19731
COMMENTS
ans, Spanish-Americans, Oriental Americans, Eskimos and Aleuts.
Vietnam-era service in the Armed Forces may be a contributing factor
in establishing social or economic disadvantage. 4 '
This expansion, obviously influenced by the program's developmental
history, will serve to reinforce the 8(a) program's viability before the
courts. But it is only one aspect of the overall problem. The SBA should
not only define the intended beneficiaries of the program, but must
prove the legitimacy of its decision-making processes. Until this is
achieved, the 8(a) program will most likely be subject to a new phase
of litigation focusing on its actual mechanics rather than its constitutional or statutory validity.
ANTHONY THEOPHILOS
JURISDICTIONAL FACTS IN ENFORCEMENT
ACTIONS ON COGNOVIT JUDGMENTS OF
SISTER STATES-THE VOLUNTARY WAIVER.
INTRODUCTION
Despite longstanding irreverance for the cognovit judgment,1 the
practice of confessing judgment 2 under a warrant of attorney 3 continues
148. Id.
1. See Hopson, Cognovit Judgments: An Ignored Problem Of Due Processand Full
Faith and Credit, 29 U. CHI. L. REV. 111, 131 (1961). See also Hunter, The Warrant
ofA ttorney to Confess Judgment, 8 OHIO ST. L.J. 1 (1941). Student analysis of cognovit
practices has been exhaustive. See, e.g., Note, Swarb v. Lennox: The Validity of Repeated JudicialAttacks on Confessions of Judgment in Pennsylvania, 34 U. PITT. L.
REV. 103 (1972); Note, Enforcement of Sister States' Cognovit Judgments, 16 WAYNE
L. REV. 1181 (1970); Comment, Cognovit Judgments and the Full Faith and Credit
Clause, 50 B.U. L. REV. 330 (1970); Comment, The Effect of Full Faith and Credit on
Cognovit Judgments, 42 U. COLO. L. REV. 173 (1970); Note, Cognovit Judgments
Under Fire in New York: Right Answer, Wrong Reason, 21 SYRACUSE L. REV. (1969);
Note, A Clash in Ohio? Cognovit Notes and the Business Ethic of the U.C.C., 35 U.
CIN. L. REV. 470 (1966); Comment, Confessions of Judgment, 102 U. PA. L. REV. 524
(1954). For judicial criticism of the practice of confessing judgment under a warrant of
attorney see Alderman v. Diament, 7 N.J.L. 197, 198 (1824); Cutler v. Latshaw, 374
Pa. 1, 4, 97 A.2d 234, 236 (1939).
2. The origin of the practice of confessing judgment is virtually unknown. Lock v.
Leslie, 248 I11.App. 438 (1928). Its roots are traceable into early common law. See 3
W. BLACKSTONE, COMMENTARIES 397 (1916); Cuykendall v. Doe, 129 Iowa 453, 105
N.W. 698 (1906); Van Norman v. Gordon, 172 Mass. 576, 53 N.E. 267 (1899). For
historical references to cognovit practices see General Contract Purchase Corp. v. Max
Keil Real Estate Co., 35 Del. 531, 532-33, 170 A. 797, 798 (Super. Ct. 1933); First
766
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 22
to be the harshest method of obtaining judgment against a debtor. These
judgments have their basis in the cognovit' which is a device by which
the debtor consents in advance to have judgment entered against him
without notice or hearing on any claims that his creditor may subsequently make. At the time of entry of judgment the debtor is only
nominally represented by an attorney, who is often designated by the
creditor and ordinarily unknown to the debtor.5 The practical effect of
the cognovit agreement is to give the creditor an immediate and uncontested judgment against the debtor. Since the debtor waives notice, he
receives none and is a fortiori denied an opportunity to appear at a
hearing to offer whatever defenses that he may have against the claims
asserted.' Typically, the debtor first becomes aware of the judgment
Nat'l Bank v. White, 220 Mo. 717, 728-32, 120 S.W. 36, 39-40 (1909); Tyrell v.
Hilton, 92 Md. 176, 48 A. 55 (1900).
3. A warrant of attorney is a grant of authority executed by an obligor to have an
attorney act as his agent in confessing judgment against him on claims arising out of a
contract. Alliance First Nat'l Bank v. Spies, 158 Ohio St. 499, 110 N.E.2d 483 (1953).
The distinctive features of a warrant are that it is given in advance to the commencement
of an action upon the contract and service'of process is waived. To be valid, a warrant
of attorney to confess judgment must be in writing and signed by those who are to be
bound by it. See L.B. Foster Co. v. Tri-W Constr. Co., 409 Pa. 318, 186 A.2d 18 (1962);
Wolf v. Gaines, 33 111. App.2d 428, 179 N.E.2d 466 (1961). Warrants are usually
attached to or incorporated in some other instrument, such as a promissory note, a
bond, a lease, or a conditional sales contract. See, e.g., Withers v. Starace, 22 F. Supp.
773 (E.D.N.Y. 1938) (warrant contained in mortgage bond); Ellis v. Gordon, 202 Wis.
134, 231 N.W. 585 (1930) (warrant contained in lease).
4. The cognovit agreement is usually evidenced by a note which is executed by the
debtor and retained by the creditor throughout the debt period. The cognovit note in
issue in Douglas v. Beneficial Fin. Co., 334 F. Supp. 1166 (D. Alas. 1971) is illustrative
of such an agreement:
Undersigned jointly and severally authorized and empower any attorney of law
of any court of record of the State of Alaska or elsewhere in the United States
to appear for the undersigned . . . on an action on this note in any court of the
United States . . . at any time after default in the payment of the amount of any
installment or principal and interest thereon, and confess judgment against ...
the undersigned for the amount due with interest and charges. . . all without any
benefit of valuation and appraisal laws. All parties hereto severally waive demand
and presentment, notice of nonpayment, notice of protest and protest on the
note. . ..
Id. at 1170.
5. D. H. Overmyer Co. v. Frick Co., 405 U.S. 174, 176 (1972).
6. Or, as Judge Musmano critically observed:
The signer deprives himself of every defense and every delay of execution, he
waives exemption of personal property from levy and sale. . . he places his cause
in the hands of a hostile defender. The signing of a warrant of attorney is equiva-
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rendered against him when enforcement of the judgment is sought,7
either in a court of the state where the original judgment was entered
or, in a court of 8another state, through the operation of the full faith
and credit clause.
The purpose of this comment is to examine the jurisdictional issues
that arise when a forum court is asked to enforce a cognovit judgment
of a sister state. As will be seen, forum courts have regularly applied
the traditional rules that govern the recognition of foreign judgments to
cognovit judgment cases. The only special rule that has developed over
the years that has specific applicability to cognovit consent cases has
taken the form of a "strict compliance" test. In applying this test,
however, forum courts have gone only so far as to determine whether
the plaintiff-creditor faithfully observed the terms of the warrant of
attorney at the time of entry of judgment and have consistently ignored
the more essential issue of whether the defendant-debtor's consent to the
warrant was validly obtained.
This comment will briefly examine the current judicial approaches to
the enforcement of sister state cognovit judgments. It is submitted,
however, that the unique jurisdictional issues that underlie cognovit
judgments demand that forum courts adopt a somewhat different judicial approach to their enforcement. That approach should center on a
rigorous investigation, by the forum court, of the consent agreement in
the cognovit instrument. Constitutionally, a forum court is required to
recognize a foreign judgment only where the rendering court was jurisdictionally competent to enter judgment? Since a court that renders a
cognovit judgment could only have obtained jurisdiction by virtue of the
consent agreement, a forum court must determine whether such consent
agreement was validly obtained from the defendant and fully complied
lent to a warrior of old entering a combat by discarding his shield and breaking
his sword.
Cutler v. Latshaw, 374 Pa. 1, 4, 97 A.2d 234, 236 (1939).
7. Osmond v. Spence, 327 F. Supp. 1349, 1354 (D. Del. 1971).
8. "Full Faith and Credit shall be given in each State to the public Acts, Records,
and judicial Proceedings of every other State." U.S. CONST. art. IV, § 1. The sweeping
constitutional mandate is effecuated through 28 U.S.C. § 1738 (1970) which provides
that "Such Acts, records and judicial proceedings . . . shall have the same full faith
and credit in every court within the United States and its Territories and Possessions
as they have by law or usage in the courts of such State, Territory or Possession from
which they are taken."
9. Johnson v. Mulberger, 340 U.S. 581 (1951); Williams v. North Carolina, 325 U.S.
226 (1945); Thompson v. Whitman, 85 U.S. (18 Wall.) 457 (1873).
768
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 22
with by the plaintiff. Two recent Supreme Court cases," ° which will be
discussed in the final section of this comment," shed considerable light
to those who would fashion a test to determine when the consent agree-
ment embodied in the cognovit instrument was validly obtained from
the defendant. That such a test is required in cognovit judgment cases
is manifested: (1) by the special characteristics of "cognovit consent",
as opposed to "ordinary consent", situations; (2) by the adhesive nature
of cognovit contracts on consumer debtors; and (3) by the jurisdictional
implications of a cognovit defendant's waiver of due process rights.
I.
TRADITIONAL CONFLICT OF LAW RULES-APPLICABILITY OF COGNOVIT JUDGMENTS
The Constitutional mandate of the full faith and credit clause requires that a judgment be given the same effect by a sister state court
as it would be given in the rendering state.'2 A forum court may not
inquire into the substantive validity, that is, the merits of a foreign
judgment, 3 irrespective of whatever errors of law underlie that judgment. Unless the jurisdictional issues have been fully and fairly litigated, 5 however, a forum court, when asked to give full faith and credit
to a foreign judgment, may inquire into the jurisdictional bases of the
rendering court. 6 Once the jurisdictional questions are raised, the forum
10. D. H. Overmyer Co. v. Frick Co., 405 U.S. 173 (1972); Swarb v. Lennox, 405
U.S. 191 (1972).
11. See notes and text accompanying notes 106-32, infra.
12. U.S. CONST. art. IV, § 1 effected through 28 U.S.C. § 1738 (1970). See Adam
v. Saenger, 303 U.S. 59, 62 (1938); Mills v. Duryee, 11 U.S. (7 Cranch) 481,484 (1813).
See also Hancock Nat'l Bank v. Farnum, 176 U.S. 640 (1900) (District court judgment
must be accorded the same effect in other states as given in the state in which the district
court is situated.).
13. Milliken v. Meyer, 311 U.S. 457, 462 (1940); Fauntleroy v. Lum, 210 U.S. 230,
237 (1907). See Titus v. Wallick, 306 U.S. 282 (1939); Roche v. McDonald, 275 U.S.
449 (1928). Moreover, a state cannot by statute authorize review of the merits of a
foreign judgment. Christmas v. Russell, 72 U.S. (5 Wall.) 290 (1866) (Mississippi
statute which permitted state courts to look behind judgments rendered in other states
declared unconstitutional.).
14. Milliken v. Meyer, 311 U.S. 457, 462 (1940) citing Fauntleroy v. Lum, 210 U.S.
230, 237 (1908) ("Whatever mistakes of law may underlie the judgment . . . it is
'conclusive as to all the media concludendi'.").
15. Durfee v. Duke, 375 U.S. 106 (1963); Davis v. Davis, 305 U.S. 32 (1938); Stoll
v. Gottlieb, 305 U.S. 165 (1938).
16. Williams v. North Carolina, 325 U.S. 226 (1945); Adam v. Saenger, 303 U.S.
59 (1938); Grover & Baker Sewing Mach. Co. v. Radcliffe, 137 U.S. 287 (1899). Where
the record of a judgment appears on its face to be a record of a court of general
jurisdiction, jurisdiction over the subject matter and the parties is presumed, unless
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court may consider extrinsic evidence as to whether the rendering court
had jurisdiction over both the subject matter 17 and the parties.18 Recognition and enforcement of the foreign judgment will be denied if either
is insufficiently present. In resolving the jurisdictional issues, the forum
state's law and public policy is generally irrelevant."9 Instead, the forum
court must determine whether the judgment was authorized under the
laws of the rendering state and whether such laws are constitutional."
A.
Enforcement of Foreign Cognovit Judgments
The general principles, set out above, have been applied to foreign
cognovit judgments with regularity. The cases have generally held that
a judgment of a sister state, entered upon a warrant of attorney to
confess judgment, is entitled to full faith and credit, notwithstanding the
fact that the defendant receives no notification of the judgment.2' As a
disproved by extrinsic evidence or by the record itself. 303 U.S. at 62. See Cook v. Cook,
342 U.S. 126 (1951); Titus v. Wallick, 306 U.S. 282 (1939). The presumption ofjurisdiction accorded to foreign judgements has generally been applied to judgments entered
upon a warrant of attorney. See Withers v. Starace, 22 F. Supp. 773 (E.D.N.Y. 1938).
However, before any foreign judgment may be recognized there must be proper authentication of the judgment. Authentication requires the attestation of the clerk and the
seal of the court annexed to the court record, together with a certificate of a judge of
the court that the said attestation is in proper form. 28 U.S.C. § 1738 (1970). A duly
authenticated judgment of a court of general jurisdiction is prima facie evidence of the
court's jurisdiction and right to render judgment. Barber v. Barber, 323 U.S. 77 (1944).
17. See, e.g., Thompson v. Whitman, 85 U.S. (18 Wall.) 457 (1873), where the Court
held that the record of a forefeiture judgment of a sister state was not conclusive on
the forum court and, since the rendering court had improperly assumed jurisdiction over
the res, full faith and credit must be refused.
18. See, e.g., Williams v. North Carolina, 325 U.S. 226 (1945), where a forum court,
in collaterally attacking an ex parte divorce decree, refused recognition of a decree
rendered by a state court that did not have the defendant properly before it. But see
Wayside Transp. Co. v. Marcell's Motor Express, Inc., 284 F.2d 868 (1st Cir. 1960)
where the court of appeals held that an unappealed decision by a district court giving it
jurisdiction over a defendant's person was conclusive and not subject to collateral attack
on that basis when sued upon in another federal court.
19. In Fauntleroy v. Lum, 210 U.S. 230 (1908), the Supreme Court held that the
Mississippi courts were required to enforce a Missouri judgment on a cause of action
arising in Mississippi where it was not only unenforceable but also illegal. Compare
Kenney v. Supreme Lodge, 252 U.S. 411 (1920) with Milwaukee County v. M.E. White
Co., 296 U.S. 268, 273 (1935) (dictum). See generally Sumner, Full Faith and Credit
for JudicialProceedings, 2 U.C.L.A. L. REv. 441, 488 (1955).
20. See Adam v. Saenger, 303 U.S. 59 (1938).
21. See, e.g., Kirbens v. Wodis, 295 F.2d 372 (7th Cir. 1961); Turner v. Alton
Banking & Trust Co., 181 F.2d 899 (8th Cir.), cert. denied, 340 U.S. 533 (1950);
Westwater v. Murray, 245 F. 427 (6th Cir. 1917). See also Scott Paper Co. v. Johnson,
THE AMERICAN UNIVERSITY LAW REVIEW
[Vol. 22
rule, the courts have not found it offensive to procedural due process
guarantees that the attorney who confesses judgment under a warrant
of attorney is also plaintiff's attorney."2 Similarly, the fact that the
cognovit defendant is a nonresident of the state where judgment is confessed has been viewed as immaterial.23 Moreover, a forum court may
not refuse to enforce a sister state cognovit judgment simply because its
internal law does not authorize such judgments." Except in the unusual
situation where the forum court has applied its own choice of law rules
which require the application of its internal laws,2 5 a forum court may
406 S.W.2d 548 (Tex. Civ. App. 1966); McDade v. Moynihan, 330 Mass. 437, 115
N.E.2d 372 (1953); Ellwanger v. Agostos, 255 S.W.2d 492 (Ky. 1953); Federal Land
Bank v. Garman, 220 N.C. 585, 18 S.E.2d 182 (1953); W.H. Barber Co. v. Hughes,
223 Ind. 570, 63 N.E.2d 417 (1945); Picking v. Local Loan Co., 185 Md. 253, 44 A.2d
462 (1945); Bond v. Farmers & Merchants Nat'l Bank, 64 Cal. App.2d 842, 149 P.2d
722 (Dist. Ct. App. 1944).
22. In Withers v. Starace, 22 F. Supp. 773 (E.D.N.Y. 1938), the district court held
that judgments by confession are entitled to full faith and credit even though the same
attorney who appeared for the plaintiff in the action also confessed judgment against
the defendants on the warrant of attorney. The court based its holding on the ground
that a cognovit defendant never intends to have the normal confidential attorney-client
relationship with the attorney he authorizes in advance to confess judgment on his
behalf. See also Gotham Credit Corp. v. Powell, 22 N.J. Misc. 301, 38 A.2d 700 (Dist.
Ct. 1944).
23. Kirbens v. Wodis, 295 F.2d 372 (7th Cir. 1961); Bower v. Casanave, 44 F. Supp.
501 (S.D.N.Y. 1941); McDade v. Moynihan, 330 Mass. 437, 115 N.E.2d 372 (1953);
Morris v. Douglas, 237 App. Div. 747, 262 N.Y.S. 712 (1933). But see Bland v. White,
138 Misc. 715, 246 N.Y.S. 532 (Sup. Ct. 1930); Baldwin Bldg. & Loan Ass'n v. Klein,
136 Misc. 752, 240 N.Y.S. 804 (Sup. Ct. 1930), affd 230 App. Div. 830, 244 N.Y.S.
899 (1930). In Withers v. Starace, 22 F. Supp. 773 (E.D.N.Y. 1938), the district court
reasoned that, if consent be a valid method of establishing jurisdiction, it should make
little difference whether the individual who consents be a resident or nonresident of the
state so long as judgment is entered in compliance with such consent. However, the
argument has since been made that the "consent" embodied in a cognovit agreement
may not be a sufficient "contact" with the jurisdiction where judgment is rendered
unless some other independent basis of jurisdiction is evident. Surely, the defendant's
residence would be a factor under this jurisdictional approach. See International Shoe
Co. v. Washington, 326 U.S. 310 (1945). See also note 85, infra. But see note 75, infra.
24. Monarch Refrigerator Co. v. Farmers' Peanut Co., 74 F.2d 790 (4th Cir.),
cert. denied, 295 U.S. 732 (1935); United Mercantile Agencies v. Bissonnette, 155 Fla.
22, 19 So.2d 466 (1944); Anderson v. Reconstruction Fin. Corp., 281 Ky. 531, 136
S.W.2d 741 (1940); International Harvester Co. v. Solazo, 116 W.Va. 34, 178 S.E. 429
(1935); Snyder v. Critchfield, 44 Neb. 66, 62 N.W. 306 (1895).
25. See, e.g., Pearson v. Friedman, 112 So.2d 894 (Fla. Dist. Ct. App. 1959) where
an Illinois judgment secured on a Florida cognovit note was denied enforcement in
Florida, since Florida's choice of law rule required the application of Florida law which
forbade cognovits. See also Monarch Refrigerating Co. v. Faulk, 228 Ala. 554, 155 So.
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COMMENTS
not refuse recognition of a foreign cognovit judgment merely because
its own law prohibits confessions of judgment under domestic warrants
of attorney."8
As noted previously, a forum court may not entertain defenses which
go to the merits of a cognovit judgment,2 7 but such court is not precluded
74 (1934); Bernard Cloeckler Co. v. Baker Co., 52 S.W.2d 912 (Tex. Civ. App. 1932).
But see Gotham Credit Corp. v. Powell, 22 N.J. Misc. 301, 38 A.2d 700 (Dist. Ct. 1944).
The courts are in disagreement on the question of what law governs the validity of a
warrant of attorney to confess judgment. See, e.g., Mountain States Fixture Co. v.
Daskalos, 61 N.M. 491, 303 P.2d 698 (1956) (validity of warrant determined by the law
of the place of performance); South Orange Trust Co. v. Barrett, 45 Del. 533, 76 A.2d
310 (Super. Ct. 1950) (validity of warrant determined by the law of the state where
principal obligation is payable); Gramatan Nat'l Bank & Trust Co. v. Barron, 193 Md.
649, 69 A.2d 489 (1949) (validity of warrant determined by the law of the state of its
execution); W. H. Barber Co. v. Hughes, 223 Ind. 570, 63 N.E.2d 417 (1945) (validity
of warrant determined by the law of the state with the closest "contact"); Monarch
Refrigerating Co. v. Faulk, 228 Ala. 554, 155 So. 74 (1934) (validity of warrant determined by the law of the state in which entry of judgment is sought or obtained). Where
the law of a sister state is not pleaded in an enforcement action on a cognovit judgment,
the forum court will presume that the law of the sister state conforms with the common
law, as interpreted by the decisions of the forum state. This, of course, may result in
the forum court's refusal to enforce a cognovit judgment, otherwise valid under the laws
of the state where rendered. See, e.g., Greenfield v. Chronicle Printing Co., 107 Ga.
App. 442, 130 S.E.2d 526 (1963). Cf. McNair v. Underwood, 55 Okla. 585, 155 P. 553
(1916).
26. Turner v. Alton Bank & Trust Co., 181 F.2d 889 (8th Cir.), cert. denied, 340 U.S.
833 (1950); Westwater v. Murray, 245 F. 427 (6th Cir. 1917); Mountain States Fixture
Co. v. Daskalos, 61 N.M. 491, 303 P.2d 698 (1956); W. H. Barber Co. v. Hughes, 223
Ind. 570, 63 N.E.2d 417 (1945); Carroll v. Gore, 106 Fla. 582, 143 So. 633 (1932).
27. Bower v. Casanave, 44 F. Supp. 501 (S.D.N.Y. 1941) (Defendant's allegation of
failure of consideration goes to merits and not jurisdictional validity of foreign cognovit
judgment.); Household Fin. Corp. v. Rogers, 249 S.W.2d 820 (Ky. 1952) (Defendant's
denial of debt owed is insufficient defense to attack validity of foreign cognovit judgment
on jurisdictional grounds.); Morris v. Douglas, 237 App. Div. 747, 262 N.Y.S. 712
(1933) (Defendant's allegation that he was only an accomodation maker is insufficient
defense in enforcement action on foreign cognovit judgment.). However, where defendant alleges prior payment or satisfaction of the underlying obligation, a valid defense
to enforcement of a foreign cognovit judgment is raised and recognition may be denied
by the forum court. This defense is rationalized under the theory that the power of
attorney to confess judgment has been extinguished by payment prior to the exercise of
such power. See, e.g., First Nat'l Bank v. Cunningham, 48 F. 510 (6th Cir. 1891);
Consumer Credit v. Bowers, 104 S.E.2d 869 (W.Va. 1958); Perkins v. Hall, 123 W. Va.
707, 17 S.E.2d 795 (1941); Smithman v. Gray, 203 Mich. 317, 168 N.W. 1001 (1918);
Cowen v. Culp, 97 Wash. 480, 166 P. 789 (1917). Prior payment or satisfaction of the
principal obligation in a cognovit note should always be a viable jurisdictional defense
in enforcement actions. Since the rendering court only acquires jurisdiction through the
consent embodied in the cognovit instrument, if such consent is withdrawn by defendant,
then no jurisdiction could be had.
772
THE AMERICAN UNIVERSITY LA W REVIEW
[Vol. 22
from impeaching the validity of a judgment where it is shown that the
rendering court was without proper judicial authority." Thus, in collaterally attacking a cognovit judgment of a sister state a party may question the validity of the warrant of attorney upon which judgment was
confessed and through which the rendering court purportedly acquired
jurisdiction to enter judgment.2 9 A cognovit judgment may be impeached either where the warrant of attorney does not comport with the
law of the rendering state' or where the scope of an otherwise valid
31
warrant has been exceeded.
B.
"Strict Compliance Rule"
There is a dearth of Supreme Court authority on what rules govern
32
the recognition of foreign cognovit judgments. In two early cases,
28. See Antonelli v. Silvestri, 137 N.E.2d 146 (Ohio App. 1955); South Orange Trust
Co. v. Barrett, 45 Del. 533, 76 A.2d 310 (Super. Ct. 1950); Motsinger v. Walker, 205
Ark. 236, 168 S.W.2d 385 (1943); Acme Feeds v. Berg, 231 Iowa 1271, 4 N.W.2d 430
(1942); Bonnet-Brown Sales Serv. v. Utt, 323 Mo. 589, 19 S.W.2d 888 (1929).
29. See, e.g., Atlas Credit Corp. v. Ezrine, 25 N.Y.2d 219, 250 N.E.2d 474, 303
N.Y.S.2d 382 (1969) where the New York appellate court held that a warrant of
attorney that permitted entry of judgment by confession anywhere in the world without
notice violated due process and deprived the rendering court of jurisdiction. The Atlas
case represents a bold departure from traditional notions of full faith and credit and
has been severely criticized. See note and text accompanying note 63, infra. Most forum
courts look to whether the warrant of attorney contains certain necessary provisions.
See, e.g., Henry Bierce Co. v. Hunt, 170 So.2d 99 (Fla. App. 1964) where the Florida
court denied enforcement of an Ohio cognovit judgment entered upon a warrant of
attorney which did not indicate the place of execution or delivery. Forum courts may
also inquire into whether the warrant of attorney was validly executed by the defendant
or someone authorized to act on his behalf. See, e.g., Bower v. Casanave, 44 F. Supp.
501 (S.D.N.Y. 1941); First Nat'l Bank v. Brown, 119 Fla. 761, 162 So. 142 (1935);
Bonnett-Brown Corp. v. Coble, 195 N.C. 491, 142 S.E. 772 (1928). There is, however,
some disagreement as to whether fraud in procuring the instrument which contains the
power of attorney is a viable defense in an action to enforce a foreign cognovit judgment.
Compare Wismo Co. v. Martin, 186 Minn. 593, 244 N.W. 76 (1932) with International
Harvester Co. v. Solazo, 116 W.Va. 34, 178 S.E. 429 (1935). The better view is to allow
the defense since any fraudulent inducement of the defendant obviously vitiates any
"consent" by him to the personal jurisdiction of the rendering state.
30. See, e.g., South Orange Trust Co. v. Barrett, 45 Del. 533, 76 A.2d 310 (Super.
Ct. 1950). The statutory procedure of the rendering state must be followed. If it is not,
enforcement may be denied. See Snydam v. Bank of Silver Spring, 233 F.2d 21 (D.C.
Cir. 1956).
31. See, e.g., Gundlach v. Park, 140 Minn. 78, 165 N.W. 969 (1918). But see Bower
v. Casanave, 44 F. Supp. 501 (S.D.N.Y. 1941).
32. See National Exch. Bank v. Wiley, 195 U.S. 257 (1904); Grover & Baker Sewing
Mach. Co. v. Radcliffe, 137 U.S. 287 (1899).
1973]
COMMENTS
however, the Supreme Court ruled that effect need not be given to
foreign cognovit judgments where the plaintiff, in securing a judgment
on a cognovit instrument, did not strictly observe the terms of the
cognovit's consent agreement. In Grover & Baker Sewing Machine Co.
v. Radcliffe,3 the Court held that a foreign cognovit judgment is
subject to collateral attack when it is shown that the plaintiff has not
complied with the literal terms of the cognovit's warrant of attorney.
In Radcliffe, the defendant, a Maryland resident, executed a cognovit
bond in Pennsylvania which authorized "any attorney of any court of
record
. . .
to confess judgment against him .
. . ."I' Judgment
was
confessed in Pennsylvania by a prothonotary rather than by an "attorney" and the subsequent enforcement of the judgment in the Maryland
courts was denied. The Supreme Court held that since the plaintiff had
not complied with the precise terms of the consent agreement, the rendering court was without jurisdiction to enter a judgment and, therefore,
the Maryland courts could properly decline recognition." Notwithstanding the fact that the prothonotary had authority to enter judgment
under Pennsylvania law, it was held that "a citizen of another state...
[cannot] be . . . presumptively held to knowledge and acceptance of
particular statutes of the latter state."3 Viewing anything less than
exact compliance with the terms of the consent agreement as a denial
of due process, the Court noted that "[b]y its terms he [defendant] did
not consent to be bound by the local laws of every state. . . relating to
the rendition of judgment against their own citizens without service or
appearance, but on the contrary made such appearance [by an attorney]
3' 7
a condition of judgment.
In NationalExchange Bank v. Wiley,3 8 the Court in a similar ruling,
held that the terms of the warrant were violated when judgment was
confessed in favor of an "assignee", when a warrant of attorney authorized confession of judgment only in favor of the "holder" of a cognovit
note. A judgment so entered is a personal judgment without service of
process or appearance and, thus, the rendering court has no authority
As in Radcliffe,4" the Court strictly conor jurisdiction to enter it."
33. 137 U.S. 287 (1899).
34. Id. at 298.
35. Id. at 298-99.
36. Id. at 299.
37. Id.
38. 195 U.S. 257 (1904).
39. Id. at 270.
40. Grover & Baker Sewing Mach. Co. v. Radcliffe, 137 U.S. 287 (1899).
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strued the consent agreement in favor of the maker noting that the
maker "never consented to judgment by confession in favor of one not
the owner of the note or entitled to its proceeds ..
."I' Since the
consent agreement was violated, the judgment was "wanting in due
process." 4
The "strict compliance" test formulated in Radcliffe and Wiley compels a forum court to decline recognition of sister state cognovit judgments where there has been less than exact compliance with the terms
of the cognovit's consent agreement. Since jurisdiction depends upon the
consent of the obligor as embodied in the consent agreement, noncompliance thereto renders such jurisdiction ineffective. And, of course,
a money judgment rendered by a court lacking personal jurisdiction
over the defendant contravenes the due process clause of the Constitution43 and is necessarily invalid.
The Radcliffe and Wiley cases represent the only Supreme Court
proclamations specifically dealing with foreign cognovit judgments.
These cases have been interpreted as supporting only the narrow proposition that the terms of a warrant of attorney must be strictly construed
by a forum court before credit may be given to a sister state judgment
based upon a warrant. 4 In addition, it has been suggested that the
Court, in proclaiming a rule of strict construction, ignored the more
essential issue of whether the cognovit's consent agreement itself was
vulnerable to attack as inherently violative of a cognovit defendant's due
process rights irrespective of plaintiff's complicity with the terms of the
warrant." Nevertheless, the strict construction test of Radcliffe and
Wiley has been used by forum courts46 to deny recognition of foreign
cognovit judgments on the ground that a violation of the terms of the
".
41. 195 U.S. at 270.
42. Id.
43. U.S. CONST. amend. XIV.
44. Atlas Credit Corp. v. Ezrine, 25 N.Y.2d at 227, 250 N.E.2d at 479, 303 N.Y.S.2d
at 389-90.
45. Note, Constitutional Law-Full Faith and Credit-Due Process-Enforcement
of Sister States' Cognovit Judgments, 16 WAYNE L. REV. 1181, 1185 (1970). On the
other hand, Professor Hopson reads the Radcliffe-Wiley cases as presenting essentially
due process arguments and views the rule enunciated in these cases as granting a large
measure of freedom to forum courts to use any law it wishes in order to find no consent.
See Hopson, supra note 1, at 148.
46. See, e.g., Bower v. Casanave, 44 F. Supp. 501 (S.D.N.Y. 1941); Bonnet-Brown
Sales Serv. v. Utt, 323 Mo. 589, 19 S.W.2d 888 (1929). But see Greenbaum & Sons
Bank & Trust Co. v. Porth, 116 Kan. 310, 226 P. 747 (1924).
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consent agreement, no matter how slight,47 abrogates the jurisdiction of
the rendering court.
C. JudicialApproaches to Enforcement
The lack of an express ruling from the Supreme Court on the
efficacy of using the consent agreement contained in a cognovit instrument as a valid mode of acquiring jurisdiction48 has resulted in disagreement among the courts as to its legitimacy in a jurisdictional context.
Two cases are illustrative of this discord. In Turner v. Alton Banking
& Trust Co.," an Illinois cognovit judgment was accorded full faith and
credit in a federal district court in Missouri. On appeal, the appellant
contended that there was a lack of due process in the Illinois court that
rendered the cognovit judgment since the appellant received no notification of the pendency of the suit against him. The court of appeals
construed the appellant's contention as assailing "as invalid for want of
due process all judgments upon cognovit notes entered upon the appearance for defendant by an attorney contained in the note."50 Upholding
the consent agreement as a proper jurisdiction-acquiring device, the
court ruled, inter alia, that: (1) so long as the cognovit judgment was
valid under the law of the rendering state, it was conclusive on all courts;
and (2) due process does not require notice where procedural safeguards
are established in conformity with state law. 51
Atlas Credit Corp. v. Ezrine,52 represents the most dramatic shift
from the traditional full faith and credit principles employed so easily
in Turner. In Atlas, the New York Appellate Court found that a Pennsylvania court lacked jurisdiction to render a cognovit judgment, despite
plaintiff's exact compliance with the terms of the warrant. The court's
decision was based on two grounds. First, since the Pennsylvania cognovit judgment did not provide the defendant with notice or an opportunity to defend, it was not a "judicial proceeding" under article four
of the Constitution. 53 Second, even assuming that the cognovit judgment did come within the purview of the full faith and credit clause, the
47. E.g., in Antonelli v. Silvestri, 137 N.E.2d 146 (Ohio App. 1955) a cognovit
judgment was denied credit where said judgment was confessed by one designated an
"esquire" instead of one designated an "attorney" as required in the warrant.
48. But see notes and text accompanying notes 78, 86, infra.
49. 181 F.2d 899 (8th Cir.), cert. denied, 340 U.S. 833 (1950).
50. 181 F.2d at 905.
51. Id.
52. 25 N.Y.2d 219, 250 N.E.2d 474, 303 N.Y.S.2d 382 (1969).
53. Id. at 230, 250 N.E.2d at 481, 303 N.Y.S.2d at 393.
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rendering court's jurisdiction, being predicated upon defendant's consent to jurisdiction as stated in the warrant of attorney, was invalid since
the warrant was too broad for purposes of due process. 4
In resolving the first issue, the Atlas court concluded that since cognovit judgments failed to "represent certain minimums of judicial process, ' 55 they fell outside the mandate of the full faith and credit clause.
The court reasoned that such judgments cannot properly be characterized as "judicial proceedings" since (1) the very nature of the cognovit
judgment procedure precludes judicial determination of the rights and
obligations under the contract when entry is made;" and (2) the entry
of a cognovit judgment involves neither exercise of judicial discretion
nor performance of a judicial act.5
Thus, analytically it is not correct to characterize a cognovit judgment
as a judgment in fact. It is merely called such. It never evidences any
judicial act. If this analysis be valid, then surely a cognovit judgment
entered on a warrant of attorney is not entitled to full faith and credit as
a judicial proceeding."
After concluding that the Pennsylvania cognovit procedure resulted in
"nonjudgments" that came outside the scope of article four, the court
reasoned that even under principles of comity, recognition will be refused where local policy is inimical to judgments by confession." Since
the cognovit procedure was found to be violative of New York public
54. Id. at 232, 250 N.E.2d at 482-83, 303 N.Y.S.2d at 393-94.
55. Id. at 229, 250 N.E.2d at 482, 303 N.Y.S.2d at 393. Even where a judgment is
consistent with due process, it may nevertheless be denied full faith and credit under
various circumstances. See, e.g., Wisconsin v. Pelican Ins. Co., 127 U.S. 265 (1888).
See also Huntington v. Attrill, 146 U.S. 657 (1892).
56. Under Pennsylvania's cognovit procedure, judgment is simply entered by the
prothonotary on application of the holder of the instrument containing the warrant of
attorney. PA. STAT. ANN., tit. 12, § 739 (Purdon Supp. 1973-74).
57. The pertinent Pennsylvania statute provides that "[iut shall be the duty of the
prothonotary. . . to confess judgment." PA. STAT. ANN., tit. 12, § 739 (Purdon Supp.
1973-74). The implication here is that the prothonotary is under a legal duty to
perform a ministerial function. See Kingston Nat'l Bank v. Walters, 63 A.2d 380 (Pa.
Super. Ct. 1949). In fact, the prothonotary is liable upon his official bond for the willful
neglect of such duties. Commonwealth v. Conard, 1 Rawle 249 (Pa. 1829).
58. 25 N.Y.2d at 230, 250 N.E.2d at 481, 303 N.Y.S.2d at 391.
59. The court noted that the applicability of New York public policy to the instant
case was not inconsistent with Fauntleroy v. Lum, 210 U.S. 230 (1908), wherein the
Supreme Court held that the forum state's local public policy is irrelevant in enforcement actions on foreign judgments. The court observed that the Supreme Court rule
"applies only to constitutionally protected judicial records or proceedings." 25 N.Y.2d
at 230, 250 N.E.2d at 481, 303 N.Y.S.2d at 391.
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policy,6" the court declined to give such credit to the Pennsylvania judgments.
The second issue that the Atlas court confronted was whether the
Pennsylvania court had personal jurisdiction over the defendant to ren-
der the cognovit judgment. Assuming, arguendo, that such judgments
constitute judicial proceedings within article four, the court held that if
the rendering court had jurisdiction, it would have to have been predicated upon the defendant's consent to jurisdiction as stated in the war-
rant of attorney. Since the warrant lacked "particularity in the selection
of a jurisdiction,"'" however, and since the warrant provided for no
notice to the cognovit defendants, the cumulative effect of these circum-
stances was held to violate due process 2and consequently deprive the
rendering court of personal jurisdiction.
The Atlas decision has been the subject of much well-founded criticism. 3 First, the Atlas court places a constrained interpretation on
what constitutes a "judicial proceeding" under article four of the Constitution. 4 Conspicuously absent from the court's opinion is a generally
60. The Atlas court determined that New York public policy opposed recognition of
judgments entered under Pennsylvania procedures and expressly overruled Teel v. Yost,
128 N.Y. 387, 28 N.E. 353 (1891) under which New York courts had traditionally
enforced Pennsylvania cognovits despite New York's statutory policy against such judgments. Chief Judge Fuld took exception to the majority's finding that New York public
policy opposed cognovit judgments, arguing that, although New York law placed certain procedural limitations on judgments by confession, it explicitly sanctioned the entry
of judgments by confession without notice to the debtor. 25 N.Y.2d at 235, 250 N.E.2d
at 484, 303 N.Y.S.2d at 395 (Fuld, C.J., dissenting).
61. Id. at 231, 250 N.E.2d at 482, 303 N.Y.S.2d at 392. In Atlas, the warrant of
attorney provided that "any Attorney of any Court of Record within the United States
of America, or elsewhere" could appear to confess judgment. Id. The court found that
such authority was "void for the comprehensive uncertainty." See Carlin v. Taylor, 76
Tenn. 666, 668 (1881), cited in 25 N.Y.2d at 231, 250 N.E.2d at 482, 303 N.Y.S.2d
at 392. See also Henry Bierce Co. v. Hunt, 170 So.2d 99 (Fla. App. 1964).
62. 25 N.Y.2d at 232, 250 N.E.2d at 482-83, 303 N.Y.S.2d at 393 (1969).
63. See, e.g., Recent Decision, Full Faith and Credit-ForeignCourts May Deny
Full Faithand Credit to Cognovit Judgments and Must Do So When Entered Pursuant
to an Unlimited Warrant of Attorney, 56 VA. L. REv.554, 563 (1970); Comment, The
Effect of Full Faith and Credit on Cognovit Judgements, 42 U. COLO. L. REv. 173,
180 (1970); Note, Constitutional Law-Full Faith and Credit-Due Process-Enforcement of Sister States' Cognovit Judgments, 16 WAYNE L. REv. 1181,
1188 (1970). Criticism of the Atlas holding is also evident in a judicial context. In
Osmond v. Spence, 327 F. Supp. 1349 (D. Del. 1971), the district court, when reviewing
the constitutionality of Delaware's cognovit practices found Atlas to be unauthoritative
since it failed to discuss or decide "the all-important issue of waiver." Id. at 1357.
64. The term "judicial proceeding" is undefined in the full faith and credit clause.
U.S. CONST.art. IV, § 1. The Atlas court apparently placed great weight on Professor
778
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[Vol. 22
accepted judicial definition of the term "judicial proceeding." It seems
logical to assume that the court, apparently motivated by a strong
dislike for cognovit practices generally, was disposed to fashioning a
definition to suit its specific purposes. Second, though the Pennsylvania
cognovit judgments may not be construed as being within the technical
purview of the term "judicial proceeding", the judgments may still fall
within the scope of article four. Such judgments could be construed as
"records" of the rendering state, entered in compliance with one of its
"public acts" and thus entitled to full faith and credit on that basis. 5
Sumner's definition of the term. He states that judicial proceedings are best classified
as "formal decisions rendered in controversies where the parties have been given notice
of the proceedings with an opportunity to be heard." Sumner, Full Faith and Credit
for JudicialProceedings, 2 U.C.L.A. L. REv. 441, 446 (1955), cited in 25 N.Y.2d at
229-30, 250 N.E.2d at 481, 303 N.Y.S.2d at 391. "Judgment" has been construed as
synonomous to "judicial proceeding." Professor Leflar defines a judgment, for purposes
of full faith and credit, as "a decision rendered by a judicial body organized as an arm
of the government, and acting as such, in a proceeding arising out of a claim formally
presented but determined only after fair notification and opportunity for hearing to
adverse claimants." R. LEFLAR, AMERICAN CONFLICTS LAW § 73, 166-67 (1968). The
Supreme Court has expanded the term "judicial proceeding" to include administrative
adjudications. See Industrial Comm'n v. McCartin, 330 U.S. 622 (1947); Magnolia
Petroleum Co. v. Hunt, 320 U.S. 430 (1943). See generally K. DAVIS, ADMINISTRATIVE
LAW §§ 18.01-. 12, 27.06 (1958). While the Atlas court undoubtedly defines "judicial
proceeding" strictly to include only such proceedings where some form of notice and
hearing is provided, it fails to address itself to the issue of a cognovit defendant's waivers
embodied in the warrant of attorney. See Osmond v. Spence, 327 F. Supp. 1349, 1357
(D. Del. 1971), discussed at note 63, supra and note 127, infra. Since a defendant may
validly waive his due process rights to notice and hearing, see National Equip. Rental,
Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1964), it is clearly arguable that a cognovit
judgment is nonetheless a judicial proceeding despite the absence of such procedural
safeguards.
65. The Atlas court saw only the issue of whether or not the Pennsylvania cognovit
judgments were "judicial proceedings" and was adversely influenced by their nonjudicial character. However, in Broderick v. Rosner, 294 U.S. 629 (1935), a New York
administrative assessment that apparently lacked judicial character was nevertheless
held to be entitled to full faith and credit in New Jersey on the theory that the statute
and the non-judicial administrative order in combination were "public acts." See also
Ohio v. Kleitch Bros., Inc., 357 Mich. 504, 98 N.W.2d 636 (1959), where a Michigan
court gave full faith and credit to an Ohio judgment on an assessment entered under an
Ohio tax statute. Though no notice and hearing were provided to the defendant, the
court concluded that even if the Ohio judgments were not judicial proceedings, "they
plainly represent 'records' of that state entered in compliance with one of its public acts
and should be given full faith and credit." Id. at 512, 98 N.W.2d at 643. In Atlas,
judgment was entered upon a warrant of attorney pursuant to a public act of Pennsylvania. See PA. STAT. ANN., tit. 12, § 739 (Purdon Supp. 1969). Once entered, the
judgment is arguably a record entered in accordance with a public act and, hence,
enforceable under the full faith and credit clause.
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The Atlas court's "oversight" in not considering the Pennsylvania judgments as "records" of that state's public law, reinforces the theory that
the court employed "end justifying means" reasoning.
Even the court's alternative argument is tenuous. Though conceding
that a contractual waiver of notice is constitutionally permissible66 the
court held that the rendering court was without jurisdiction to enter
judgment since the defendants' consent to entry of judgment anywhere
in the world was too broad to comport with due process guarantees. Yet,
as has been noted67 "[t]he harshness of cognovit judgments does not
really stem from the fact that they can be rendered anywhere, but rather
that they can be rendered at all." 68 Practically speaking, the defendant
who consents to have judgment entered against him in his own community without notice ordinarily has no better opportunity to defend
himself than one who consents to judgment anywhere.
Neither Turner nor Atlas provides a satisfactory judicial approach to
determining when a forum court should recognize foreign cognovitjudgments. The Turner court apparently drew no distinction between cognovit consent cases and ordinary consent cases70 and justified its inflexible application of traditional full faith and credit rules on that basis. The
Atlas court, on the other hand, was undoubtedly influenced by personal
disdain for cognovits, 71 and was led to deny their enforcement under
broad considerations of due process. Both courts missed the mark because neither court fairly considered the somewhat unique jurisdictional
issues that underlie cognovit consent cases. First, parties may consent
to the jurisdiction of a particular state in advance and may determine a
method of notice or waive notice altogether if they so desire.72 Second,
a cognovit defendant's consent is tantamount to the waiver of his consti66. 25 N.Y.2d at 231, 250 N.E.2d at 482, 303 N.Y.S.2d at 393. The Atlas court
quoted from National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311, 315-16 (1964),
wherein the Supreme Court held that "parties to a contract may agree in advance to
submit to the jurisdiction of a given court. . .
."
(emphasis added) and noted that
"what is significant in this language is the reference to a given court." Id. With the
holding in National Equip. Rental, thus limited, the Atlas court found that the case was
not controlling precedent in situations where the defendant's consent was to any court
as opposed to a specific court.
67. See Comment, The Effect of Full Faith and Credit on Cognovit Judgments, 42
U. COLO. L. REV. 173 (1970).
68. Id. at 180.
69. Id.
70. See notes and text accompanying notes 87-92 infra.
71. See Comment, Cognovit Judgments and the Full Faith and Credit Clause, 50
B.U. L. REV. 330, 340 (1970).
72. 375 U.S. at 315-16.
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tutional rights. Such waiver is valid if obtained intentionally, knowingly,
and voluntarily from the defendant. Third, since the rights waived by
the cognovit defendant are jurisdictional elements, the question of
waiver is a jurisdictional fact which must be established before the
enforcement of a foreign cognovit judgment is granted.
II.
CONSENT AS A BASIS OF JURISDICTION-DUE PROCESS REQUIREMENTS
In InternationalShoe v. Washington,7 3 the Supreme Court ruled
that the jurisdiction of a rendering court must be predicated upon "certain minimum contacts" with the person, transaction, or thing over
which judgment is sought. Historically, such minimum contacts have
been satisfied by personal service within the state,74 by domicile,7" by the
commission of tortious acts within the state,7 and by consent, either
statutorily implied by the actions of nonresidents" or by contractual
agreement of the parties.78 The concept of minimum contacts has been
73. 326 U.S. 310 (1945).
74. Pennoyer v. Neff, 95 U.S. 714 (1878).
75. Milliken v. Meyer, 311 U.S. 457 (1940); McDonald v. Mabee, 243 U.S. 90
(1917). Residence has also been held to be a valid "minimal contact." See Merritt v.
Heffernan, 142 Fla. 496, 195 So. 145 (1940); Rawstorne v. Maguire, 265 N.Y. 204, 192
N.E. 294 (1934). The Restatement also recognizes that residence alone may be sufficient
to support the exercise of personal jurisdiction by state courts. RESTATEMENT (SEcoND),
CONFLICT OF LAWS 30 (1971). For a discussion of the distinction between "residence"
and "domicile" as a basis of jurisdiction see Reese & Green, The Elusive Word, "Residence," 6 VAND. L. REV. 561 (1953); Beale, Residence and Domicile, 4 IOWA L. BULL.
3 (1918).
76. Hess v. Pawloski, 274 U.S. 352 (1927). See note 77 infra, where the Hess case
can be construed as centering on "implied consent" as the basis for personal jurisdiction.
See also Betcher v. Hay-Roe, 429 Pa. 371, 240 A.2d 501 (1968).
77. The non-resident motorist statutes are justified on the ground that the nonresident defendant has "impliedly consented" to submit to the personal jurisdiction of
the state's courts for tortious acts arising out of his operation of a motor vehicle on state
highways. 274 U.S. at 356. See also The Lafayette Ins. Co. v. French, 59 U.S. (18 How.)
451 (1856). But see Olberding v. Illinois Central R.R., 346 U.S. 338 (1953) where the
Court disputes the jurisdictional rationale of "implied consent" under non-resident
motorist statutes.
78. National Equip. Rental, Ltd. v. Szukhent, 375 U.S. 311 (1964). It is now generally recognized that parties to a contract may agree in advance to submit claims arising
under their contract to the courts of a particular jurisdiction. Wm. H. Muller & Co. v.
Swedish Am. Lines, Ltd., 224 F.2d 806 (2d Cir. 1955); Central Contracting Co. v. C.E.
Youngdahl & Co., 418 Pa. 122, 209 A.2d 810 (1965). The rule has been adopted by the
federal courts. Central Contracting Co. v. Maryland Cas. Co., 367 F.2d 341 (3d Cir.
1966); National Equip. Rental, Ltd. v. Sanders, 271 F. Supp. 756 (E.D.N.Y. 1967).
1973]
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greatly expanded by the Supreme Court to include even the slightest
contact. In McGee v. InternationalLife Insurance Co.,79 for example,
a non-resident corporation was held subject to the personal jurisdiction
of a state court in which the only contact present was the delivery of
but one insurance policy to a resident of the state, who mailed insurance
premiums to the defendant insurer from within the state and who re80
sided there at the time of his death.
The Court's inclination toward a progressive expansion of the permis-
sible bases of a state's personal jurisdiction over non-resident defendants
is reflected in the judicial development of the concomitant jurisdictional
element of notice. While service of process on non-resident defendants
had to be effected for many years by personal service within the state,8'
notice is now sufficient for purposes of due process under most state
long-arm statutes if sent directly to the non-resident defendant by mail
Such agreements are commonly referred to as "choice of forum" clauses. From a
jurisdictional standpoint, the valid execution of such a clause is a sufficient "contact"
to support the jurisdiction of the selected forum so long as the transaction underlying
the contract bears "an appropriate relation" to it. Uniform Commercial
Code § 1-105(1) [hereinafter cited as U.C.C.]. For an analysis of the "appropriate
relations" test of the U.C.C. in a full faith and credit context and a review of the
pertinent cases see Comment, Conflict of Laws and the "Appropriate Relations" Test
of Section 1-105 of the Uniform Commercial Code, 40 GEo. WASH. L. REV. 795
(1972). Ordinarily, a forum court will respect such agreements if found to be reasonable.
See, e.g., Cerro De Pasco Copper Corp. v. Knut Knudsen, O.A.S., 187 F.2d 990 (2d
Cir. 1951); Export Ins. Co. v. Mitsuii S.S. Co., 26 App. Div. 2d 436, 274 N.Y.S.2d 977
(1966). Accord, RESTATEMENT (SECOND), CONFLICT OF LAWS, § 80 (1971). As with
cognovit consent agreements, there has been a recent expression of concern for the
utilization of the "choice of forum clause" as a tool of abuse in standardized form
contracts. See In re Unterweser Reederei, 428 F.2d 888, 905 (5th Cir. 1970) (Wisdom,
J., dissenting). See also Ehrenzweig, Adhesion Contracts in the Conflict of Laws, 53
COLUM. L. REV. 1072 (1953); Comment, Enforceabilityof "Choice of Forum" Clauses,
8 CALIF. WEST. L. REV. 324, 334 (1972). Recently, the federal courts have expressed a
disposition in refusing to enforce "choice of forum" clauses where there is evidence that
such clauses were obtained as the result of adhesion. See, e.g., Hawaii Credit Card Corp.
v. Continental Credit Card Corp., 290 F. Supp. 848 (D. Hawaii 1968); Matthiessen v.
National Trailer Convey, Inc., 294 F. Supp. 1132 (D. Minn. 1968). The Restatement
attempts to provide reasonable protection against abuse by refusing to enforce such
clauses if "unfair and unreasonable."
LAWS § 80 (1971).
RESTATEMENT
(SECOND),
CONFLICT OF
79. 355 U.S. 220 (1957).
80. The Supreme Court in McGee, however, was positively influenced by what it
perceived to be a manifest interest of a state in protecting its citizens from unscrupulous
insurance dealers. Id. at 223.
81. Pennoyer v. Neff, 95 U.S. 714 (1878).
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[Vol. 22
outside the state. 82 Thus, in in personam actions, the notice requirement
may be satisfied by personal service within or without the state, substi-
tuted service by mail, or constructive service by publication, 3 so long
as the method chosen is reasonably calculated to apprise interested
parties of the action and to afford them an opportunity to defend against
84
claims made therein.
A.
Cognovit Consent Cases Distinguished
What is pertinent to a jurisdictional analysis of cognovit judgments,
however, is not whether consent itself is a sufficient "contact" to support in personam jurisdiction 5 but, instead, whether the nature of the
consent embodied in the cognovit contract is valid and reliable evidence
of personal submission by a resident or non-resident defendant to the
jurisdiction of a state court. Indeed the respected authorities in the area
of judicial jurisprudence view consent as a valid jurisdiction acquiring
device."8 However, as has been suggested, it is necessary for the courts
to "distinguish between ordinary 'consent' cases and those involving
'cognovits' "87 in fashioning jurisdictional rules.
Analysis of the two types of consent cases will reveal the basis for
somewhat different judicial treatment of cognovit consent cases. When
a defendant consents in advance to have all contract disputes submitted
to the courts and laws of a particular jurisdiction, for example, as he
might do if he executes a contract which contains a "choice of forum"
clause, 88 he only consents to have the subject matter of claims asserted
82. Travelers Health Ass'n v. Virginia ex rel. State Corp. Comm'n, 339 U.S. 643
(1950).
83. See, e.g., Huggins v. Dement, 13 N.C. App. 673, 187 S.E.2d 412 (1972) (Notice
of foreclosure of a deed of trust by sale as provided for in a deed and as required under
statute, which consisted of posting notice on court house door and publication in newspaper, was sufficient to meet minimum due process requirements even though debtors
were denied actual notice of sale.).
84. Mullane v. Central Hanover Bank & Trust Co., 339 U.S. 306 (1950).
85. Professor Paulsen, however, sees a possible jurisdictional argument under the
concepts enunciated in InternationalShoe. Of cognovits he notes that: "Perhaps judgments grounded in these consents are not in accordance with 'fundamental principles
of justice and fair play.'" Paulsen, Enforcing the Money Judgment of a Sister State,
42 IOWA L. REv. 202, 210 (1957), cited in Hopson, supra note 1, at 137.
86. See, e.g., A. EHRENZWEIG, CONFLICT OF LAWS PART ONE: JURISDICTION AND
JUDGMENTS § 30 (1959); G. STUMBERG, PRINCIPLES OF CONFLICT OF LAWS 81 (2d ed.
1951); R. LEFLAR, THE LAW OF CONFLICT OF LAWS, § 29 (1959); H. GOODRICH,
CONFLICT OF LAWS,
§§ 73, 196 (3d ed. 1949).
87. Hopson, supra note 1,at 138.
88. See note 78 supra.
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against him adjudicated in that particular jurisdiction. As such, he is not
denied his due process rights to notice and hearing. Consequently, he
will be notified of the pendency of claims against him arising under the
contract 9 prior to judgment. In addition, he will have an opportunity,
at a hearing, to present defenses on the merits of the claims asserted or
on threshold questions of jurisdiction. Similarly, when a defendant
"impliedly consents" to the jurisdiction of a particular state by virtue
of its non-resident motorist statute,"0 he will only come within the personal jurisdiction of its courts after some method of notice is imparted
to him.'
In cognovit consent cases, however, the defendant's consent extends
beyond the submission of any contract claims to the courts of a particu-
lar jurisdiction. It extends to the prosecution of those claims without
notice or hearing. Therefore, unlike ordinary consent cases, judgment
will necessarily be entered against the defendant before he has any
opportunity to defend on the merits or to attack the personal jurisdic-
tion of the court. The harsh effect of cognovit judgments on the defendant's due process rights to notice and hearing and the growing concern
for the likelihood of fraud and coercion that may easily underlie what
essentially is an adhesion contract, 2 compels courts to view cognovit
consent cases differently from ordinary consent situations.
89. The method of imparting notice is usually set out in the contract. The situation
in Elkin v. Austral-American Trading Corp., 10 Misc.2d 879, 170 N.Y.S.2d 131 (Sup.
Ct. N.Y. County 1957) is typical. There the parties to a contract that contained a choice
of forum clause agreed that "service of process may be made if registered special
delivery air mail addressed to the other party at his or its last known address." The court
upheld service of summons which complied with the method agreed upon between the
parties.
90. See, e.g., GA. CODE ANN. § 68-801 (Supp. 1967); CONN. GEN. STAT. ANN.
§§ 52-62 (Supp. 1973). See also note 77 supra.
91. Such notice is statutorily defined. See, e.g., DEL. CODE ANN. tit. 10, § 3112
(Supp. 1970) which authorizes service of process on the Secretary of State in civil
actions against non-resident motorists but requires that the non-resident defendant be
given notice of the pendency of the action by registered mail. If adequate notice to the
non-resident defendant is not provided in the statute, then the statute will be held
unconstitutional. See, e.g., Wuchter v. Pizzutti, 276 U.S. 13 (1928). See also note 92
infra.
92. Professor Hopson notes that early in the development of "implied consent" as a
jurisdictional basis, the Supreme Court, in Wuchter v. Pizzutti, 276 U.S. 13 (1928),
struck down a non-resident motorist statute which required only service on the Secretary
of State and provided for no specific requirement of notice to the non-resident defendant
thus leaving "open such a clear opportunity for fraud. . . or injustice" that a defendant
would certainly be deprived of his property without due process of law. Hopson, supra
note 1,at 140. He further observes that "[t]he Court viewed the statute as calling for
'enforced acceptance' thus rejecting the argument . . . that the defendant had 'con-
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Cognovits as Adhesion Contracts
Contracts of adhesion have been defined as "agreements in which one
party's participation consists in his mere 'adherence,' unwilling and
often unknowing, to a document drafted unilaterally and insisted upon
by what is usually a powerful enterprise."" Commonly associated with
the "form contract", the adhesion contract has proven to be a useful
method by which the stronger bargaining agent can offer his contract
on a take-it-or-leave-it basis. Any choice that the weaker bargaining
party, usually the consumer-purchaser, has in dealing freely with respect
to the essential terms of the contract is obviated by the fact that all
entities with whom he can deal offer essentially the same alternatives."
The one-sided nature of standardized contracts has spawned considerable inquiry about their commercial desirability and legality, both from
the commentators9 5 and the courts.9 6
Cognovits have been construed as adhesive in nature. 7 Evidencing a
commonality in form, cognovit provisions are contained in the standardized contracts of many of the commercial enterprises that direct their
sented' to such service." Id. Professor Hopson concludes that "[i]f cognovits are adhesive, the defendant's 'consent' is no more than an 'enforced acceptance,' struck down
in Wuchter v. Pizzutti." Id. at 141. In contractual consent cases involving "choice of
forum" clauses, the courts have not been unreluctant to refuse their enforcement where
evidence of adhesion or coercion exist. See, e.g., Matthiessen v. National Trailer Convey, Inc., 294 F. Supp. 1132 (D. Minn. 1968); Hawaii Credit Card Corp. v. Continental
Credit Card Corp., 290 F. Supp. 848 (D. Hawaii 1968).
93. Ehrenzweig, Adhesion Contracts in the Conflict of Laws, 53 COLUM. L. REV.
1072, 1075 (1953). Life insurance contracts were early identified as contracts of adhesion. See Patterson, The Delivery of a Life Insurance Policy, 33 HAItv. L. REv. 198,
222 (1919). The term has now been used to describe standardized commercial contracts
in such areas as consumer loans, real estate transactions, and conditional sales. See
generally Wilson, Freedom of Contractand Adhesion Contracts, 14 INT'L & COMPARATIVE L.Q. 172 (1965).
94. See, Henningson v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 86-89
(1960).
95. Discussion of adhesion contracts appears in a variety of legal contexts. See, e.g.,
Bright, Contracts of Adhesion and Exemption Clauses, 41 AUSTL. L.J. 261 (1967);
Wilson, supra note 93; Meyer, Contracts ofAdhesion and the Doctrineof Fundamental
Breach, 50 VA. L. REV. 1178 (1964); Shuchman, Consumer Credit by Adhesion
Contracts, 35 TEMPLE L.Q. 125 (1962); Grunfeld, Reform in the Law of Contract, 24
MODERN L. REV. 62 (1961); Ehrenzweig, supra note 93; Sales, StandardForm Contracts, 16 MODERN L. REV. 318 (1953); Kessler, Contracts of Adhesion-Some
Thoughts About Freedom of Contract, 43 COLUM. L. REV. 629 (1943).
96. See, e.g., Henningson v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69,
86-89 (1960).
97. Hopson, supra note 1, at 138-39.
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business toward the consumer-purchaser. Cognovits are perhaps most
prevalent in the finance industry 8 where the cognovit contract is rou-
tinely thrust upon the unwary and legally unsophisticated consumerborrower." Even the sophisticated borrower, who understands the harsh
legal consequences that might ensue as a result of his execution of a
cognovit, is placed in a precarious bargaining position. Since most consumer lending contracts contain the same cognovit provisions, he must
accept it or be denied a loan altogether.
The adhesive nature of cognovit contracts has led at least one court
to vacate a cognovit judgment where the debtor executed a lease which
contained a cognovit clause on the reverse side from where his signature
appeared.' Nevertheless, forum courts have, for the most part, given
little or no weight to "unconscionability" and "economic duress"'' 1 as
valid grounds for refusing credit to sister state cognovit judgments.' 2 In
doing so, the courts have failed to view the element of "unconscionability" as a jurisdictional issue. It seems clear, however, that if in fact a
debtor is fraudulently or unknowingly induced into executing a cognovit
contract, 03 or if any voluntary consent on his part is obviated by what
is essentially shown to be a coercive commercial setting,'"' then in fact
98. See generally id. at 114-25.
99. See Swarb v. Lennox, 314 F. Supp. 1091 (E.D. Pa. 1970), aff'd 405 U.S. 191
(1972).
100. Frantz Tractor Co. v. Wyoming Valley Nursery, 384 Pa. 213, 120 A.2d 303
(1956). See also Architectural Cabinets, Inc. v. Gaster, 291 A.2d 298 (Del. Super. 1971).
101. The Supreme Court has stated that "duress implies feebleness on one side,
overpowering strength on the other." United States v. Bethlehem Steel Corp., 315 U.S.
289, 300 (1942).
102. But see note 92 supra. Though in a non-full faith and credit context, many
jurisdictions have held as a matter of common law that unconscionable contracts are
not enforceable. See, e.g., Campbell Soup Co. v. Wentz, 172 F.2d 80 (3d Cir. 1948);
Indianapolis Morris Plan Corp. v. Sparks, 132 Ind. App. 145, 172 N.E.2d 899 (1961);
Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69, 84-96 (1960). Cf.
Williams v. Walker-Thomas Furniture Co., 350 F.2d 445 (D.C. Cir. 1965); 1 A.
CORBIN, CONTRACTS § 128 (1963). Under the U.C.C., enforcement of a contract or a
contract clause may be refused where the court finds, as a matter law, that such contract
or clause is unconscionable. U.C.C. § 2-302().
103. Where the jurisdiction of a state court rests solely on the defendant's alleged
consent in a cognovit instrument, that jurisdiction will be vitiated upon a showing that
the consent was inefficacious as, for example, because of forgery, see Anderson v.
Reconstruction Fin. Corp., 281 Ky. 531, 136 S.W.2d 741 (1940); or fraud, see Wismo
Co. v. Martin, 186 Minn. 593, 244 N.W. 76 (1932); Ashby v. Manley, 191 Iowa 113,
181 N.W. 869 (1921).
104. See In re Elkins-Dell Mfg. Co., Inc., 255 F. Supp. 864 (E.D. Pa. 1964), where
the district court, in determining whether a particular commercial setting supported
claims of unconscionability, viewed as pertinent such matters as (1) the financial posi-
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no consent is validly obtained." 5 Without defendant's consent there can
be no personal jurisdiction in situations where such consent is the basis
for jurisdiction. It is for this reason that forum courts must determine,
prior to enforcement of a sister state's cognovit judgment, whether the
specific elements of the consent agreement-the consent to have judgment entered against the defendant without notice or hearing-were
obtained intentionally, knowingly, and voluntarily from the defendant.
C.
Voluntary Waiver-A JurisdictionalFact
The validity of cognovit judgments entered upon a warrant of attorney was recently considered by the Supreme Court in two cases. In D.
H. Overmyer Co. v. Frick Co.' 0 and Swarb v. Lennox' 7 the Court, after
fully weighing the due process arguments, held that the respective cognovit practices of Ohio and Pennsylvania were not per se unconstitutional.
Overmyer involved corporate parties. Pursuant to a note executed by
the defendant (Overmyer), the plaintiff (Frick) through an attorney
unknown to, but purportedly acting on behalf of, the defendant caused
judgment to be entered on the note without personal service or prior
notice to the defendant. The cognovit procedure followed by the plaintiff
fully complied with Ohio law.' Overmyer challenged the Ohio judgtion of the parties; (2) the regularity of such agreements in the industry; (3) whether
the contract reflected anticipated risks; and (4) the availability of better contractual
arrangements elsewhere. Cf Walsh v. Ford Motor Co., 59 Misc. 2d 241, 298 N.Y.S.2d
538 (Sup. Ct. 1969); Ford Motor Co. v. Tritt, 244 Ark. 883, 430 S.W.2d 778 (1968);
Henningson v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960). The courts
have also looked to the knowledgeability of the person claiming unconscionability as a
relevant factor in determining the commercial setting within which the contract was
executed. See, e.g., K & C, Inc. v. Westinghouse Elec. Corp., 437 Pa. 303, 263 A.2d
390 (1970).
105. It has been suggested that in all cases where consent is obtained prior to suit,
the constitutionality of the jurisdiction of the state court may depend on the relative
bargaining position of the parties. For this reason it has been submitted that
"[]urisdiction should be disclaimed . . . in extreme cases, as a matter of due process,
when the note is coercive or involves the selection of a grossly inconvenient forum."
Comment, Developments in the Law-State Court Jurisdiction,73 HAitv. L. REv. 909,
945 (1960), cited in Hopson, supra note 1, at 139.
106. 405 U.S. 174 (1972).
107. 405 U.S. 191 (1972).
108. The statute in effect at the time of this case provided that judgment must be
confessed "in the county where the maker. . . resides or in the county where the maker
. . . signed the warrant of attorney authorizing confession of judgment." OHIO REv.
CODE § 2323.13 (Page Supp. 1968). The statute also provided for a method of imparting notice after entry of judgment by certified mail at the last known address of the
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ment and the statute upon which it was authorized as an unconstitutional denial of due process in that there was no personal service upon
the defendant company, no voluntary appearance by said defendant in
Ohio, and no genuine appearance by an attorney on its behalf. Overmyer contended that: (1) the voluntariness of a defendant's appearance,
for purposes of personal jurisdiction, is to be determined at the time of
entry of judgment, rather than at the time the cognovit is signed; (2) an
unauthorized appearance by an attorney on a defendant's behalf cannot
confer jurisdiction;" 9 and (3) the attorney who appeared in Ohio, osten-
sibly on the defendant company's behalf, was simply the plaintiff's
agent." 0
Petitioner Overmyer's constitutional argument was succinctly noted
by the Court: ". . . Overmyer's position here specifically is that it is
unconstitutional to waive in advance the right to present a defense in
an action on the note.""' The Court expressly rejected the petitioner's
argument that a "contract waiver" of notice and personal appearance
before any dispute has arisen and before suit has been filed is per se
violative of due process and therefore unenforceable. The Court noted
that "due process rights to notice" 2 and a hearing" 3 prior to a civil
judgment are subject to waiver."" 4 The Overmyer Court cited from its
previous language in NationalEquip. Rental, Ltd. v. Szukhent:" 5
[I]t is settled . . . that parties to a contract may agree in advance to
submit to the jurisdiction of a given court, to permit notice to be served
by the opposing party, or even to waive notice altogether."'
defendant. But, § 2323.13 was subsequently amended to also require a "warning" to
be inscribed in a conspicious place on the instrument containing the warrant of attorney.
See OHio REV. CODE § 2323.13 (Page Supp. 1972). The U.C.C. adopts a similar
technique in order to protect buyers from unexpected and unbargained-for warranty
disclaimers. See U.C.C. § 2-316(2). Cf. Douglas v. Beneficial Fin. Co., 334 F. Supp.
1166 (D. Alas. 1971).
109. See Bower v. Casanave, 44 F. Supp. 501 (S.D.N.Y. 1941). See also note 29
supra.
110. See note and text accompanying note 22 supra.
I11. 405 U.S. at 184.
112. See Kenny Constr. Co. v. Allen, 248 F.2d 656 (D.C. Cir. 1957); Bowles v. J.J.
Schmitt & Co., 170 F.2d 617 (2d Cir. 1948); Alland v. Consumers Credit Corp., 54
F.R.D. 252 (S.D.N.Y. 1971).
113. See Bodie v. Connecticut, 401 U.S. 371, 378-79 (1971), wherein the Court
acknowledged that "the hearing required by due process is subject to waiver." Accord,
RESTATEMENT (SECOND), CONFLICT OF LAWS § 75, Comment g.
114. 405 U.S. at 185.
115. 375 U.S. 311 (1964).
116. Id. at 315-16, cited in 405 U.S. at 185.
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The Court analogized the recognition of waiver of notice and hearing
in civil cases to similar waivers long recognized in criminal cases.", It
then adopted, for purposes of "corporate-property-right cases of this
kind", the same standard applicable to waiver in criminal proceedings;
that it be voluntary, knowing and intelligently made."' In applying this
standard to the instant case, the Court concluded:
We therefore hold that Overmyer in its execution and delivery to Frick
of the second installment note containing the cognovit provision, voluntarily, intelligently, and knowingly waived the rights otherwise possessed
to pre-judgment notice and hearing, and that it did so with full awareness
of the legal consequences."'
Though the Court sustained the constitutionality of cognovit judgments, it did not preclude the possibility that other cases may arise,
particularly in the area of consumer adhesion contracts, which would
require a contrary holding:
Our holding of course, is not controlling precedent for other facts of
other cases. For example, where the contract is one of adhesion, where
there is great disparity in bargaining power, and where the debtor receives
nothing for the cognovit provision, other legal consequences may ensue.,
Recognizing that cognovits executed between "equals" do not violate
due process guarantees to cognovit defendants, the Overmyer Court
distinguished the facts before it.
Overmyer is a corporation. Its corporate structure is complicated. Its
activities are widespread. . . . This is not a case of unequal bargaining
or overreaching. The . . . agreement, from the start was not a contract
of adhesion.'
117. 405 U.S. at 185, citing Illinois v. Allen, 397 U.S. 337, 342-43 (1970) (right to
be present at trial may be waived); Miranda v. Arizona, 384 U.S. 436, 444 (1966) (right
to counsel and privilege against self-incrimination may be waived); Fay v. Noia, 372
U.S. 391, 439 (1963) (waiver of rights to habeas corpus); Rogers v. United States, 340
U.S. 367, 371 (195 1) (right against compulsory self-incrimination can be waived). See
also Westblock v. Arizona, 384 U.S. 150 (1966) (right to counsel); Gideon v. Wainwright, 372 U.S. 335 (1963) (right to counsel); Aetna Ins. Co. v. Kennedy ex rel. Bozash,
301 U.S. 389, 393 (1937) (right to jury trial); Amos v. United States, 255 U.S. 313
(1920) (protections against illegal searches and seizures may be waived where there is
no coercion).
118. See Brady v. United States, 397 U.S. 742, 748 (1970); Miranda v. Arizona, 384
U.S. 436, 444 (1966).
119. 405 U.S. at 187.
120. Id.
at 188.
121. Id.
at 186.
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Indeed, not only was Overmyer a sophisticated corporate entity, but it
received adequate consideration in return for its execution of the cognovit122 and was, throughout the negotiation period that led up to and
culminated in the execution of the note, represented by counsel.
In a companion case, decided the same day as Overmyer, the Supreme Court was conveniently confronted with the exception it had
prospectively carved out in Overmyer. In Swarb v. Lennox,23 the Pennsylvania cognovit practices were challenged on due process grounds, but
this time in a consumer context. In Swarb, the plaintiffs brought a class
action in the federal district court on behalf of all Pennsylvania residents
who signed documents containing cognovit provisions that could lead to
confessed judgments in Philadelphia. They challenged the Pennsylvania
cognovit system as being unconstitutional on its face, in violation of the
due process clause. 124 The three-judge district court held that Pennsylvania's system, leading to confessed judgments and executions thereon,
complied with due process guarantees only if "there had been an understanding and voluntary consent of the debtor in signing the document."'12 The district court did not declare the Pennsylvania practice of
confessing judgments to be unconstitutional per se, but did find it unconstitutional as applied to members of a designated class (i.e., those persons who earned less than $10,000 annually and who signed consumer
financing or lease contracts).,28 The court further enjoined the entry of
any confessed judgment against a member of the class absent a showing
that, at the time of execution of the cognovit instrument, the debtor
intentionally, knowingly and voluntarily waived his due process rights
to notice and hearing given up through the operation of the Pennsylvania cognovit statute. 27 The district court refused to find, on the facts
122. The Court notes that ".
.
. in exchange for that provision [cognovit].
.
.Over-
myer received benefit and consideration in the form of: (a) Frick's release of the three
mechanic's liens; (b) reduction in the amount of the monthly payment; (c)further time
in which the total amount was to be paid; and (d) reduction of a half point in the interest
rate." Id. at 183.
123. 405 U.S. 191 (1972).
124. See Swarb v. Lennox, 314 F. Supp. 1091, 1095 (E.D. Pa. 1970), aff'd 405 U.S.
191 (1972).
125. 314 F. Supp. at 1095.
126. Id. at 1099-100.
127. Id. at 1102-03. Compare Osmond v. Spence, 327 F. Supp. 1349 (D. Del. 1971),
where Delaware's confession of judgment procedure was held defective since it failed
to provide for notice and hearing preceding entry of judgment and there was no method
of judicially determining whether or not a particular debtor knowingly and intelligently
waived his rights on entry of judgment. Pennsylvania cognovit procedure is authorized
by PA. R. Civ. P. tit. 12, Rules 2950-76 (Purdon Supp. 1973-74); PA. STAT. ANN.,
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presented, that the Pennsylvania cognovit practices were unconstitutional as applied to individuals who earned more than $10,000 an12
nually.
The appeal to the Supreme Court addressed itself to two issues: (1)
whether ". . . the District Court erred in confirming the relief it granted
to certain members of the appellants' class;" and (2) whether "the court
should have discarded the Pennsylvania rules and statutes as unconstitutional on their face."'' 29 The Supreme Court affirmed the district court's
rulings on both issues. 30 Relying on its earlier decision in Overmyer,
and rejecting the appellants' contention that the cognovit procedures
were unconstitutional on their face, the Court said:
Today's decision in Overmyer, although it concerns a corporate and
not an individual debtor, is adverse to this contention of the plaintiffappellants. In Overmyer it is recognized that, under appropriate circumstances, a cognovit debtor may be held effectively and legally to have
waived those rights he would possess if the documents he signed had
contained no cognovit provisions.''
Adhering to the principles it set out in Overmyer, the Court adopted the
same standard of waiver it employed in the "corporate-property-right
cases" such as Overmyer to other situations involving consumerdefendants. Consequently, though a cognovit judgment entered against
a consumer-debtor may not be unconstitutional on its face,' it is
tit. 17, § 1482 (III) (Purdon 1962). Under Pennsylvania practice a confession ofjudgment 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. R. Civ. P. tit. 12,
Rule 2951(a) (Purdon Supp. 1973-74). Written notice is provided for but only after
judgment is entered. The failure to provide for notice does not affect the judgment lien
that was created at the time judgment was confessed. Id. at Rule 2958(a). Executions
on the cognovit judgment may ensue within 20 days from its entry irrespective whether
the post judgment notice was actually sent [by mail]. Id. at Rule 2958(b). The cognovit
practices of Pennsylvania have been severely criticized as harsh and drastic. See, e.g.,
25 N.Y.2d 219, 250 N.E.2d 474, 303 N.Y.S.2d 382; 374 Pa. at 4-5, 97 A.2d at 236.
128. 314 F. Supp. at 1098-99, aff'd 405 U.S. 191.
129. Swarb v. Lennox, 405 U.S. at 200.
130. Id.
131. Id.
132. Though the court affirmed the district court's holding that the cognovit procedure in Pennsylvania was not unconstitutional on its face, it did not review, nor express
approval of that part of the district court's holding which held that the Pennsylvania
system was unconstitutional as to Pennsylvania citizens who signed cognovit agreements
and whose income was less than $10,000 annually. "This affirmance. . . does not mean
that the District Court's opinion and judgment are approved as to their other aspects
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nevertheless invalid if there is no intentional, knowing and voluntary
waiver by the debtor of his due process rights to notice and a hearing
prior to the entry of a personal money judgment against him.
Though Overmyer and Swarb did not involve applications of the full
faith and credit clause, their importance in that regard is obvious. Since
it is the defendant's "consent" to jurisdiction and his "consent" to a
warrant of attorney to confess judgment against him without notice and
hearing which gives the rendering court jurisdiction, then there is no
valid jurisdiction in that court to render a personal money judgment if
there is an invalid consent.
The Supreme Court recognized that a. defendant's consent is tantamount to his waiver of certain constitutionally protected rights in
Overmyer and Swarb. Those rights, grounded in notions of due process,
are also jurisdictional issues. InternationalShoe Co. v. Washington"'
prohibits a state court from assuming personal jurisdiction over a nonresident defendant unless there are sufficient minimum contacts between
the forum and the defendant. To permit otherwise would offend traditional notions of justice and fair.play 3 1 and therefore, violate a defendant's due process rights. Consequently, a defendant, at least one who
is a nonresident of the state where judgment is rendered, has a constitutional right not to be subjected to the personal jurisdiction of that
forum in the absence of any valid "contact" with it. Since the only
"contact" that a non-resident cognovit defendant has with a rendering
forum is his consent to be sued there, whether such consent was validly
given is a jurisdictional fact. Similarly, a cognovit defendant, whether
he is a resident or a nonresident, has a constitutional right to notice of
proceedings against him and a hearing to present his defenses. These due
and details that are not before us." 405 U.S. at 201. The fact that the named defendants
and intervenors (finance companies) did not take a cross-appeal kept the court from
determining finally the substance of the district court's holding that the Pennsylvania
system was a denial of due process to the court-prescribed class. The absence of a cross-
appeal means that the appellate court cannot upset any portion of the lower court's
judgment not challenged by the appeal. See Morley Constr. Co. v. Maryland Cas. Co.,
300 U.S. 185, 191-92 (1937). Though the intervenor finance companies filed amici
curiae briefs in opposition to the plaintiffs' appeal, the majority in Swarb, felt that such
intervention was an insufficient substitute for a cross-appeal. 405 U.S. at 201. Note,
however, that Justice Douglas, dissenting in part, takes the contrary view that despite
the appellee's failure to oppose the judgment, the "finance companies intervened in the
District Court. We have been fully informed by them and by amici of many facets of
this controversy. We should therefore discuss the merits and reach all issues tendered."
Id. at 207 (Douglas, J., dissenting).
133. 326 U.S. 310 (1945). See also notes and text accompanying notes 73-80 supra.
134. International Shoe Co. v. Washington, 326 U.S. 310, 316 (1945).
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process rights are also concomitant elements of jurisdiction and therefore, any waiver of such rights constitutes a jurisdictional fact which
must be determined by the forum court before enforcement of a cognovit judgment is granted.
CONCLUSION
A forum court, faced with the question whether or not to give full
faith and credit to a cognovit judgment of a sister state, should first
determine whether the terms of the warrant of attorney were strictly
complied with by the plaintiff. Since it is only through compliance with
the terms of the cognovit that the rendering court acquires in personam
jurisdiction, noncompliance thereto ousts the court of jurisdiction, and
judgments entered by that court are not entitled to full faith and
credit.'
If the method followed by a plaintiff in confessing judgment against
a defendant comports with the terms of the cognovit agreement, and of
course with the pertinent state law,' then the forum court has the more
troublesome task of determining whether the cognovit defendant made
an "intentional relinquishment or abandonment"1 37 of his due process
rights. The test to be applied by the forum court is whether the cognovit
defendant intentionally, knowingly and voluntarily waived his right to
notice and hearing, his right to representation by counsel of his choosing, and his right not be sued in a jurisdiction which has insufficient
contacts with the controversy. While the burden of proof is on the
defendant to collaterally attack the judgment of another state by pleading and proving permissive defenses against the enforcement of such
judgments,3 8 a cognovit defendant should not have the burden of proving an invalid or ineffective waiver. Instead, the forum court should
impose on the plaintiff, the affirmative duty of proving an effective
waiver as a condition to establishing the jurisdiction of the rendering
135. See National Exch. Bank v. Wiley, 195 U.S. 257 (1904); Grover & Baker
Sewing Mach. Co. v. Radcliffe, 137 U.S. 287 (1899). See also notes and text accompanying notes 32-43 supra.
136. See Snydam v. Bank of Silver Spring, 233 F.2d 21 (D.C. Cir. 1956); South
Orange Trust Co. v. Barrett, 45 Del. 533, 76 A.2d 310 (Super. Ct. 1950). See also note
and text accompanying note 30 supra.
137. Johnson v. Zerbst, 304 U.S. 458, 464 (1938).
138. See, e.g., Irwin v. Rawling, 141 S.W.2d 223 (Mo. Ct. App. 1940), where the
court held that the burden was upon the defendant to plead and prove that the plaintiffs
were not the "holders" of the note upon which judgment was confessed. See also
Monarch Refrigerating Co. v. Farmers' Peanut Co., 74 F.2d 790 (4th Cir.), cert. denied,
295 U.S. 732 (1935); O'Connell v. Smith, 131 S.W.2d 730 (Mo. Ct. App. 1939).
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court. 3 1In meeting his burden of proof on the waiver issue, the plaintiff
must overcome a strong, judicially developed presumption that exists
against the waiver of constitutional rights in civil actions.1 0
In determining whether the cognovit debtor validly waived his due
process rights, the forum court should differentiate between situations
where the cognovit defendant is a consumer-debtor from those where
defendant is a corporate or commercial entity. The consumer-debtor,
unlike his corporate counterpart,"' is generally not in a position of
strength when dealing with a creditor, nor does he ordinarily possess
sufficient knowledge and understanding of the law to appreciate the
consequences of a waiver of such fundamental rights as notice, hearing,
and personal submission to the jurisdiction of another state.4 2 In determining whether a consumer cognovit defendant's waiver was intentionally and knowingly given, the forum court should look beyond his mere
signature on the instrument containing the cognovit.'1 3 It should con139. This requirement is evident in the recently amended Delaware statute governing
entry of judgment by confession. See DEL. CODE ANN. tit. 10, § 2306 (Supp. 1972). See
also DEL. SUPER. CT. R. 58B(b)(4)(II) (Supp. 1972).
140. See Aetna Ins. Co. v. Kennedy, 301 U.S. 389, 393 (1937); Ohio Bell Tel. Co. v.
Public Util. Comm'n, 301 U.S. 292, 307 (1937) ("We do not presume acquiescence in
the loss of fundamental rights."). See also Brookhart v. Janis, 384 U.S. 1, 4 (1966);
Classer v. United States, 315 U.S. 60, 70-71 (1942). Before a waiver of a constitutional
right can be effective in the face of the presumption, it must clearly be established that
there was "an intentional relinquishment or abandonment of a known right or privilege." Johnson v. Zerbst, 304 U.S. 458, 464 (1938).
141. In the commercial situation, a waiver of notice may not be as suspect when
compared to the ordinary consumer situation, since businesses and corporations are
generally able to bargain on an equal footing and have a more sophisticated knowledge
of the cognovit practices and their results. Very often businesses and corporate debtors
transact their business through or in conjunction with retained counsel. See, e.g., Overmyer v. Frick, 405 U.S. 174 (1972). Corbin suggests that the statutory rights of commercial debtors are more readily waived that those given consumer debtors. VI. A. CORBIN,
ON CONTRACTS 983 (1950).
142. See Abolition of the Confession of Judgment Note in Retail Installment Sales
Contracts in Pennsylvania, 73 DICK. L. REV. 115, 116-18 (1968); Shuckman,
Consumer Credit by Adhesion Contracts, 35 TEMPLE L.Q. 125, 134 (1962). See also
Cutler Corp. v. Latshaw, 374 Pa. 1, 4, 97 A.2d 234, 238 (1953).
143. See, e.g., Frantz Tractor Co. v. Wyoming Valley Nursery, 384 Pa. 213, 120
A.2d 303 (1956), where the court invalidated a judgment entered upon a warrant of
attorney contained in an equipment lease despite the appearance of the lessee's signature
on the lease. In looking behind the signature, the court noted that the lessee's signature
"must bear such direct relation to the provision authorizing the warrant as to leave no
doubt that the lessee signed, conscious of the fact that he was thereby conferring upon
the lessor a warrant to confess judgment against him." Id. at 216, 120 A.2d at 305. Cf.
Railroad Co. v. Manufacturing Co., 83 U.S. (16 Wall.) 318, 329 (1872).
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THE AMERICAN UNIVERSITY LA W REVIEW
[Vol. 22
sider such factors as the age, education and financial status of the
consumer-debtor,"' the presence or absence of any warnings in the cognovit instrument and the placement and visibility of the cognovit clause
in the instrument. 45
In addition, the forum court should consider the commercial setting,"
within which the cognovit agreement was executed when determining
voluntariness of the waiver. If the forum court determines that the
cognovit agreement was essentially the result of a "coercive" or "adhe-
sive" commercial environment, then any nominal consent obtained
from the cognovit defendant is destroyed and the forum court must
refuse credit to sister state cognovit judgments entered under the authority of such consent.
RICHARD
A. ZAPPA
144. See, e.g., Swarb v. Lennox, 314 F. Supp. 1091, 1097 (1971), aff'd 405 U.S. 191
(1972), where the district court considered the following evidence in support of plaintiffs'
contention that the ordinary consumer neither understood nor appreciated the consequences flowing from cognovit waivers: (1) the testimony of a detective with the Consumers Fraud Division of the District Attorney's office that 95% of the notes brought
to him by those complaining of fraud contained cognovits which were not understood
by the persons signing the notes ("upon explaining the meaning of the judgment clause,
in almost every case, the debtor expressed disbelief and shock at both the existence of
the clause and its legal meaning." Id.); (2) a study which included a survey of debtors
in default in Philadelphia, as well as three other cities, which revealed that the great
majority of the consumer debtors had limited education (only 30% were high school
graduates), semi-skilled or unskilled occupations and limited financial resources (56%
of the debors had incomes below $6,000 yearly; only 4% had incomes over $10,000); and
(3) other evidence which showed of 245 Philadelphia debtors, most did not know
whether or not the note contained a cognovit clause and 22% of them believed that there
was no such clause in the contract they signed.
145. See, e.g., OHio REV. CODE § 2323.13 (Page Supp. 1972), which requires that
any document which contains a cognovit clause must also include a warning "directly
above or below the signature of each maker. . . in such type size or distinctive marking
that it appears more clearly and conspicuously than anything else on the document:
WARNING-By signing this paper you give up your right to notice and court
trial. If you do not pay on time a court judgment may be taken against you
without your prior knowledge and the powers of a court can be used to collect
from you or your employer regardless of any claims you may have against the
creditor whether for returned goods, faulty goods, failure on his part to comply
with the agreement, or any other cause."
Id. See also Douglas v. Beneficial Fin. Co., 334 F. Supp. 1166 (D. Alas. 1971); note
and text accompanying note 100 supra. Expressing a similar concern for the unwary
consumer, the U.C.C. has required that disclaimers of implied warranties of merchantability be conspicuously placed in a contract for the sale of goods. U.C.C. § 2-316(2).
146. See In re Elkins-Dell Mfg. Co., Inc., 255 F. Supp. 864 (E.D. Pa. 1964). See also
note and text accompanying note 100 supra. Compare U.C.C. § 2-302(2).