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Morris v. Jones, 329 U.S. 545, 67 S.Ct. 451, 91 L.Ed. 488, 168 A.L.R. 656

Facts

Chicago Lloyds, an unincorporated association authorized to conduct insurance business in Illinois, was placed in liquidation by an Illinois court in 1938. Prior to this, Charles B. Morris had sued Chicago Lloyds in Missouri for malicious prosecution and false arrest, obtaining a judgment while the Illinois liquidation proceedings were ongoing. Despite being aware of the stay order issued by the Illinois court, Morris continued his suit in Missouri and later sought to have his judgment recognized in the Illinois liquidation proceedings, which was disallowed by the Illinois Supreme Court.

So far as they are relevant to the question before us, the facts of this case may be briefly stated. As part of its policy in regulating the insurance business, Illinois has formulated a system for liquidating the business of any Illinois insurance concern that falls below requisite standards.

Issue

Did the Illinois Supreme Court fail to give full faith and credit to the Missouri judgment when it disallowed the claim based on that judgment in the liquidation proceedings?

The question now here is whether in disallowing the claim based on the Missouri judgment against Chicago Lloyds, Illinois failed to give full faith and credit to the judgment of a sister State, as required by Article IV, s 1 of the Constitution.

Rule

The Full Faith and Credit Clause requires that judgments from one state be given the same faith and credit in another state as they have in the state where they were rendered, unless there are jurisdictional infirmities.

The Full Faith and Credit Clause and the statute which implements it (R.S. s 905, 28 U.S.C. s 687, 28 U.S.C.A. s 687) require the judgments of the courts of one State to be given the same faith and credit in another State as they have by law or usage in the courts of the State rendering them.

Analysis

The U.S. Supreme Court analyzed whether the Illinois Supreme Court's refusal to recognize the Missouri judgment was consistent with the Full Faith and Credit Clause. The Court noted that the Illinois liquidation proceedings had vested all property of Chicago Lloyds in the liquidator, and that the Illinois law required all claims against the assets to be proven on their merits. The Court concluded that the Illinois Supreme Court's decision did not violate the Full Faith and Credit Clause, as it was within Illinois's rights to establish its own procedures for claims against the assets of an insurance company in liquidation.

The single point of our decision is that the nature and amount of petitioner's claim has been conclusively determined by the Missouri judgment and may not be relitigated in the Illinois proceedings, it not appearing that the Missouri court lacked jurisdiction over either the parties or the subject matter.

Conclusion

The U.S. Supreme Court reversed the Illinois Supreme Court's decision, holding that the nature and amount of Morris's claim had been conclusively determined by the Missouri judgment and could not be relitigated in Illinois.

Reversed.

Who won?

The prevailing party was the liquidator of Chicago Lloyds, as the U.S. Supreme Court ruled in favor of the Illinois court's authority to manage claims against the assets in liquidation.

The liquidator declined to recognize the Missouri judgment as such, maintaining that the Missouri creditor must prove his claim on its merits, precisely as did Illinois creditors.

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