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11/20/87 First Federal Savings and v. Martin P. Sadnick

November 20, 1987

COUNTY, PLAINTIFF-APPELLEE

v.

MARTIN P. SADNICK, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, THIRD DISTRICT

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF BUREAU

515 N.E.2d 1354, 162 Ill. App. 3d 581, 114 Ill. Dec. 83 1987.IL.1729

Appeal from the Circuit Court of La Salle County; the Hon. William P. Denny, Judge, presiding.

APPELLATE Judges:

JUSTICE STOUDER delivered the opinion of the court. HEIPLE and SCOTT, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE STOUDER

The defendant, Martin Sadnick, obtained a mortgage from the plaintiff, First Federal Savings and Loan Association of Bureau County (First Federal). Sadnick failed to make his mortgage payments and First Federal filed a complaint for foreclosure against Sadnick seeking to foreclose on the property. Sadnick then filed a motion to dismiss the complaint, contending the mortgage was invalid because it was not prepared by an attorney. The motion was denied and the circuit court entered a decree for foreclosure. Sadnick then moved to vacate the decree for foreclosure. This motion was also denied and the property was sold by the La Salle County sheriff.

On appeal, Sadnick argues the trial court erred when failing to dismiss First Federal's foreclosure complaint because the mortgage was not prepared by an attorney. Sadnick also argues the $600 fee collected by the sheriff for selling the property is unconstitutional because it is excessive.

Initially, Sadnick contends that because First Federal is a corporation which prepared the mortgage at issue, and since a corporation cannot practice law, the complaint for foreclosure should be dismissed and the mortgage rendered void. In support of this position, Sadnick cites the case of Chicago Bar Association v. Quinlan & Tyson, Inc. (1966), 34 Ill. 2d 116, 214 N.E.2d 771. In Quinlan & Tyson, licensed real estate brokers and salespersons, acting on behalf of sellers, drew contracts of purchase and sale, prepared deeds and other instruments necessary to clear or transfer title, and supervised the closings of transactions. The brokers also inserted factual information in blanks on forms originally drafted by attorneys. The Illinois Supreme Court held that merely filling in the blanks constituted "practicing law" even though the brokers and salespersons were not directly compensated for doing so. The court stated:

"The drawing or filling in of blanks on deeds, mortgages or other legal instruments subsequently executed requires the peculiar skill of a lawyer and constitutes the practice of law.

Drafting and attending to the execution of instruments relating to real-estate titles are within the practice of law, and neither corporations nor any other persons unlicensed to practice the profession may engage therein." 34 Ill. 2d at 122-23.

However, the Illinois Supreme Court suggested in Quinlan & Tyson that an exception exists to the general rule stated above. The exception allows persons to engage in activities that otherwise might constitute "practicing law" as long as the activities are incidental to the corporation's main business. The court stated:

"'Any one who wants to pay the price may purchase a set of form books and read and copy them. He may use them in his own business if he so desires. But when he advises others for a consideration, that this or that is the law, or that this form or that is the proper form to be used in a certain transaction, then he is doing all that a lawyer does when a client seeks his advice.'" Chicago Bar Association v. Quinlan & Tyson, Inc. (1966), 34 Ill. 2d 116, 122, 214 N.E.2d 771, quoting People ex rel. Illinois State Bar Association v. Schafer (1949), 404 Ill. 45, 52, 87 N.E.2d 773.

In this case, First Federal prepared the mortgages for its own purposes. In addition, First Federal did not provide legal advice to mortgagors and did not prohibit them from retaining an attorney. First Federal was merely preparing the mortgage documents; this without more does not constitute the practice of law. Further, this finding is consistent with Johnson v. Pistakee Highlands Community Association (1979), 72 Ill. App. 3d 402, 390 N.E.2d 648. The Johnson case involved a secretary of a corporation who filed a lien against certain property owned by the Johnsons. The court stated the issue in the case was whether the ...


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