Swarb v. Lennox

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

Held:


 * 1. The Pennsylvania rules and statutes relating to cognovit provisions are not unconstitutional on its face, as under appropriate circumstances, a cognovit debtor may be held effectively and legally to have waived the rights he would possess if the document he signed had contained no cognovit provision. D.H. Overmyer Co. v. Frick Co., ante, p. 174. P. 200.


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

314 F. Supp. 1091, affirmed.

BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J., and BRENNAN, STEWART, WHITE, and MARSHALL, JJ., joined. WHITE, J., filed a concurring opinion, post, p. 202. DOUGLAS, J., filed an opinion dissenting in part, post, p. 203. POWELL and REHNQUIST, JJ., took no part in the consideration or decision of the case.

David A. Scholl argued the cause for appellants pro hac vice. With him on the briefs was Harvey N. Schmidt.

Philip C. Patterson argued the cause for appellees. With him on the brief for appellees Middle Atlantic Finance Assn. et al. was ''Marvin Comisky. J. Shane Creamer, Attorney General, and Barry A. Roth'', Assistant Deputy Attorney General, filed a brief for appellee the Commonwealth of Pennsylvania.

William L. Matz argued the cause for the Pennsylvania Savings & Loan League as amicus curiae urging affirmance. With him on the brief was Herbert Bass.

Briefs of amici curiae urging reversal were filed by Don B. Kates, Jr., Martin R. Glick, and Carol Ruth Silver for California Rural Legal Assistance et al.; by John J. Brennan and Gordon W. Gerber for the Pennsylvania Bankers Assn.; by David M. Jones for the Pennsylvania Credit Union League; and by Edward Donald Foster and Blair C. Shick for the National Consumer Law Center.

Briefs of amici curiae urging affirmance were filed by Matthew Hale for the American Bankers Assn., and by Gilbert Nurick and Moses K. Rosenberg for the Pennsylvania Land Title Assn.