Both the municipal court and Sully-Miller contend the Legislature is precluded by the separation of powers clause from designating those persons who are authorized to practice law.
In Brydonjack v. State Bar (1929) 208 Cal. 439 [281 P. 1018] we noted that "[a]dmission to practice is almost without exception conceded everywhere to be the exercise of a judicial function...." (Id., at p. 443.)
While recognizing "that the legislature may prescribe reasonable rules and regulations for admission to the bar" we held such "legislative regulations are, at best, but minimum standards unless the courts themselves are satisfied that such qualifications as are prescribed by legislative enactment are sufficient.... In other words, the courts in the exercise of their inherent power may demand more than the legislature has required. [Citations.]" (In re Lavine, supra, 2 Cal.2d 324, 328.)
The issue according to Merco is whether a corporation can appear in court in propria persona in the same way as a natural person. Prior to enactment of section 90 it was well established that a corporation could not so appear. "A corporation cannot represent itself in court, either in propria persona or through an officer or agent who is not an attorney." (Vann v. Shilleh, supra, 54 Cal.App.3d 192, 199; see also Roddis v. All-Coverage Ins. Exchange (1967) 250 Cal.App.2d 304, 311 [58 Cal.Rptr. 530]; Himmell v. City Council (1959) 169 Cal.App.2d 97, 100 [336 P.2d 996]; Paradise v. Nowlin (1948) 86 Cal.App.2d 897, 898 [195 P.2d 867].) Merco contends the established rule is inapplicable because, for the first time, section 90 expressly provides for representation in propria persona. A party appearing in propria persona, Merco contends, is not engaged in the practice of law contrary to the dictates of the Constitution and this court, because such party is not appearing in a representative capacity.
Merco's argument requires further examination of corporate existence. It is fundamental, of course, that a "corporation is a distinct legal entity separate from its stockholders and from its officers." (Maxwell Cafe v. Dept. Alcoholic Control (1956) 142 Cal.App.2d 73, 78 [298 P.2d 64].) "A corporation ... in its corporate ... rights and liabilities ... is as distinct
To presume, as we must if we are to follow Merco's reasoning, that a corporation can act without representation, is a fiction we cannot accept. (See American Center for Education, Inc. v. Cavnar (1972) 26 Cal.App.3d 26, 36 [102 Cal.Rptr. 575]; Roddis v. All-Coverage Ins. Exchange (1967) 250 Cal.App.2d 304, 311 [58 Cal.Rptr. 530].)
We recognize, of course, that corporations are represented in small claims court by persons who are not members of the State Bar. Such representation is authorized by statute (Code Civ. Proc., § 117 et seq.) as interpreted and approved by court decision (Prudential Insurance Co. v. Small Claims Court (1946) 76 Cal.App.2d 379 [173 P.2d 38, 167 A.L.R. 820]). Merco quotes from Prudential for the proposition that "the common law rule that prohibits a corporation from appearing in legal proceedings in propria persona may be modified by the Legislature."
Prudential stands for two propositions which are important to our determinations here. First, a corporation not itself being a natural person, can make a court appearance only through a natural person — obviously a person other than the corporate person. Second, because the statute cannot be construed as intending to deny to a corporation the right to sue or defend in small claims court, it can appear in such court through a natural person as an exception to a literal reading of former section 117g.
In net effect our holding today is to deny the Legislature's invitation to permit a person with no demonstrable skills as an attorney to represent a corporation in municipal court merely because such person may be a director, officer or employee of the corporation. We are not authorized, of course, to reject in the usual course of our judicial function a legislative enactment merely because we deem it serves no desirable purpose. But when the matter at issue involves minimum standards for engaging in the practice of law, it is this court and not the Legislature which is final policy maker.
We deem, also, Code of Civil Procedure section 90 not to serve the general welfare in that it would authorize the appearance, in behalf of a corporation, of almost any person selected by a corporation regardless of the length of his association or employment, his position with the corporation, or his training, character and background. Thus an "employee" could be a disbarred attorney who becomes employed solely for the purpose of bill collection, moving in and out of court and from corporation to corporation. Or he could be a paraprofessional who, while having failed to pass a bar examination, is nevertheless not precluded from practicing law so long as he confines his client/employer to corporations and his practice to justice and municipal courts.
The judgment is affirmed.
Mosk, J., Richardson, J., and Manuel, J., concurred.
I dissent. It may be that section 87 of the Code of Civil Procedure is not a perfect answer to the vexing problem of participation by nonlawyers in adjudicatory proceedings. The majority of this court now intervenes, however, to restrict seriously the Legislature's power to seek imaginative and improved answers to that vexing problem.
I am not persuaded here that the Legislature has violated the vague commands in article III, section 3 of the California Constitution. Nor am I persuaded that the word "court" (compared, say, with the phrase "administrative tribunal") should trigger automatically the monopoly that some people think inheres in article VI, section 9 of the Constitution, regarding the State Bar. (Cf. Eagle Indem. Co. v. Industrial Acc. Com. (1933) 217 Cal. 244, 247-249 [18 P.2d 341]; and see Bennett, Non-Lawyers and the Practice of Law Before State and Federal Agencies (1960) 46 A.B.A.J. 705; State Bar Reports (Dec. 1977-Jan. 1978) p. 14 ["90,000 California lawyers in 1984"].)
Bird, C.J., concurred.
Although past decisions recognize this court's ultimate policymaking role as to regulations affecting the "practice of law," none of the judicial
In placing corporate entities on an equal footing with individuals, sole proprietorships and partnerships that have long enjoyed in propria persona rights, the Legislature articulated the increasing public concern with the growing expense of legal services and the need to insure continued access to courts in controversies of less than major financial proportions. Failing to address the serious problem to which this legislation is directed, the majority invalidates the statutory enactment by simply speculating as to the abuses that the presence of nonattorneys in court may engender. In my view, such speculation fails to serve as a basis for invalidating the enactment, even as to a matter in which the judiciary shares policy making authority with the Legislature. Unless and until such a legislatively prescribed procedure demonstrably interferes with the administration of justice, I believe that the judiciary should grant to the instant modest legislative innovation the opportunity to prove itself in operation.
In invalidating section 87, the majority relies heavily on decisions from California and other jurisdictions embracing the common law rule that corporations must be represented by attorneys in courts of record. (See, e.g., Paradise v. Nowlin (1948) 86 Cal.App.2d 897 [195 P.2d 867].) All of the decisions, however, represent judicial declarations of the rights of corporations in the absence of a specific statutory authorization of in propria persona representation. The majority fails to cite a single decision in which a court has invalidated a statute, such as section 87, expressly permitting a corporation to be represented by a nonattorney employee.
Indeed, the Court of Appeal opinion in Prudential Insurance Co. v. Small Claims Court (1946) 76 Cal.App.2d 379 [173 P.2d 38, 167 A.L.R. 820], directly refutes the majority's conclusion that the Legislature lacks authority to grant in propria persona rights to corporations. In the Prudential Insurance case, Justice Peters (then on the Court of Appeal) initially recognized the "general rule that a corporation in the absence of statutory authority, even in its own behalf, cannot practice law." (Italics added.) (76 Cal. App.2d at p. 386.) Justice Peters went on to point out, however, that none of the earlier decisions establishing the "general rule" "dealt with a statutory situation such as is here involved. Here we have a
The majority suggests that the holding in Prudential was a necessary exception to the general rule prohibiting in propria persona representation by corporations: since section 117g provided that no attorney could represent a party in small claims court, "a corporation, although it could be sued in small claims, could not defend because [under a literal construction of that statute] it was incapable of defending through a natural person...." (Ante, p. 731.) The majority contends these "special circumstances" which justified in propria persona representation in small claims proceedings do not exist in municipal court. This analysis fails to acknowledge the underlying public policy on which the holding in Prudential was expressly based, and does not explain why that policy should not be applied with respect to municipal and justice court disputes as well as small claims.
The policies underlying both section 117g and the legislation at issue here are largely the same: Individuals have long been entitled to appear in propria persona because in many minor disputes the relatively small amount in controversy renders representation by counsel infeasible. A rule requiring representation by counsel in such disputes could well deny a potential litigant his right to judicial resolution of the dispute. As was aptly expressed by Justice Peters in Prudential: "Justice should not be a rich man's luxury. The Magna Carta guaranteed that justice would not be denied or delayed. Ever since 1215 those interested in the administration of justice have struggled somewhat unsuccessfully to live up to that promise so far as the poor litigant is concerned. The delay and expense incident to litigation have long discouraged the attempts of the poor litigant to secure redress for claims meritorious but small in amount. These cases are relatively of as great importance to those litigants as those heard in our highest courts, but the expense of employing an attorney and paying normal court costs is more than the cause will bear...." (76 Cal. App. at p. 383.)
Without question minor claims frequently arise in municipal and justice court in which the "cost of employing counsel is more than the cause will bear." In enacting section 87 the Legislature simply recognized
The majority emphasizes that municipal courts, unlike small claims courts, are courts of record in which "formal rules of procedure and evidence are to be observed by representatives of the parties, and the court is entitled to expect to be aided in the resolution of the issues by presentation of the cause through qualified professionals rather than a lay person." (Ante, p. 732.) While we recognize the courts' interest in assistance of counsel and maximum procedural efficiency, we doubt the majority's conclusion that corporations appearing in propria persona will unduly handicap a court of record. Individuals have long been permitted to proceed in propria persona; the legal system has not been left in shambles. In the absence of any showing, we cannot see how corporate in propria persona representation will have a more deleterious judicial effect.
The majority further suggests that section 87 dangerously opens the door for a "cadre of unprofessional practitioners" ethically unrestrained from abusing the judicial system and from taking unfair advantage of individual litigants, especially in debt collection matters. The majority engages in speculation in assuming, however, that corporations that appear in propria persona will cause greater injury than individual proprietors or partnerships that do so. The abstract distinction between sole proprietorships and partnerships, which ostensibly constitute "natural" persons, and corporations, which constitute "artificial" persons, has little bearing on the practical effect of nonattorney representation.
Both the nonattorney who represents his own business or his partnership, and the nonattorney who represents his corporate employer perform exactly the same functions both in and out of court. The majority fails to explain why the Legislature could not reasonably conclude that the latter class of corporate employees posed no greater danger to the public and the judicial system than the former class. In the past, trial courts have proven quite capable of handling any abuse of in propria persona privileges that may arise in the course of actual litigation; the majority
Of course, if the provisions of section 87 do in fact prove to create a significant danger to the public or to the administration of justice, our court retains the authority to invalidate the enactment under the "separation of powers" doctrine. In striking down the statute in the absence of any such showing, however, I believe the majority has acted prematurely and without due consideration of the important public policies reflected in the legislation. In my view, we should not hamper the Legislature's efforts to facilitate more procurable, accessible and equal justice and should allow this innovative legislation an opportunity to prove itself in actual operation.
Bird, C.J., concurred.
Section 90 was subsequently repealed and reenacted as Code of Civil Procedure section 87, identical to former section 90 except that it applies also to proceedings in justice courts. (Stats. 1976, ch. 1288, § 6.)