United States Supreme Court
210 U.S. 230 (1908)
Lum (defendant) engaged in speculation regarding the cotton futures market. This speculation resulted in Lum owing a debt to Fauntleroy (plaintiff). The transaction at issue occurred in Mississippi. When Lum refused to repay the money, Fauntleroy initiated an arbitration proceeding, which concluded with a judgment in Fauntleroy’s favor. Fauntleroy then brought a case in the Missouri state court, where he sought to enforce the judgment against Lum. The Missouri court had proper personal jurisdiction over Lum and entered a directed verdict in favor of Fauntleroy. In the Missouri court, Lum argued that the transaction he and Fauntleroy engaged in was illegal under Mississippi law. The Missouri court refused to hear this argument. Lum then brought an appeal before the Mississippi Supreme Court, which found in Lum’s favor. The court specifically held that the Missouri court could not enforce an illegal transaction. Fauntleroy appealed.
Rule of Law
Holding and Reasoning (Holmes, J.)
Dissent (White, J.)
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