Hutson v. Christensen

• Decision Date: 22 December 1972
• Docket Number: No. 43351,43351
• Citation: 295 Minn. 112,203 N.W.2d 535
• Parties: Robert HUTSON, et al., Respondents, v. Larry CHRISTENSEN, et al., Appellants,
• Court: Minnesota Supreme Court

Page 535

203 N.W.2d 535

295 Minn. 112

Robert HUTSON, et al., Respondents, v. Larry CHRISTENSEN, et al., Appellants,

No. 43351.

Supreme Court of Minnesota.

Dec. 22, 1972.

Syllabus by the Court

Since confession-of-judgment clauses under Illinois law are authorized only for debts of a certain definite and fixed sum, the Circuit Court of Cook County, Illinois, did not have jurisdiction to order judgment against defendants for damages to an apartment rented pursuant to a lease containing a confession-of-judgment clause. Judgments obtained without jurisdiction are not entitled to full faith and credit in a Minnesota district court.

Nord, Webster & Brennan and Richard Baldwin, St. Paul, for appellants.

Robert Hutson, pro se.

Heard before KNUTSON, C.J., and OTIS, KELLY, and TODD, JJ.

KELLY, Justice.

Plaintiffs brought suit in the district court upon a cognovit judgment obtained in the Circuit Court of Cook County, Illinois. The district court granted plaintiffs summary judgment on the basis that the Illinois judgment was entitled to full faith and credit in Minnesota. We reverse.

The record indicates that defendants leased an apartment from plaintiffs in Arlington Heights, Illinois, for $275 a month. Among the provisions in the standard printed lease agreement was the following confession of judgment and power of attorney:

'The Lessee hereby irrevocably constitutes any attorney of any court of record in this state, attorney for Lessee in Lessee's name, on default by Lessee of any of the covenants herein, and upon complaint made by Lessor, his agent or assigns, and filed in any such court to enter Lessee's appearance in any such court of record, waive process and service thereof, and confess judgment, from time to time, for any rent which may be due to Lessor, or the Lessor's assignees, by the terms of this lease, with costs and a reasonable sum for attorney's fees, and to waive all errors and all right of appeal from said judgment, and to consent in writing that a writ of execution may be issued immediately.'

The lease also made defendants responsible for all repairs and damage to the apartment, providing that 'the expense of such repairs shall be included within the terms of this lease and any judgment by confession entered therefor.'

Thereafter, defendants moved to Minnesota. On August 6, 1970, plaintiffs, pursuant to the portions of the lease quoted above, obtained a judgment for $1,048.35 in the Cook County court. Two months later plaintiffs brought suit upon the Illinois judgment in the District Court of Hennepin County. Defendants contended that $275 of the Illinois judgment represented rent and that the balance was for claimed damage to the apartment. Defendants specifically denied doing any damage to the apartment. The district court awarded judgment to the plaintiffs, stating that the Illinois judgment was entitled to full faith and credit in Minnesota.

Mr. Justice Blackmun, in a recent decision, described a cognovit judgment similar to the one obtained in Illinois in this case as follows:

'The cognovit is the ancient legal device by which the debtor consents in advance to the holder's obtaining a judgment without notice or hearing, and possibly even (as in the instant case) with the appearance, on the debtor's behalf, of an attorney designated by the holder. It was known at least as far back as Blackstone's time. 3 W. Blackstone, Commentaries

Page 397

In a case applying Ohio law, it was said that the purpose of the cognovit is 'to permit the note holder to obtain judgment without a trial of possible defenses which the signers of the notes might assert.' Hadden v. Rumsey Products, Inc., 196 F.2d 92, 96 (CA 2 1952). And long ago the cognovit method was described by the Chief Justice of New Jersey as 'the loosest way of binding a man's property that ever was devised in any civilized country.' Alderman v. Diament, 7 N.J.L. 197, 198 (1824). Mr. Dickens noted it with obvious disfavor. Pickwick Papers, c. 47.'

D. H. Overmyer Co. Inc. v. Frick Co., 405 U.S. 174, 176, 92 S.Ct. 775, 777, 31 L.Ed.2d 124, 128 (1972).

Cognovit judgments in Illinois are authorized by Ill.Rev.Stat. c. 110, § 50(3) (1967):

'Any person for a debt bona fide due may confess judgment by himself or attorney duly authorized, without process. The application to confess judgment shall be made in the county in which the note or obligation was executed or in the county in which one or more of the defendants reside or in any county in which is located any property, real or personal, owned by any one or more of the defendants. A judgment entered by any court in any county other than those herein specified has no force or validity, anything in the power to confess to the contrary notwithstanding.'

Generally, as in the case before us, the debtor is unaware of any legal proceedings until after judgment has been entered against him. The judgment may be executed immediately unless the debtor, in the most diligent manner, ¹ moves the court to open the judgment. At this point, the defendant has the burden of going forward with an affidavit to demonstrate that he has a prima facie defense. ² The court is given wide discretion with respect to its decision about whether to open the matter. ³ Only after the judgment is opened does the plaintiff have the burden of proof. ⁴

Defendants, in their answer, assert that most of the $1,048.35 is for alleged damage to the apartment, and, as we indicated earlier, the lease contained a confession-of-judgment provision in the clause relating to damage to the apartment. This portion of the cognovit violates Illinois law. Confession-of-judgment clauses in Illinois are authorized only for debts of a certain definite and fixed sum. In the early case of Little v. Dyer, 138 Ill. 272, 27 N.E. 905 (1891), the lease provided for payment of a fixed sum for rent and also provided that any payments made by the lessor for utilities were 'additional rent.' The lease also provided for confession of judgment 'from time to time for any rent which may then be due by the terms of this lease.' The Illinois court invalidated a confession of judgment which apparently included utility bills paid by the lessor. The court's harsh criticism of the procedure is appropriate to the case at bar:

'* * * It would be absurd to contend that such unrestricted power was given to the creditor or His attorney, and a rule such as that would be in the highest degree productive of fraud and subversive of justice, and would be tantamount to making one of the parties in interest not only both plaintiff and defendant, but court also, and that, too, in his own cause.' 138 Ill. 279, 27 N.E. 906.

Confession-of-judgment clauses are valid in Illinois for the rent specified in the lease ⁵ but not for utilities ⁶ or rent due by reason of a tenancy created by the tenant's holding over after the termination of the lease. ⁷

In Grundy County Nat. Bank v. Westfall, 49 Ill.2d 498, 275 N.E.2d 374 (1971), the highest court in Illinois reaffirmed this limitation upon cognovit judgments. There, the debtor received from the bank six separate loans which were guaranteed by the debtor's wife. The guaranty agreement promised full and prompt payment of 'any and all indebtedness, liabilities and obligations of every nature and kind of said Debtor to said Bank, and every balance and part thereof, whether now owing or due, or which may hereafter, from time to time, be owing or due, and howsoever heretofore or hereafter created or arising on evidenced to the extent of--* * *.' The amount of $50,000 was later written in the blank, so the final clause read 'to the extent of $50,000.' 49 Ill.2d 501, 275 N.E.2d 376. The court vacated the cognovit judgment which the bank had obtained against the debtor's wife and guarantor because '(t)he authorization was not for a fixed sum specified or one ascertainable from the instrument itself.' 49 Ill.2d 503, 275 N.E.2d 376.

A portion of the Illinois court's opinion in Grundy County Nat. Bank v. Westfall Supra, is highly significant to the instant case:

'We consider that the judgment by confession was improperly entered, as the warrant of attorney upon which it was confessed was not legally sufficient. As a consequence the circuit court was Without jurisdiction to enter the judgment and, the judgment being void, it must be vacated and the cause remanded.' (Italics supplied.) 49 Ill.2d 500, 275 N.E.2d 375.

The confession of judgment in the case before us suffers from the same defect. The Circuit Court of Cook County, Illinois, had no jurisdiction to enter a judgment for damages and repairs to the apartment which defendants occupied. ⁸ Judgments obtained without jurisdiction are not entitled to full faith and credit.

Defendants wish us to declare that a cognovit judgment obtained in a foreign state by confession of judgment which gives the debtor no notice or opportunity to appear and contest is violative of the due process clauses contained in the Federal Constitution and is therefore not entitled to full faith and credit in the courts of Minnesota.

In D. H. Overmyer Co. Inc. v. Frick...