in the majority opinion do not militate against this view. The case of Abrams v. Cureton,74 N.C. 523, was decided upon the theory that if the assignee be permitted to sue in his own name, the defendant would be prohibited from asserting defenses against the assignor, except by resorting to another action. That is not true under our statute (sec. 9068), for it expressly saves those rights to the defendant. That section provides: "In the case of an assignment of a thing in action, the action by the assignee is without prejudice to any set-off or other defense existing at the time of, or before, notice of the assignment." Thus the reasoning of that case does not apply in this state.
The case of Martin Garrett v. Mask, 158 N.C. 436,74 S.E. 343, 41 L.R.A. (n.s.) 641, was one where an agent was suing on a debt due to his principal. Obviously he was not the real party in interest. The case states, by way of dictum only, that an assignee of a claim for collection is not the real party in interest.
The case of Brown v. Ginn, 66 Ohio St. 316, 64 N.E. 123, contains language tending to support the view stated in the majority opinion, but there the assignment was made to an attorney and the court held that it was champertous and for *Page 113 that reason void. It cannot be determined on which ground the court based its opinion.
In the case of People v. Securities Discount Corp.,361 Ill. 551, 198 N.E. 681, relied upon in the majority opinion, no mention was made of any statute such as our section 9067. The same is true of State v. James Sanford Agency, 167 Tenn. 339,69 S.W.2d 895.
The cases of Coombs v. Harford, 99 Me. 426, 59 A. 529, and Waterman v. Merrow, 94 Me. 237, 47 A. 157, had to do with assignments without any consideration and for the sole purpose of bringing suit. Here the defendant corporation actually sues upon only a small percentage of the claims assigned to it, but endeavors always to effect collection without suit. It devotes time and money in an effort to collect without suit; hence the assignments here are for a consideration, viz., defendants promise to endeavor to collect. (Sec. 7503, Rev. Codes.) Likewise the cases of Gaffney v. Tammany,72 Conn. 701, 46 A. 156, and Muller v. Witte, 78 Conn. 495,62 A. 756, were cases where the assignments were without consideration and for the sole purpose of suit. The case of Olmstead v.Scutt, 55 Conn. 125, 10 A. 519, was also a case where an assignment was made without consideration that it might be used as a set-off in an action pending by another against the assignee.
The Maine and Connecticut cases are clearly distinguishable from the case here because in all of those cases the assignee had no interest in the claim whatever, but was to account for the entire proceeds to the assignor and gave absolutely no consideration for the assignments. The assignments were merely a subterfuge and for the purpose of enabling the assignee to sue for the sole benefit of the assignor.
Entertaining the view that I do concerning the effect of the assignments, it then becomes pertinent to inquire whether the activities of defendants in the justice courts are legitimate. Section 8943, Revised Codes, provides: "If any person practice law in any court, except a justice's court or a police court, *Page 114 without having received a license as attorney and counselor, he is guilty of a contempt of court." Section 9629 provides: "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." The word "parties," as used in the last-cited section, is broad enough to include corporations.
Therefore the defendant corporation under this statute has the right to appear in justice courts, either in person or by attorney. A corporation cannot act in person, but may appear by attorney. Anyone may act as attorney for it, except the constable by whom the summons or jury process was served.
The state of Colorado has statutes similar in purpose to our sections 8943 and 9629. They were before the court in UnitedSecurities Corp. v. Pantex Pressing Mach., Inc., 98 Colo. 79,53 P.2d 653, 656. In that case, as here, a collecting agent acting for the plaintiff corporation made an affidavit of attachment, filed an undertaking on attachment, and procured a writ of attachment. The contention was there made that the corporation and its agent were engaged in the unlawful practice of law. The court in holding against that contention said: "The claims and causes there [in justices' courts] litigated are of minor importance. The court is often referred to as the `poor men's court,' and the causes frequently do not justify the expense of an attorney. With few exceptions, the justices of the peace who preside at the trials are men with no legal training whatsoever, nor are they required by law to have such training. No record is made of the proceedings in justice courts, nor aresuch proceedings ever reviewed by any court to which the causemay be appealed. Whether a cause is well presented or well defended or poorly presented or poorly defended in the justice court can never aid or hamper another court in the exercise of its jurisdiction over the subject-matter of the trial. On appeal to the county court, a court of record, the trial must be denovo (sec. 6179, C.L. 1921; McCreary v. *Page 115 Brady, 26 Colo. App. 297, 143 P. 829; Slaughter v.Strouse, 20 Colo. App. 484, 487, 79 P. 972), and under both the statutes of the state and the holding of this court, supra, a corporation can appear in a court of record only by an attorney at law. We hold, therefore, that the plaintiff corporation, under the statute, was within its legal rights in appearing in the justice court by its agent, not licensed to practice law, and that having appeared by attorney in the county court it was the duty of the latter to hear the cause de novo." To the same effect is Rehm v. Cumberland Coal Co. of Baltimore City,169 Md. 365, 181 A. 724.
But it is here asserted that this court has inherent power to define the practice of law and to hold that defendants here are engaged in the practice of law in the justice courts notwithstanding sections 8943 and 9629. While this court has inherent power to determine what constitutes the practice of law, it is bound to respect legislative enactments such as are contained in sections 8943 and 9629. The supreme court of California in the case of Eagle Indemnity Co. v. IndustrialAcc. Com., 217 Cal. 244, 18 P.2d 341, 343, had a similar question before it. In that case there were involved statutes authorizing parties to appear before the Industrial Accident Board in person or by attorney or other agent, and allowing the commission to fix a reasonable attorney's fee for legal services pertaining to any claim. In that case an award for attorneys' fees was made to one not a licensed attorney. The court held that the agent who was awarded this fee was not unlawfully practicing law. The court referred to the statutes, identical with ours, which make an exception in the case of proceedings in a justice court. In discussing the question of the policy of such a provision, the court said: "On the one hand it is urged that the order should be affirmed on the ground that numerous claimants for compensation are indigent and their claims are of such a character and the compensation allowed by the commission is so small as not to justify the engagement or service of a member of the bar, and that without *Page 116 the right to have a lay representative the claimant would ofttimes be unrepresented. On the other hand, it is urged that to allow the order to stand would vitally affect the business of lawyers admitted to practice in the state, and would result in inexperienced and inexpert advice and assistance to a deserving claimant to the latter's detriment; and that the practice of allowing lay representation before boards exercising judicial functions should not be extended. Whatever view may be urged as to the policy of the law in such matters, the legislature has declared the policy, and we do not feel warranted in this instance in setting it aside. If it be desirable from a legislative standpoint to prohibit lay representation before the Industrial Accident Commission, the Act could be amended to accomplish that result."
So far as the proceedings in the justice court are concerned, the assignment giving the corporation the right to sue in its own name, the acts of defendants do not constitute unlawful practice of law.
Moreover, if, as the majority hold, the corporation in bringing the actions under the assignments in question does not appear as the real party in interest, but acts for the creditor; even then, I think, it may maintain the actions in justice courts without being guilty of unlawfully practicing law. The objection that it is not the real party in interest should be otherwise raised than by this circuitous and untenable method. I concede that a corporation cannot practice law. The corporation, however, does not and cannot appear in any action in person. It always appears through an agent. Defendant Johnson is usually the agent who appears for it. Obviously, under section 9629, Johnson could appear for the creditor. If in legal contemplation it must be held that under these assignments defendants do in fact represent the creditors, still, I think, so far as the proceedings in the justice court are concerned, defendant Johnson, or any other agent, may appear as attorney in such actions, and the corporation may lend its *Page 117 name as party plaintiff, without any of them being guilty of the unlawful practice of law.
Likewise defendants' activities in the district court are not open to criticism if the assignment has the effect which I think it has, because there the corporation appears through a duly licensed attorney.
One other point must be considered in connection with these assignments. Section 8980, Revised Codes, provides: "An attorney and counselor must not, directly or indirectly, buy, or be in any manner interested in buying, a bond, promissory note, bill of exchange, book debt, or other thing in action, with the intent and for the purpose of bringing an action thereon." And section 8983 provides: "The last four sections apply to a person prosecuting an action in person, who does an act which an attorney and counselor is therein forbidden to do." It is here contended that by these statutes defendant credit corporation is precluded from taking these assignments. If the requisite intent may be established (in this connection compare Moses v.McDivitt, 88 N.Y. 62, Starke v. Wannemacher, 32 N.D. 617,156 N.W. 494, 4 A.L.R. 167, Bulkeley v. Bank of California,68 Cal. 80, 8 P. 643, Tuller v. Arnold, 98 Cal. 522,33 P. 445, and Crawford v. Engler, 131 Cal. App. 374, 21 P.2d 460), then that would be a defense to the action brought by the assignee (Strever v. Sinclier, 66 Mont. 258,213 P. 253; but it would not be a reason for holding that the assignee is practicing law, and hence in contempt of this court. The mere fact that an action was commenced does not prove the requisite intent. (Moses v. McDivitt, supra; Starke v. Wannemacher, supra.) If this were so, a thing in action could never be assigned, because a "thing in action is a right to recover money or other personal property by a judicial proceeding" (sec. 6804, Rev. Codes); and the assignment of a thing in action is clearly recognized by section 9068, Id.
Are defendants guilty of contempt of court because they secure judgment for attorneys' fees in justice courts when no *Page 118 attorney is employed? Section 8958 prohibits the court from allowing attorneys' fees in such a situation. Defendant corporation ought not to make a demand for attorneys' fees when it prosecutes an action in the justice court without a duly licensed attorney appearing for it. Courts should not allow such fees under such circumstances. The real wrong committed in such a case is that committed by the court. In the district court the corporation has the right to such fees because there it always appears through a duly licensed attorney. The record discloses that, although attorneys' fees have been included in judgments in justice courts where no attorney was employed, that part of the judgment has been waived, and no fee in fact collected. Defendants gave as an excuse for demanding attorneys' fees in the complaint the fact that, if the case is contested, an attorney would be employed in the case. This may be a sufficient excuse for making the demand in the complaint, but it furnishes no excuse for permitting it to be included in the judgment. Even though the fee is never in fact collected, it furnishes to the judgment creditor an advantage in effecting a more favorable corpromise. The practice should be discontinued.
I think, however, that since the statute itself attempts to regulate the conduct of the court, rather than the parties litigant, and that, since this is the first time it has been brought to the attention of the court for judicial pronouncement as to its effect, we ought not to visit upon defendants the penalty of contempt on this account, but simply indicate our purpose to do so in the future if the practice be persisted in. As to the matter of sending out the final notices, I think since that practice has been discontinued, we should not impose any penalty in this case on that account.
As I read the majority opinion, its effect is to put all collecting agencies in Montana out of business. That may or may not be a good thing. Viewing the question from the standpoint of the debtor who is forced to pay his debts, it will probably not be questioned seriously that he finds the pitiless practice *Page 119 of some of the collecting agencies a poor substitute for the painless process of extracting money employed by the licensed attorney. But the debtor is not the one complaining here. He perhaps has realized that the question is one of policy for the legislature. He may have found that while he is debtor in one case, he may appear as creditor in another, and that there is advantage in having a poor man's court where litigants can appear without licensed attorneys, and in having collecting agents to whom accounts may be assigned for collection. At any rate, I think the whole question is one of policy for the legislature.
The legislature in 1901 passed what is now section 4863, which provides in part: "No justice of the peace shall practice law, * * * nor shall they take any claim or bill for collection, nor act as a collection agent in any sense whatever." If the legislature desired to place that same restriction on collecting agencies it doubtless would have done so. I think plaintiff's remedy to force collecting agencies to cease operating is to apply to the legislature and not to this court.
I think the judgment should be in favor of defendants.