Abstract
Creditors have more than a dozen prejudgment, no-notice remedies which permit them to seize or encumber a debtor's property even before the creditor has sued the debtor and recovered a judgment. Moreover, a creditor may take a debtor's property without giving the debtor prior notice and the opportunity to oppose the taking in a judicial proceeding. These extraordinary remedies have been employed in England and the United States for centuries and in the 1920s the Supreme Court affirmed their constitutionality. However, in a set of decisions beginning in with Sniadach v. Family Finance Corp. in 1969 and Fuentes v. Shevin in 1972, the Supreme Court laid down the broad principle that, except in extraordinary circumstances, no private citizen could use the courts to summarily seize another person's property. Now, however, the Supreme Court is retreating from these decisions, signalled by its actions in three cases decided in May 1974 which, respectively, rehabilitated replevin, upheld the constitutionality of mechanics' and materialmen's liens, and held that cognovits were valid. The author surveys current Supreme Court jurisprudence on creditors' remedies, analyzing the constitutionality of: I. Liens which do not disturb possession, II. Judicial remedies of secured creditors, III. Judicial remedies of unsecured creditors, and IV. Self-help remedies. The author argues that it was a mistake for the Supreme Court to invalidate various no-notice creditors' remedies on due process grounds because the vindication of abstract and subjective notions of procedural due process is not the business of the courts. The author concludes that the present Court is more likely to defer to the judgment of the peoples' legislators and, as such, creditors' remedies which inflict no injustice on debtors in general or upon a particular debtor in a given case will pass constitutional muster despite the absence of prior notice and the opportunity for a hearing.
Recommended Citation
Earl Phillips,
Revolution and Counterrevolution: The Supreme Court on Creditors Remedies,
3 Fordham Urb. L.J. 1
(1974).
Available at: https://ir.lawnet.fordham.edu/ulj/vol3/iss1/1