The opinion of the court was delivered by: WEBER
Plaintiff's cause of action under the Truth in Lending Act against Defendant Credit Union was severed and separately determined, with the Plaintiff being granted relief under that Act. There remains for our consideration Plaintiff's cause of action against the Credit Union, the Sheriff, and the Prothonotary based on allegations of the unconstitutionality of the Pennsylvania Statutes and Rules of Civil Procedure, or their application in an unconstitutional way, with respect to the entry of judgment by confession, and execution upon said judgments entered by confession. With respect to this cause of action plaintiff asks declaratory and injunctive relief, the convening of a statutory three judge court, and the prosecution of this action as a class action.
We declined to enter a preliminary injunction in this case because of the absence of irreparable harm and the availability of other legal remedies. No execution on the confessed judgment was being prosecuted. The Prothonotary and the Sheriff filed Motions to Dismiss. The Sheriff averred that the pleadings do not allege, and in that fact there is no writ of execution pending in his office affecting the Plaintiff, Naomi Chittester. The Prothonotary's Motion recites that judgments by confession are entered in his office, but that no writ of execution has been, will be, or would have been issued against the plaintiff or any person sought to be included as a member of her class under the facts alleged in Plaintiff's complaint.
The Pennsylvania statutes and rules on entry of judgment by confession are not on their face unconstitutional, Swarb v. Lennox, 405 U.S. 191, 92 S. Ct. 767, 31 L. Ed. 2d 138 (1972). While their application in an unconstitutional manner would give rise to a cause of action, the Plaintiff only avers that said statutes and rules are unconstitutional on their face as applied to herself and a class composed of all persons who have signed confession of judgment clauses in notes or contracts of any description. She also proposes a defendant class composed of all types of persons, partnerships, corporations, associations, banks, credit unions, and the like, which require persons to sign documents containing confessions of judgment clauses.
The decision of the Supreme Court in Swarb v. Lennox must be read together with its companion case of Overmyer v. Frick, 405 U.S. 174, 92 S. Ct. 775, 31 L. Ed. 2d 124 (1972), decided the same day. The procedural aspect in which Swarb v. Lennox was brought before the Court dictated its result, to the extent that the Court warned against its use as precedent:
". . . the impact and effect of Overmyer upon the Pennsylvania system are not to be delineated on the one-sided appeal in this case and we make no attempt to do so."
405 U.S. at p. 202, 92 S. Ct. at p. 773.
Because Plaintiff avers no present action to deprive her of property without due process of law, there being no such action pending or contemplated by any defendant, and because the public officers named as Defendants have responded that no action would be taken by them in execution of the judgment on the facts pleaded by the Plaintiff, we find no actual or threatened deprivation of due process solely from the entry of judgment in this case. Such judgments are subject to being stricken or opened to allow a defense on the merits under Pennsylvania procedure, and the onerous burden of proof under the former practice in Pennsylvania, as noted by the District Court in Swarb v. Lennox, 314 F. Supp. 1091, 1094-1095, and commented upon by the Supreme Court, as noted further herein, has been changed by the 1973 amendment to the Pennsylvania Procedural Rules.
We gather from the district court opinion in Swarb v. Lennox that the precipitating event which brought the plaintiffs into that court for relief was the issuance of writs of execution delivered to the Sheriff.
The parallel case to Swarb v. Lennox brought in this district court has been Mallon v. Coon, Sheriff, et al., Civil Action No. 70-503, which was also generated by a levy of execution by the Sheriff. The preliminary injunction which followed restrains the Sheriffs of Allegheny, Beaver, Washington and Westmoreland Counties in this District from execution against real or personal property on judgments entered by confession. The order contains certain classes of transactions not covered, and other exceptions are allowed after notice and opportunity to be heard.
In our numerous hearings on applications for relief by many parties in the Mallon case we learned that most debtors are aware of the practical effect of their signatures to instruments containing confessions of judgments, although some shared with their counsel a rather hazy notion of the procedural aspects of the process.
The Caplovitz study, which the District Court in Swarb admitted into evidence by stipulation, covered 245 judgment note debtors in Philadelphia, 96% of whom had incomes under $10,000, only 30% of whom were high school graduates, and 14% of whom were reported as saying that they did not know the instrument which they signed contained a confession of judgment. We cannot find, from the District Court's opinion, what percent of the Caplovitz debtors understood the meaning of a confession of judgment. In any event, it was shown in Swarb that the Prothonotary of Philadelphia County recorded 52,601 judgments by confession in 1968.