Delia Gonzalez appeals from the dismissal of an action brought on behalf of herself and three infant children in which she sought injunctive relief and damages based on a claim that appellees deprived her of the constitutional right to due process of law. In her complaint Mrs. Gonzalez alleged that she was denied due process when defendant-appel-lee landlord, the Housing Authority of Hidalgo County, Texas, (“the housing authority”), seized without notice or hearing, for nonpayment of rent, all her belongings from the - dwelling she was renting. The district court for the Southern District of Texas held that Mrs. Gonzalez had not been denied her constitutional rights and dismissed the complaint. We reverse and remand the case to the district court for the reasons discussed below.
We emphasize at the outset and throughout the opinion that we are not dealing with the validity of such clauses in private contracts between private parties. Rather we deal with admitted state action — the form of a contract executed by an arm of the State of Texas.
The facts, briefly summarized, are these. Plaintiff-appellant Delia Gonzalez, twenty years old and the mother of three at the time she commenced this action, was made a party to a lease contract in June of 1970 when her husband, Baldemar Gonzalez, a Mexican migrant farm laborer, executed a lease for housing in the Weslaco Labor Camp, a labor camp for migrant workers operated by appellee housing authority pursuant to Vernon’s Ann. Texas Revised Civil Statutes Article 1269k § 23a. 1 The tenth clause of the form lease signed by Gonzalez provided as follows:
The tenant further agrees that the landlord shall have a lien for the payment of rent and all other obligations arising under this lease, upon all goods, chattels, fixtures and personal property of the tenant, which are or may be put on the leased premises, and on default of payment of any such obligations by the tenant, the landlord is hereby authorized to enter upon the premises and remove all and sell said goods, chattels, fixtures and personal property either at a public or private sale, without notice, and to apply the proceeds of such sale to the expense of foreclosure of this lien and the said unpaid obligations of the occupant, the balance, if any, of such proceeds, is to be paid to the tenant, [emphasis added]
*1045 Appellant and her husband and children lived at the Weslaco Labor Camp until October of 1970, at which time they locked up their apartment and migrated north to search for farm work, leaving behind certain items of furniture, household goods, and clothing. 2 Neither appellant nor her husband informed the housing authority that they were leaving, or for how long. When they left, they owed rent for the month of October. The husband returned in December to pay the October rent, then went back up north to continue working. In January of 1971 appellant and her three children were abandoned by the husband in Illinois. In February she returned to the Weslaco Labor Camp to find that the housing authority had entered her premises and, pursuant to Clause 10 of the lease, had removed all her belongings for the non-payment of rent. In April she requested that her property be returned; she was informed that she would have to pay all the rent owing before the property would be returned. In May she was able to pay $20 of the amount owing. She still owes $105. On September 8, 1971, she instituted suit to recover her property, at which occurrence the housing authority returned certain of her belongings. Federal court jurisdiction was based on 42 U.S.C. § 1983 and 28 U.S.C. § 1331.
On January 3, 1972, by Memorandum Opinion, the district court denied all relief and dismissed the action, holding that the contract was valid under Texas law and exempt from the restrictive provisions of the Texas Landlord Lien Law, Vernon’s Ann.Texas Revised Civil Statutes Article 5238a, 3 and that the sum *1046 mary seizure of appellant’s property and its detention did not deprive Mrs. Gonzalez of her constitutional right to due process since her husband, by virtue of Clause 10 of the lease, had “knowingly waived by contract any pre-seizure notice.” In so ruling the court stated:
Judicial notice has been taken that form leases are put before tenants on an “accept this or get nothing” basis, and that needy tenants are compelled to sign without any real freedom of contract [citation omitted]. However, there is evidence before the Court that the terms and provisions of this contract were explained to Baldemar Gonzalez, prior to his signing on behalf of himself and Plaintiff.
Baldemar Gonzalez did not testify at the proceeding below. The district court did not specify what evidence was adduced by appellee housing authority to establish that Baldemar Gonzalez, apparently uneducated and speaking little English, had understood that he was waiving his and appellant’s constitutional rights to notice and hearing prior to seizure of their property. The narrow issue on appeal is whether the district court erred in ruling that, on the facts presented, appellant’s husband had validly waived the right to notice and hearing. Since we are of the opinion that the record is devoid of substantial proof that Gonzalez “voluntarily, intelligently and knowingly” waived a constitutionally protected right, Fuentes v. Shevin,
The Supreme Court in Fuentes v. Shevin,
supra,
and in numerous other cases,
5
has clearly indicated that a heavy burden must be borne by the party claiming that a “voluntary, intelligent, and knowing” contractual waiver has occurred. In ruling that no
contractual
waiver had taken place in
Fuentes
upon appellant’s execution of a printed form conditional sales contract, the Court,
The purported waiver provision was a printed part of a form sales contract and a necessary condition of the sale. The appellees made no showing whatever that the appellants were actually aware or made aware of the significance of the fine print now relied upon as a waiver of constitutional rights. * * * [Quoting from D. H. Overmyer Co., Inc. v. Frick Co., supra, the Court continued,] “where the *1047 contract is one of adhesion, where there is great disparity in bargaining power, and where the debtor receives nothing for the [waiver] provision, other legal consequences may ensue [i. e., no valid waiver will have occurred]
Precisely because, on this record, we are not satisfied that Baldemar Gonzalez was “actually aware or made aware of the significance of the fine print now relied on as a waiver of constitutional rights,” we remand the case to the district court under the authority, and in the light, of the Supreme Court’s decisions in Fuentes, Overmyer, and Swarb v. Lennox,
It has been argued that in both
Fuentes, supra,
and Sniadach v. Family Finance Corp.,
In
Fuentes
one of the appellants,
7
Mrs. Fuentes, who spoke little or no English,
8
had signed two conditional sales contracts for the purchase of a gas stove and stereophonic phonograph set. Under the contracts, the Seller retained title to the items, but Mrs. Fuentes was entitled to possession “unless and until she should default on her installment payments,”
The Supreme Court, per Mr. Justice Stewart, reversed, summarizing its holding in the following language: “We hold that the Florida and Pennsylvania prejudgment replevin provisions work a deprivation of property without due process of law insofar as they deny the right to a prior opportunity to be heard before chattels are taken from their pos
*1048
sessor.”
It would appear that creditors could withstand attack under today’s opinion simply by making clear in the controlling credit instruments that they may retake possession without a hearing or, for that matter, without resort to judicial process at all.407 U.S. at 102 ,92 S.Ct. at 2005 .
Justice White’s observation, however, must be viewed with reference to Supreme Court majority pronouncements in several recent decisions of the Court; i. e., the majority opinion in Fuentes itself, and the Court’s decisions in D. H. Overmyer Co., Inc. v. Frick Co., supra, and Swarb v. Lennox, supra.
The majority in
Fuentes
addressed the “waiver by contract” argument presented by the Seller in that case. The conditional sales contracts there provided that upon default the Seller “may take back,” “may retake,” or “may repossess” the merchandise. Although the Court concluded that this contractual language “does not, on its face, even amount to a waiver,”
Finally, we must consider the contention that the appellants who signed conditional sales contracts thereby waived their basic procedural due process rights. The contract signed by Mrs. Fuentes provided that “in the event of default of any payment or payments, Seller at its option may take back the merchandise. . . .”
* * * These terms were parts of printed form contracts, appearing in relatively small type and unaccompanied by any explanations clarifying their meaning.
In D. H. Overmyer Co. v. Frick Co., * * * the Court recently outlined the considerations relevant to determination of a contractual waiver of due process rights. Applying the standards governing waiver of constitutional rights in a criminal proceeding- — although not holding that such standards must necessarily apply — the Court held that, on the particular facts of that case, the contractual waiver of due process rights was “voluntarily, intelligently, and knowingly” made. The contract in Overmyer was negotiated between two corporations; the waiver provision was specifically bargained for and drafted by their lawyers in the process of these negotiations. As the Court noted, it was “not a case of unequal bargaining power or overreaching. The Over-myer-Frick agreement, from the start, was not a contract of adhesion.” Both parties were “aware of the significance” of the waiver provision.
The facts of the present cases are a far cry from those of Overmyer. There was no bargaining over contractual terms between the parties who, in any event, were far from equal in bargaining power. The purported waiver provision was a printed part of a form sales contract and a necessary condition of the sale. The appellees made no showing whatever that the appellants were actually aware or made aware of the significance of the fine print now relied upon as a waiver of constitutional rights.
The Court in Overmyer observed that “where the contract is one of adhesion, where there is great disparity in bargaining power, and where the debtor receives nothing for the [waiver] provision, other legal consequences may ensue.” (citations and footnote omitted)407 U.S. at 94-95 ,92 S.Ct. at 2001 .
The majority concluded that the contract language purporting to waive Mrs. Fuentes’ constitutional right to due process had not in fact waived that right.
It is significant to note in
Overmyer
that, even though the Court affirmed
*1049
the lower court’s finding of a contractual waiver, the Court emphasized the equality existing between the contracting parties (two corporations). The Court stated: “Our holding, of course, is not controlling precedent for other facts of other cases. For example, where the contract is one of adhesion, [and] where there is great disparity in bargaining power, * * * other legal consequences may ensue.”
In Swarb v. Lennox, supra, the companion case to Overmyer, the Court affirmed a three-judge district court decision which had held, inter alia, that confession of judgment clauses in consumer credit contracts did not constitute a waiver .of the right to notice and hearing as to those debtors with incomes under $10,000 who were relatively uneducated. We deem it significant that the Supreme Court approved the three-judge panel’s ruling that, since individuals in a class comprised of relatively poor and uneducated persons had been made to execute confessed judgments purporting to waive constitutionally protected rights, the contracts did not validly waive those rights since those persons had not knowingly and intelligently consented to waiver. The lower court drew important distinctions among members of the class who had signed such contracts. The lower court noted that where the debtor is an attorney, all that may be necessary to establish his understanding of a waiver provision is an affidavit of his profession; if the debtor is a non-high school graduate, however, far greater proof is needed:
Since the procedure used for entry of confessed judgments on the above-mentioned notes is based on the concept of a waiver of notice without adequate understanding by the debtor, it violates the due process clause of the Fourteenth Amendment. It is not our function to dictate to a state exactly what constitutes understanding waiver of notice in each particular case and what proof of such notice would comply with the above-mentioned decisions. Where the debtor is an attorney, all that may be necessary to prove that he understood the meaning and consequences of such a clause in a consumer financing note is an affidavit of such debtor’s profession. On the other hand, more proof may be required of non-high school graduates since the phraseology of the clauses in the notes offered in evidence is most difficult for laymen to understand. 9
* -X- -X- * * *
After a careful examination of the record, we find that there was no intentional waiver of a known right by members of the above class in executing the confession of judgment clauses. The evidence indicates that the debtors did not fully understand the rights which they were relinquishing by signing these notes, that is, the right to have notice and an opportunity to be heard prior to judgment -X- -X- -X- 10
Again adverting to the chronology of events in the case before us, on November 2, 1972 (ten months after the district court’s decision was handed down), this Court in Hall v. Garson,
On the authority of Fuentes we hold that Tex.Rev.Stat.Ann. Art. 5238a works a “deprivation of property without due process of law insofar as [it denies] the right to a prior opportunity to be heard before chattels are taken from their possessor.”468 F. 2d at 847 .
Noting that a landlord’s seizure action pursuant to authority granted by Article 5238a “makes his actions those of the State,”
It is true that the lien in the ease before us was created by contract, as was the authority to enter and remove, and that neither was dependent upon any statute. And since the actions taken by appellees were entirely consistent with the terms of the rental agreement, this, it is argued, requires affirmance of the lower court’s decision. That result would logically follow, were it not for the fact that this Court in Hall v. Gar-son,
supra,
and the Supreme Court in
Fuentes, Overmyer,
and Swarb v. Len-nox,
supra,
have spoken so strongly in terms of the notice required prior to a prejudgment taking of property (“[appellant's] possessory interest in the goods, dearly bought and protected by contract, was sufficient to invoke the protection of the Due Process Clause”,
The district court recognized that the lease executed by Baldemar Gonzalez was a contract of adhesion. The Court took judicial notice of the fact that form leases are offered to tenants on an “accept this or get nothing basis” and that needy tenants such as migrant farm laborer Gonzalez are compelled to sign without any real freedom of contract.
See
Santiago v. McElroy,
The district court also found that extraordinary circumstances existed which justified the summary seizure provision in the lease signed by Gonzalez. We do not find in this case any basis for placing the facts presented with
*1051
in the “extraordinary situation” category which, the Supreme Court has ruled, may justify a peremptory seizure of property without prior notice. The Supreme Court decisions make quite clear that an “extraordinary situation” justifying summary seizure must be “truly unusual,” that such a seizure must be “directly necessary to secure an important governmental or general public interest,” and that there must be a “special need for very prompt action.”
Fuentes, supra,,
Even if it be assumed, as appellees argued, that summary seizure helps conserve the housing authority’s financial and administrative resources, essential to the provision of low-cost housing, such financial considerations do not give rise to an “extraordinary situation” justifying the denial of constitutional rights. The Supreme Court in Fuentes expressly rejected such financial concerns when constitutional rights are at stake:
A prior hearing always imposes some costs in time, effort, and expense, and it is often more efficient to dispense with the opportunity for such a hearing. But these rather ordinary costs cannot outweigh the constitutional right, [citations omitted] Procedural due process is not intended to promote efficiency or accommodate all possible interests: it is intended to protect the particular interests of the person whose possessions are about to be taken. [Quoting from Stanley v. Illinois,405 U.S. 645 , 656 [,92 S.Ct. 1208 ,31 L.Ed.2d 551 ] the Court continued,] “. . . the Constitution recognizes higher values than speed and efficiency. Indeed, one might fairly say of the Bill of Rights in general, and the Due Process Clause in particular, that they were designed to protect the fragile values of a vulnerable citizenry from the overbearing concern for efficiency and efficacy that may characterize praiseworthy government officials no less, and perhaps more, than mediocre ones.”407 U.S. at 90-91 n. 22,92 S.Ct. at 1999 .
In summary, we believe that the interests of justice are best served by vacating the judgment below and remanding this case to the district court, in order that the court may pass upon the issue presented in the light of the decisions in
Fuentes, Overmyer,
Swarb v. Lennox, and Hall v. Carson,
supra.
Private parties dealing at arms’ length certainly should have the right to agree upon whatever contract terms they may choose. This right, however, as the cases discussed above indicate, may be circumscribed by factors that are factually relevant. The district court adverted to one such factor, deemed significant in
Overmyer, i. e.,
that printed form leases such as that executed by Baldemar Gonzalez “are offered to tenants [espe-
*1052
dally to penurious migrant workers] on ‘an accept this or get nothing basis’ and that needy tenants are compelled to sign without any real freedom of contract.” In view of this fact, indeed, precisely because of this fact, we remand this case to the district court for a specific finding as to whether Gonzalez signed with “an intentional relinquishment or abandonment of a known right or privilege,” and whether he waived his constitutional right to due process “voluntarily, intelligently, and knowingly.” On the facts as presented by the record before us, the heavy burden imposed on appellees to rebut the presumption against waiver of constitutional rights, see
Fuentes, supra,
We will await both a ruling by the district court and the expanded record before making a final disposition of this appeal.
Remanded.
Notes
. For purposes of this decision we assume that the acts here complained of constituted state action within the meaning of the Fourteenth Amendment.
. Left behind were a cooking stove, a refrigerator, a used lawn mower, a broken couch, two chairs, a dresser mirror, two beds and mattresses, a chest of drawers, a tub full of clothing, a bedspread, a small round table, an electric clock, and a child’s play horse.
. We declared this statute unconstitutional on November 2, 1972, in Hall v. Garson,
Section 1. The operator of any residential house, apartment, duplex or other single or multi-family dwelling, shall have a lien upon all baggage and all other property found within the tenant’s dwelling for all rents due and unpaid by the tenant thereof ; and said operator shall have the right to take and retain possession of such baggage and other property until the amount of such unpaid rent is paid. * * *
Sec. 3. Notwithstanding any provisions to the contrary * * * there shall be exempt from the lien set out in Section 1 of this Act, the following: * * *
(1) one automobile and one truck, (2) family library and all family portraits and pictures, (3) household furniture to the extent of one couch, two living room chairs, dining table and chairs, all beds and bedding, and all kitchen furniture and utensils, * * *.
Sec. 5. Nothing contained herein shall prejudice any contractual agreements entered into by lessors and lessees concerning the subject matter of this article.
The district court ruled that, even though § 3,
supra,
which reflects the public policy of the State of Texas to protect certain items of property from landlords’ liens, did cover Mrs. Gonzalez’ seized property, the protection thereby afforded was vitiated by the operation of § 5,
supra.
We are not persuaded that the salutary public policy set out in § 3 was designed to be so easily circumvented as in a lease agreement where the parties do not deal at arms’ length. As the three-judge court in Laprease v. Raymours Furniture Co., Inc.,
Beds, stoves, mattresses, dishes, tables and other necessaries for ordinary day-to-day living are, like wages in
Sniadaoh
[Sniadach v. Family Finance Corp.,
Lack of refrigeration, cooking facilities and beds create hardships, it would seem, equally as severe as the temporary withholding of % of Sniadach’s pay, and measured by Sniadaoh, the hardships imposed cannot be considered de minimus.
*1046 We question whether a landlord, especially a creature of the state acting under color of state law, should be allowed to seize such property without notice. At the very least, any contractual waiver of notice prior to seizure should be made absolutely clear to a tenant waiving that right.
.
See also,
Brady v. United States,
. See cases cited in text at, and in, note 4 supra.
. Overmyer and Swarb v. Lennox were decided on February 24, 1972; Fuentes on June 12, 1972.
.
Fuentes
was a consolidated appeal in which the Supreme Court decided two cases presenting the same issues: Fuentes v. Faircloth,
. Fuentes v. Faircloth,
supra,
. Swarb v. Lennox,
. Id. at 1100.
. See note 3 supra.
. See § 3 of Article 5238a, note 3 supra.
. The district court properly ruled that the appellee housing authority can obtain lien rights no greater than those obtained by a private landlord:
While this Court might feel that the Housing Authority of Hidalgo County, a creature of the State, should not extract from its tenants a greater lien than that created by statute, and that all articles exempt from the lien should have been returned to Mrs. Gonzalez, the Court feels that it cannot distinguish between the Housing Authority as a landlord and a private landlord, and therefore refuses to make such a distinction.
District Court Memorandum Opinion of January 3, 1972, at 5-6.
