holding that a debtor had "voluntarily, intelligently, and knowingly No. 16AP-18 8 waived the rights it otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the legal consequences" when signing a cognovit note, and such instruments are "not, per se, violative of Fourteenth Amendment due process"
How later courts described this case
- holding that a debtor had "voluntarily, intelligently, and knowingly No. 16AP-18 8 waived the rights it otherwise possessed to prejudgment notice and hearing, and that it did so with full awareness of the legal consequences" when signing a cognovit note, and such instruments are "not, per se, violative of Fourteenth Amendment due process"
- holding that where there is no unequal bargaining power or overreaching, debtors can voluntarily, intelligently, and knowingly waive due process rights by signing a cognovit note, which is an agreement by which a debtor consents in advance to a holder’s obtaining a judgment without notice or hearing
- holding that contract with provision permitting injured party to obtain judgment against defaulting party without notice or hearing does not offend Due Process Clause
- holding that a cognovit clause which provided for judgment without notice or hearing was not unconstitutional per se, because due process rights are subject to waiver
Written by the judges who cited it.
The opinion
Mr. Justice Douglas,
whom Mr. Justice Marshall joins, concurring.
I agree that the heavy burden against the waiver of constitutional rights, which applies even in civil matters, Ohio Bell Tel. Co. v. Public Utilities Comm’n, 301 U. S. 292, 307 (1937); Aetna Ins. Co. v. Kennedy, 301 U. S. *189 389, 393 (1937), has been effectively rebutted by the evidence presented in this record. Whatever procedural hardship the Ohio confession-of-judgment scheme worked upon the petitioners was voluntarily and understandingly self-inflicted through the arm’s-length bargaining of these corporate parties.
I add a word concerning the contention that opening of confessed judgments in Ohio is merely discretionary and requires a higher burden of persuasion than is ordinarily imposed upon defendants. As I read the Ohio law of cognovit notes, trial judges have traditionally enjoyed wide discretion in vacating confessed judgments. 32 Ohio Jur. 2d, Judgments § 558 (1958). In Livingstone v. Rebman, 169 Ohio St. 109 , 158 N. E. 2d 366 (1959), however, the Ohio Supreme Court imposed certain safeguards on the exercise of a judge’s discretion in opening confessed judgments. That case also involved a petition to open a confessed judgment where, as here, the debtor alleged the affirmative defense of failure of consideration. Using the preponderance-of-the-evidence test, the trial court had found insufficient support for the debtor’s claim and had dismissed the motion to open. On appeal, however, the Ohio Supreme Court reversed on the degree of proof needed to vacate a confessed judgment. Said the court:
“[I]f there is credible evidence supporting the defense . . . from which reasonable minds may reach different conclusions, it is then the duty of the court to suspend the judgment and permit the issue raised by the pleadings to be tried by a jury or, if a jury is waived, by the court.” Id., at 121-122 , 158 N. E. 2d, at 375. (Emphasis supplied.)
Thus it would appear that the Ohio confessed judgment may be opened if the debtor poses a jury question, that *190 is, if his evidence would have been sufficient to prevent a directed verdict against him. That standard is a minimal obstacle. *
The fact that a trial judge is dutybound to vacate judgments obtained through cognovit clauses where debtors present jury questions is a complete answer to the contention that unbridled discretion governs the disposition of petitions to vacate. See also Goodyear v. Stone, 169 Ohio St. 124 , 158 N. E. 2d 376 (1959); McMillen v. Willard Garage Inc., 14 Ohio App. 2d 112, 115 , 237 N. E. 2d 155, 158 (1968); Central National Bank of Cleveland v. Standard Loan & Finance, 5 Ohio App. 2d 101, 104 , 195 N. E. 2d 597, 600 (1964).
The record shows that the petitioners were given every opportunity after judgment to explain their affirmative defense to the state courts and that the defense was rejected solely because the evidence adduced in support thereof was too thin to warrant further presentation to a jury.
Thus the Ohio system places no undue burden of proof upon the debtor desiring to open a confessed judgment, in marked contrast to the Pennsylvania procedure involved in Swarb v. Lennox, post, p. 191. In Pennsylvania, in order to vacate such a judgment, a borrower must prove his defense by the preponderance of the evidence rather than by merely mustering enough evidence to present a jury question. Once the judgment is vacated, moreover, he must again prevail by that standard at a subsequent trial. In effect, the Pennsylvania confessed debtor is required to win two consecutive trials, not simply one. Given the proclivities of reasonable men to differ over the probative value of jury questions, the Pennsylvania requirement of twice sustaining the preponderance of the evidence imposes a stiffer burden of persuasion.