PNB v. Manila Oil Refining & Byproducts Co.

(1922)

Facts: The manager and treasurer of MORBC executed and delivered to PNB a
promissory note which contained a provision authorizing any attorney to appear in the
maker’s name and confess judgment for the principal amount plus interest, in case the
note is not paid upon maturity. A case for collection of the said sum was filed and Atty.
Recto appeared in behalf of MORBC and filed a motion confessing judgment, to which
MORBC objected.
Held: Sec 5 of the NIL merely provides that, in jurisdictions where judgment notes are
recognized, such clauses shall not affect the negotiable character of the instrument. In
our jurisdiction, such warrants of attorney are void as against public policy, because
they enlarge the field for fraud, because under these instruments the promissor
bargains away his right to a day in court, and because the effect of the instrument is to
strike down the right of appeal accorded by statute. Provisions in notes authorizing
attorneys to appear and confess judgments against makers should not be recognized in
this jurisdiction by implication and should only be considered as valid when given
express legislative sanction.