Swarb v. Lennox 8212

• Decision Date: 24 February 1972
• Docket Number: No. 70,70
• Citation: 405 U.S. 191,31 L.Ed.2d 138,92 S.Ct. 767
• Parties: Nellie SWARB et al., Appellants, v. William M. LENNOX et al. —6
• Court: U.S. Supreme Court

405 U.S. 191

92 S.Ct. 767

31 L.Ed.2d 138

Nellie SWARB et al., Appellants,

v William M. LENNOX et al.

No. 70—6.

Argued Nov. 9, 1971.

Decided Feb. 24, 1972.

Syllabus

Appellants (hereafter plaintiffs), purporting to act on behalf of a class consisting of all Pennsylvania residents who signed documents containing cognovit provisions leading, or that could lead, to confessed judgments in Philadelphia, brought this action challenging the Pennsylvania system as unconstitutional on its face as violative of due process. The three-judge District Court held that: the Pennsylvania system leading to confessed judgments and execution complies with due process only if 'there has been an understanding and voluntary consent of the debtor in signing the document'; plaintiffs did not sustain their burden of proof with respect to lack of valid consent in the execution of bonds and warrants of attorney accompanying mortgages; the record did not establish that the action could be maintained on behalf of natural persons with incomes over $10,000, but an action could be maintained for those who earn less than $10,000 and who signed consumer financing or lease contracts containing cognovit provisions; there was no intentional waiver of known rights by members of that class in executing confession of judgment clauses; and no judgment by confession might be entered after November 1, 1970, as to a member of the recognized class unless it is shown that the debtor 'intentionally, understandingly, and voluntarily waived' his rights; and the court declared the Pennsylvania practice of confessing judgments to be unconstitutional, prospectively effective as noted, as applied to the designated class, and enjoined entry of any confessed judgment against a member of the class absent a showing of the required waiver. The plaintiffs appealed, claiming that the entire Pennsylvania scheme is unconstitutional on its face. Held:

1. The Pennsylvania rules and statutes relating to cognovit provisions are not unconstitutional on their face, as under appropriate circumstances, a cognovit debtor may be held effectively and legally to have waived the rights he would possess if the document he signed had contained no cognovit provision. D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124. P. 200.

2. In light of the fact that the named defendants and the intervenors have taken no cross appeal, the affirmance of the judgment below does not mean that the District Court's opinion and judgment are approved as to other aspects and details that were not before this Court. P. 201.

314 F.Supp. 1091, affirmed.

David A. Scholl, Philadelphia, Pa., for appellants, pro hac vice, by special leave of Court.

Philip C. Patterson, Philadelphia, Pa., for appellees.

William L. Matz, Philadelphia, Pa., for Pennsylvania Savings and Loan League, as amicus curiae.

Mr. Justice BLACKMUN delivered the opinion of the Court.

This appeal, heard as a companion to D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 92 S.Ct. 775, 31 L.Ed.2d 124, decided today, also purports to raise for the Court the issue of the due process validity of cognovit provisions. The system under challenge in this case is that of Pennsylvania.¹ The three-judge District Court, with one judge dissenting in part because, in his view, the court did not go far enough, refrained from declaring the Commonwealth's rules and statutes unconstitutional on their face and granted declaratory and injunctive relief only for a limited class of cognovit signers. 314 F.Supp. 1091 (ED Pa. 1970). The plaintiffs, but not the defendants, appealed. We noted probable jurisdiction the same day certiorari was granted in Overmyer. 401 U.S. 991, 91 S.Ct. 1220. 28 L.Ed.2d 529.

I

The cognovit system is firmly entrenched in Pennsylvania and has long been in effect there.

A confession of judgment for money 'may be entered by the prothonotary . . . without the agency of an attorney and without the filing of a complaint, declaration or confession, for the amount which may appear to be due from the face of the instrument,' Pa.Rule Civ.Proc. 2951(a), except that the action must be instituted by a complaint if the instrument is more than 10 years old or cannot be produced for filing, 'or if it requires the occurrence of a default or condition precedent before judgment may be entered.' Rules 2951(c) and (d). In an action instituted by a complaint, the plaintiff shall file a confession of judgment substantially in a prescribed form, and the attorney for the plaintiff 'may sign the confession as attorney for the defendant' unless a statute or the instrument provides otherwise. Rule 2955. The prothonotary enters judgment 'in conformity with the confession.' Rule 2956.² The amount due, interest, attorneys' fees, and costs may be included by the plaintiff in the praecipe for a writ of execution. Rule 2957.

Within 20 days after the entry of judgment the plaintiff shall mail the defendant written notice. Failure to do this, however, does not affect the judgment lien. Rule 2958(a). Within the same 20 days the plaintiff may issue a writ of execution and may do so even if the notice is not yet mailed. Rule 2958(b). If an affidavit of mailing is not filed within the 20-day period, the writ of execution may not issue until 20 days after the affidavit of mailing has been filed. Rule 2958(c).

Relief from a judgment by confession may be sought by a petition asserting '(a)ll grounds for relief whether to strike off the judgment or to open it . . .. Rule 2959(a). If the petition states prima facie grounds for relief, the court issues a rule to show cause and may grant a stay. A defendant 'waives all defenses and objections' not included in the petition. The court 'shall dispose of the rule on petition and answer, and on any testimony, depositions, admissions and other evidence.' Rules 2959 (b), (c), and (e). If the judgment is opened in whole or in part, the issues are then tried. Rule 2960.

The procedure for confession of judgment for possession of real property is essentially the same except that the action shall be commenced by filing a complaint. Rules 2970—2973.

The prothonotary specifically is given power to 'enter judgments at the instance of plaintiffs, upon the confessions of defendants.' Pa.Stat.Ann., Tit. 17, § 1482. The prothonotary is the clerk of the court of common pleas. He has no judicial function. It has been said that his power is derived from the instrument under which he acts and not from his office, Smith v. Safeguard Mut. Ins. Co., 212 Pa.Super. 83, 87, 239 A.2d 824, 826 (1968), and that his entry of judgment is a ministerial act, Lenson v. Sandler, 430 Pa. 193, 197, 241 A.2d 66, 68 (1968).

It has also been said that the confession of judgment procedure in Pennsylvania exists 'independent of statute.' Equipment Corp. of America v. Primos Vanadium Co., 285 Pa. 432, 437, 132 A. 360, 362 (1926); Cook v. Gilbert, 8 Serg. & R. 567, 568 (1822); Hatch v. Stitt, 66 Pa. 264 (1870).

It is apparent, therefore, that in Pennsylvania confession-of-judgment provisions are given full procedural effect; that the plaintiff's attorney himself may effectuate the entire procedure; that the prothonotary, a nonjudicial officer, is the official utilized; that notice issues after the judgment is entered; and that execution upon the confessed judgment may be taken forthwith. The defendant may seek relief by way of a petition to strike the judgment or to open it, but he must assert prima facie grounds for this relief, and he achieves a trial only if he persuades the court to open. Meanwhile, the judgment and its lien remain.

The pervasive and drastic character of the Pennsylvania system has been noted. Cutler Corp. v. Latshaw, 374 Pa. 1, 4—5, 97 A.2d 234, 236 (1953). See Kine v. Forman 404 Pa. 301, 172 A.2d 164 (1961), and Atlas Credit Corp. v. Ezrine, 25 N.Y.2d 219, 303 N.Y.S.2d 382, 250 N.E.2d 474 (1969).

II

Seven individuals are the named plaintiffs in the original complaint filed in December 1969. Jurisdiction is based on the civil rights statutes, 28 U.S.C. § 1343 and 42 U.S.C. § 1983. The plaintiffs purport to act on behalf of a class consisting of all Pennsylvania residents who have signed documents containing cognovit provisions leading, or that could lead, to a confessed judgment in Philadelphia County. The defendants are the county's prothonotary and sheriff, the officials responsible, respectively, for the recording of confessed judgments and for executing upon them. The complaint alleges that each plaintiff has signed one or another type of consumer financing agreement pursuant to which his creditor has entered judgment; that each faces immediate judicial sale of his home or personal belongings; that the Pennsylvania rules and statutes are unconstitutional on their face because they deprive members of the class of procedural due process in the denial of notice and hearing before judgment; that the signing of the cognovit contract was not an intelligent and voluntary waiver of the right to notice and hearing; that the only recourse against the recorded judgment is an action to strike or reopen; and that such recourse is costly and burdensome to low income consumers, and denies them equal protection. The relief sought is a declaration that the Pennsylvania rules and statutes are unconstitutional, and an injunction against the defendants' 'operating under the above acts and rules.' A three-judge court was requested.

The single District Judge entered a temporary restraining order staying execution of judgments against the seven plaintiffs. He also provided a procedure for add- ing additional plaintiffs. The three-judge court continued and expanded the restraining order to stay all executions upon confessed judgments in the Commonwealth. A number of additional plaintiffs were added, and one original plaintiff was dismissed from the case. A group of finance companies was permitted to intervene.

Stipulations were made....