Confession of Judgment
Confession of Judgment
Confession of Judgment
PNB v Manila Oil Refining and By-Products Co. Inc. (43 Phil 444) – Section 5(b) of the
Negotiable Instrument Law providing that the negotiable character of an instrument otherwise
negotiable is not affected by a provision which authorizes a confession of judgment if the
instrument cannot be paid at maturity, cannot be taken to sanction judgments by confession
because it is a portion of a uniform law which merely provides that, in jurisdictions were judgment
notes are recognized, such clauses shall not affect the negotiable character of the instrument.
Moreover, the same section of the Negotiable Instruments Law concludes with these words: “But
nothing in this section shall validate any provision or stipulation otherwise illegal.”
The judgment note was held to be void as against public policy, because they enlarge the field of
fraud, because under these instruments the promissory bargains away his right to a day in court,
and because of the effect of the instrument is to strike down the right of appeal accorded by statute.
The Court was of the opinion that warrants of attorney to confess judgment are not authorized nor
contemplated by our law. We are further of the opinion that provisions in notes authorizing
attorneys to appear and confess judgments against makes should not be recognized in this
jurisdiction by implication and should only be considered as valid when given express legislative
sanction.
This is void as against public policy as it denies a person his day I court.