Fauntleroy v. Lum
Citation: 210 U.S. 230 (1908) Court: United States Supreme Court
Facts
Lum obtained a judgment in Missouri courts arising from a futures contract in cotton. Such contracts were illegal under Mississippi law (where the transaction originally took place), but Lum obtained a valid Missouri judgment on the claim. Fauntleroy then sought to enforce the Missouri judgment in Mississippi. Mississippi courts refused to enforce the judgment, reasoning that the underlying transaction would have been void under Mississippi law.
Issue
Must a state enforce a sister-state court judgment even when the claim underlying the judgment would have been illegal or against public policy in the forum state?
Holding
Yes. The Supreme Court reversed, holding that the Full Faith and Credit Clause required Mississippi to enforce the Missouri judgment, even though the underlying futures contract was illegal under Mississippi law.
Rule / Doctrine
The Full Faith and Credit Clause requires states to give effect to the valid final judgments of sister states. A state may not refuse enforcement of a sister-state judgment on the ground that the underlying claim was contrary to the forum state’s law or public policy. Once a judgment is rendered by a court with jurisdiction, the merits of the underlying dispute — including the legality of the transaction — may not be re-examined in the enforcing state.
Significance
Fauntleroy v. Lum is one of the strongest statements of the mandatory force of the Full Faith and Credit Clause with respect to judgments. It demonstrates that while states have some flexibility in declining to apply foreign substantive law (choice of law), they have far less flexibility in refusing to enforce foreign judgments. The public policy exception that applies to choice of law does not apply to judgment enforcement.