Confession Of Judgment
Confession Of Judgment is an extraordinary remedy that is not customarily used in lending transactions unless the lender feels it is not adequately protected by its collateral or fears a default. A confession of judgment allows the lender to obtain a judgment on the debt simply by submitting the confession of judgment to the court clerk. The clerk then enters judgment in favor of the lender, typically without notice to the judgment debtor.
Many confessions of judgement literally state that the creditor can appoint an attorney for the debtor, to appear in court for him and then confess judgement against him (i.e., the attorney's own client). Rarely do any such provisions provide for disclosure to the debtor of the conflict of interest and waiver of such conflict of interest. The lender should consider that, upon the debtor's default, it will be hard to find a reputable attorney who will agree to betray the attorney's own client, and, without the client's consent, have judgment entered against him[1].
Confession of judgment in pending action
Confession of judgment in pending action:
- on the confession of the defendant, with assent of the plaintiff or his attorney, judgment may be given against the defendant in any action, before or after answer, for any amount or relief not exceeding or different from that demanded in the complaint
- when the action is against a public corporation or a private corporation, the confession shall be made by the person who at the time sustains the relation to such corporation as would authorize the service of a summons upon him
- when the action is upon a contract, and against one or more defendants jointly liable, judgment may be given on the confession of one or more defendants against all the defendants thus jointly liable, whether such defendants have been served with the summons, or not, to be enforced only against their joint property and against the joint and separate property of the defendant making the confession
- the confession and assent thereto shall be in writing, and subscribed by the parties or their attorneys making the same, and acknowledged by each before an officer authorized to take acknowledgments of deeds, but the acknowledgment is not required if the parties or their attorney appear in court when the judgment is given
In all cases the confession and assent thereto and the acknowledgment, if any, shall be filed with the clerk[2].
Confessions of Judgment - Cognovit Notes
Confessions of judgment refers to a judgment taken by warrant of attorney included in the instrument creating the obligation and consenting to judgment before the commencement of suit. In effect, the debtor allows an attorney chosen by the creditor to appear in a court of proper jurisdiction and enter judgment at any time against the debtor without notifying or serving process on the obligor - debtor and usually prior to any default. When confession is allowed at any time after execution of the contract, the creditor is immediately permitted to acquire a judgment lien on any property of the debtor, real or personal.
At common law, judgment by confession was permitted in a pending suit and still seems to be permitted and regulated. In such cases, unlike the confession note, the suit has already been commenced, and the defendant has already received service of process before execution of the confession[3].
Footnotes
| Confession Of Judgment — recommended articles |
| Vesting order — Deed of Release — Mortgage deed — Limited warranty deed — Satisfaction of mortgage — Absolute assignment — Clear title — Certificate of satisfaction — Limited power of attorney |
References
- Boyd B., (2019), Real Estate Financing, Law Journal Press, New York.
- Morse W., Kennedy R.F., (1992),Consumer Credit in the United States , U.S. Government Printing Office, Washington.
- Virgin Islands Code, (2010), U.S. Government Printing Office, Washington.
Author: Daria Polewka
