Egley v. T.B. Bennett & Co., 24723.

• Decision Date: 16 December 1924
• Docket Number: No. 24723.,24723.
• Citation: Egley v. T.B. Bennett & Co., 196 Ind. 50, 145 N.E. 830 (Ind. 1924)
• Parties: EGLEY v. T. B. BENNETT & CO.
• Court: Indiana Supreme Court

196 Ind. 50

145 N.E. 830

EGLEY

v.T. B. BENNETT & CO.^*

No. 24723.

Supreme Court of Indiana.

Dec. 16, 1924.

Appeal from Circuit Court, Wells County.

Action by T. B. Bennett & Co. against Noah Egley. Judgment for plaintiff, and defendant appeals. Affirmed.

Superseding former opinion, 144 N. E. 533, which superseded139 N. E. 385.

GAUSE, J.

Appellee, a corporation having its principal office and place of business in Illinois, recovered a judgment against appellant, a resident of Indiana, in the circuit court of Livingston county, Ill., on a note which was executed in Indiana, but which was made payable in the city of Flanagan, Ill. The note contained the following provision:

“I hereby irrevocably make any attorney at law my attorney for me and in my name to appear in any court of record, in term time or vacation, at any time hereafter to waive service of process and confess a judgment on this note in favor of the payee, his assigns or the legal holder, for such sum as shall then appear to be due, including an attorney fee (as stated) *** to release all errors *** and to consent to immediate execution on such judgment.”

After maturity, appellee brought suit on note in the circuit court of the county where said city is located; said court being a court of record and of general jurisdiction. No process was issued, and appellant had no notice or knowledge thereof. By virtue of the authority contained in said note, an attorney at law appeared and confessed judgment in appellant's name for the full amount thereof, together with interest, attorney's fees, and costs. Appellee brought this action upon said judgment, and the question for decision is as to the validity of said Illinois judgment.

It may be regarded as settled in this state that such a provision as is contained in the note involved would not authorize an attorney to appear for the defendant and confess judgment. See Irose v. Balla (1914) 181 Ind. 491 104 N. E. 851. However, it appears from the special findings in the case at bar that under the law of Illinois such a proceeding is valid. The question then arises if such a judgment is valid at the place where it is rendered, is it valid in this state, under the full faith and credit clause of the federal Constitution?

The general rule governing the effect in other states of a judgment confessed on warrant of attorney is stated in 2 Black, Judgments (2d Ed.) § 868, as follows:

“There is nothing in the character of a judgment entered upon confession without action to prevent it from being available as a cause of action in another state, equally as well as one rendered upon adversary proceedings. *** The sole question must be: What force and effect are accorded to the judgment in the state of its rendition?”

And in 2 Freeman, Judgments (4th Ed.) § 558a, it is said:

“A judgment by confession, whether made by defendant personally or by some one acting under a warrant of attorney granted by him, is entitled to the same faith and credit in other states as it has in the state wherein it was entered.”

The rule, as stated by the above authorities, was approved by this court in the case of Kingman v. Paulson (1891) 126 Ind. 507, 26 N. E. 393, 22 Am. St. Rep. 611. In the Kingman Case it does not appear where the note and warrant of attorney were executed, but it does appear that the note was payable in Illinois. Suit was brought on the note in that state, and an attorney appeared for the defendants by authority of the warrant of attorney and confessed judgment. It was held that the judgment rendered under such circumstances was not void, and not subject to collateral attack. The court in that case, quoted the section of the federal Constitution providing for full faith and credit being given in each state to the judicial proceedings of every other state, and cited Freeman on Judgments as authority for such decision.

But it is claimed, on behalf of appellant, that the fact of said note being executed in Indiana by a resident of this state, where a warrant of attorney for confession of judgment is not recognized as being sufficient authority for an appearance, renders such judgment void. We have heretofore called attention to the fact that, in the case of Kingman v. Paulson, supra, it does not appear whether the note and warrant of attorney were executed in Indiana, but the very fact that the opinion does not mention the place of its execution, but does set out that it was to be performed in Illinois, shows that the court attached no importance to the place of execution, but that the place of payment was material.

The facts in the case of Vennum v. Mertens, 119 Mo. App. 461, 95 S. W. 292, are parallel to the facts in the case at bar, and in that case the court said:

“The note was made payable in the state of Illinois, and the instrument shows on its face that the parties had the laws of that state in mind when they produced the writing and signed it, so that it is immaterial at what particular locality it was signed. The laws of the state where the note was made payable, and by which the parties intended its validity and enforceability should govern, are controlling in this proceeding. *** Judgments on confession on warrant of attorney, if valid in the state where taken, are recognized and treated as valid in this state, under that clause of the federal Constitution which requires the courts of each state to give ‘full faith and credit’ to the judgments of sister states.”

See, also, Krantz v. Kazenstein, 22 Pa. Super. Ct. 275;Randolph v. Keiler, 21 Mo. 557;Sipes v. Whitney, 30 Ohio St. 69;Snyder v. Critchfield, 44 Neb. 66, 62 N. W. 306, and cases cited in note to 38 L. R. A. (N. S.) 814.

It was held by this court, in the case of Irose v. Balla, supra, that, since it is against the policy of the courts of this state to recognize a warrant of attorney as sufficient authority for a confession of judgment in this state, such a warrant contained in a note payable in this state, and where it is presumed the authority to confess judgment was to be exercised, would not authorize the use of such authority in another state where it is not shown that such authority is recognized. In other words, it was held in the case cited that the note was payable in Indiana, and there was no proof that such authority was recognized in Illinois.

But the court expressly pointed out that it was not holding that, if the note was payable in Illinois and it was shown that such authority was valid in Illinois, the judgment will be subject to attack, and said: “We might have a very different question under a note payable in Illinois or executed there.”

It is argued that, because such a warrant of attorney is not recognized in Indiana as being sufficient authority for the confession of judgment, our courts should, on grounds of public policy, refuse to recognize a judgment rendered in pursuance to such authority, although such a judgment is valid in the state where rendered. We know of no rule of public policy which requires us to go to that extent.

We have no statute or positive law which prohibits the making of such a contract as here involved, or that makes such a contract absolutely void. It is merely unenforceable in this state. This would not justify us in holding that it is against public policy to recognize that a citizen of this state might not execute in Indiana a contract of this kind that was to be performed in another state where such performance would be legal. This court, in the case of Irose v. Balla, supra,...