Fauntleroy v. Lum
210 U.S. 230 (1908)
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Rule of Law:
Under the Full Faith and Credit Clause, a state must enforce a final judgment rendered by a sister state's court, even if the underlying cause of action is illegal and contrary to the public policy of the enforcing state, provided the rendering court had proper jurisdiction.
Facts:
- Two citizens of Mississippi, including Lum, engaged in a transaction for cotton futures within the state.
- Under Mississippi law, contracts for futures were illegal, deemed a misdemeanor, and explicitly made unenforceable in the state's courts.
- A dispute arose from the transaction, and the parties submitted the matter to an arbitrator in Mississippi.
- The submission to arbitration did not include the question of the underlying transaction's illegality.
- The arbitrator made an award against Lum, finding him liable for the losses from the futures transaction.
Procedural Posture:
- The party who won the arbitration award first sued Lum in a Mississippi state court to enforce it but subsequently dismissed the action.
- The plaintiff then filed a new suit on the award in a Missouri state court after finding Lum temporarily present in Missouri.
- The Missouri trial court refused to allow Lum to present evidence that the underlying transaction was illegal under Mississippi law and entered a judgment against him based on the award.
- The Missouri judgment was assigned to Fauntleroy.
- Fauntleroy sued Lum in a Mississippi state court to enforce the Missouri judgment.
- The Supreme Court of Mississippi held the Missouri judgment was not entitled to enforcement because the underlying transaction violated Mississippi's public policy and was criminal, entering judgment for Lum.
- Fauntleroy, the plaintiff in error, appealed the decision of the Supreme Court of Mississippi to the U.S. Supreme Court.
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Issue:
Does the Full Faith and Credit Clause of the U.S. Constitution require a Mississippi court to enforce a valid judgment from a Missouri court, even when the original cause of action underlying the Missouri judgment is illegal and violates the public policy of Mississippi?
Opinions:
Majority - Justice Holmes
Yes, the Full Faith and Credit Clause requires Mississippi to enforce the Missouri judgment. A judgment rendered by a court with jurisdiction over the parties and subject matter must be given the same credit, validity, and effect in every other state that it has in the state where it was pronounced. The original cause of action is merged into the judgment, and the judgment is not subject to impeachment in another state on the grounds that it was based on a mistake of law. The Mississippi statute declaring futures contracts unenforceable is a rule of substantive law defining the duty of its courts, not a law depriving them of jurisdiction. Because the Missouri court had jurisdiction, its judgment is conclusive on the merits of the claim, and Mississippi is constitutionally bound to enforce it.
Dissenting - Justice White
No, the Full Faith and Credit Clause does not compel Mississippi to enforce the judgment. This ruling unduly expands the clause to the point that it obliterates state lines and allows one state to overthrow the public policy and criminal statutes of another. The purpose of the clause was to make obligatory the principles of comity, which never required a sovereign to enforce a judgment that violated its own strong public policy concerning illegal acts committed within its borders by its own residents. Forcing Mississippi to give effect to a judgment based on a criminal transaction that occurred within its jurisdiction amounts to an enforced debasement of its laws and sovereignty.
Analysis:
This case establishes a robust and near-absolute interpretation of the Full Faith and Credit Clause. It prioritizes the finality and portability of state court judgments over the individual public policy concerns of an enforcing state. The decision significantly limits a state's ability to refuse enforcement of a sister state's judgment, confining the inquiry to the narrow issue of the rendering court's jurisdiction. This precedent reinforces the principle that once a claim is litigated and reduced to a judgment, the merits of that underlying claim are no longer open to collateral attack in another state's courts, regardless of how offensive the original cause of action is to that state's laws.
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