Fauntleroy v. Lum

Brief Fact Summary

Lum (Plaintiff) brought suit in Mississippi to enforce a Missouri judgment in his favor arising out of a contract that was executed and performed in Mississippi but no enforceable there because of illegality.

Synopsis of Rule of Law

A judgment rendered by a court of competent jurisdiction in one state is entitled to full faith and credit in another state as long as there are no errors of law in the judgment or the fact that the underlying cause of action is prohibited in the second state.

Facts

Lum’s (Plaintiff) predecessor in interest entered into a commodities futures contract with Fauntleroy (Defendant) in Mississippi.  Such contracts were in violation of both civil and criminal statutes of Mississippi.  An arbitration proceeding resulted in an award to Lum (Plaintiff) under the contract.  Plaintiff then sued in Missouri to enforce the award and judgment was granted in his favor.  He then brought suit in Mississippi to enforce the Missouri judgment, but the Mississippi court refused enforcement because to do so would violate express public policy.

Issue

Must the courts of one state give full faith and credit enforcement to the judgment of another state based on an agreement that violates the public policy of the state asked to enforce the judgment?

Held

(Holmes, J.)  Yes.  The judgment of a state court should have the same credit, validity, and effect in every other court in the United States that it had in the state where it was pronounced, and whatever pleas would be good to a suit that followed in such state, and no others, could be pleaded in any other court of the United States.  If the judgment of the Missouri court was based on a mistake of Mississippi law, then that judgment could have been appealed in Missouri.  Since it was not, it is enforceable in Mississippi just as it would be in Missouri.  Reversed.

Dissent

(White, J.)  Full faith and credit is a constitutional mandate of the common law concept of comity and was not meant to create new powers.  The doctrine of comity never imposed an obligation on one jurisdiction to enforce a foreign judgment that violated its own public policy.  The majority’s decision destroys the sovereignty of each state to legislate in its own perceived interests.

Discussion

When enforcement is sought in the forum state, the merits of a foreign judgment can never be examined.  The only legitimate challenge can be to the jurisdiction, personal or subject matter, of the foreign court to render the judgment.  The Supreme Court affirmed the majority opinion in this case as late as 1949.