OPINION 134
June 1956

SOLICITATION -- PRINTED FORMS -- Providing printed forms of agreements for use in sales of real estate which show the names of the attorneys issuing them and also show their firm name as escrow agents is prohibited even though the parties requesting the forms are the attorney's clients.

Canon 24.

Question

This question was first submitted to the Committee on Interpretation of the Canons of Ethics for the 1954-55 period, but action by the committee was withheld because the inquiry was then pending before a grievance committee.

Since then the chairman of this committee has received the following letter from the chairman of the grievance committee involved:

"(There has been) forwarded to me a photo copy of your letter dated October 18, 1955, concerning inquiry of …. involving the practice by a firm of attorneys here of providing printed forms of agreements for use in sales of real estate with their firm name shown as escrow agent.

"This committee held a hearing last night on the complaint …… against the firm that provides these forms. The evidence showed that these lawyers have a Form No. 25 entitled 'Real Estate Sales Agreement (Providing for Title Insurance),' a copy of which is enclosed, and a Form No. 26 entitled 'Real Estate Sales Agreement (Assumption of Existing Loan),' a copy of which is enclosed. These forms are printed in lots of 1000 to 5000 and assembled in pads. The attorneys involved stated that they do not make any distribution of the forms except to parties requesting them and that the parties requesting the forms are their clients already or by asking for the forms indicate that they expect to use the services of their firm. They estimate that ten or fifteen local real estate firms have picked up and now have some of the unused forms. A former president of the Real Estate Board, who testified for them, said that he now has a pad of the forms.

"Our committee voted to hold in abeyance action on the complaint until further study and consideration whether the practice with respect to the forms is violative of the Canons of Ethics.

"We are not trying to avoid any of our responsibility but we feel that your committee, through broader and special experience in interpreting the Canons of Ethics, can reach a better informed opinion as to the propriety of the practice than we can. Also we feel that the attitude toward the practice ought to be uniform over the state. Accordingly, we would like very much to have the opinion and ruling of your committee.

"Actually, by indicating whether or not the practice is proper, you will not be determining whether disciplinary action will be taken by our committee, because if it is determined ultimately that the practice is not proper, members of the firm involved have indicated that they will cease and desist or at least modify their practice to conform with any rule, and under these circumstances our committee will not feel compelled to take any further action."

On the real estate forms complained of, there are shown the names of the attorneys issuing them and at the bottom of each form there appears the following:

 

"Doe and Roe (the attorneys) hereby acknowledge receipt of the earnest money set out in Paragraph 7 hereof and agree to execute this trust for both parties hereto.

Doe and Roe, Attorneys

By……………………..

Dated………………………………….."

 

The question submitted is: Is this a violation of the Canons of Ethics regarding advertising?

Since the question was first submitted to the 1954-55 committee, that committee has been asked to render an opinion.

Opinion

The committee is of the opinion that the conduct complained of, as amplified and explained in the letter from the chairman of the grievance committee unqualifiedly violates Canon 24 of the Canons of Ethics of the State Bar of Texas. (5-1)