Case Name: MAGNOLIA PETROLEUM CO. v. HUNT
Court: Supreme Court of the United States
Jurisdiction: United States
Decision Date: 1943-12-20
Citations: 320 U.S. 430
Docket Number: No. 29
Parties: MAGNOLIA PETROLEUM CO. v. HUNT.
Judges: Mr. Justice Murphy joins in this dissent.
Reporter: United States Reports
Volume: 320
Pages: 430–462

Head Matter:
MAGNOLIA PETROLEUM CO. v. HUNT.
No. 29.
Submitted October 20, 1943.
Decided December 20, 1943.
Messrs. Cullen R. Liskow and Homer Hendricks submitted for petitioner.
Sullivan H. Hunt, pro se.

Opinion:
Mr. Chief Justice Stone
delivered the opinion of the Court.
The question for decision is whether, under the full faith and credit clause, Art. IV, § 1 of the Constitution of the United States, an award of compensation for personal injury under the Texas Workmen's Compensation Law, Title 130 of the Revised Civil Statutes of Texas, bars a further recovery of compensation for the same injury under the Louisiana Workmen's Compensation Law, Title 34, Chapter 15 of the Louisiana General Statutes.
Magnolia Petroleum Company, petitioner here, employed respondent in Louisiana as a laborer in connection with the drilling of oil wells. In the course of his employment respondent, a Louisiana' resident, went from Louisiana to Texas, and while working there for petitioner on an oil well, he was injured by a falling drill stem. He sought and procured in Texas an award of compensation for his injury under its Workmen's Compensation Law, and petitioner's insurer made payments of compen sation as required by the statute and the award. The award became final in accordance with the terms of the Texas statute.
Respondent then brought the present proceeding in the Louisiana District Court to recover compensation for his injury under the Louisiana Workmen's Compensation Law. Petitioner filed exceptions to respondent's petition on the ground that the recovery sought was barred as res judicata by the Texas award which, by virtue of the constitutional command, was entitled in the Louisiana courts to full faith and credit. The District Court overruled the exceptions and gave judgment for the amount of the compensation fixed by the Louisiana statute, after deducting the amount of the Texas payments. The Louisiana Court of Appeal affirmed, 10 So. 2d 109, and the Supreme Court of Louisiana refused writs of certiorari and review for the reason that it found "no error of law in the judgment complained of." We granted certiorari, 319 U. S. 734, because of the importance of the constitutional question presented and to resolve an apparent conflict of the decision below with our decisions in Chicago, R. I. & P. Ry. Co. v. Schendel, 270 U. S. 611, and Williams v. North Carolina, 317 U. S. 287; cf. Alaska Packers Assn. v. Industrial Accident Comm'n, 294 U. S. 532; Pacific Employers Ins. Co. v. Industrial Accident Comm'n, 306 U. S. 493.
In Texas a compensation award against the employer's insurer (with exceptions not here applicable, cf. Revised Civil Statutes, Art. 8306, § 5) is explicitly made by statute in lieu of any other recovery for injury to the employee, since Art. 8306, § 3 provides that employees subject to the Act "shall have no right of action against their employer or against any agent, servant or employé of said employer for damages for personal injuries . . . but such employés . . . shall look for compensation solely to the ^ association [the insurer]." A compensation award which has become final "is entitled to the same faith and credit as a judgment of a court." See Ocean Accident & Guarantee Corp. v. Pruitt, 58 S. W. 2d 41, 44-45 (Tex. Comm. App.), holding that an award is res judicata, not only as to all matters litigated, but as to all matters which could have been litigated in the proceeding with respect to the right to compensation for the injury. To the same effect are Traders & General Ins. Co. v. Baker, 111 S. W. 2d 837, 839, 840 (Tex. Comm. App.); Middlebrook v. Texas Indemnity Ins. Co., 112 S. W. 2d 311, 315 (Tex. Civ. App.); cf. Federal Surety Co. v. Cook, 119 Tex. 89, 24 S. W. 2d 394. The Texas Court of Civil Appeals formerly held that a Texas employee could recover compensation of his Texas employer for an injury in another state for which he had already recovered compensation in that state. Texas Employers' Ins. Assn. v. Price, 300 S. W. 667. But in declining to review the case, the Texas Supreme Court expressly pointed out that this ruling had not been challenged, and that it was leaving the question undecided, 300 S. W. 672. The right of a second recovery in such circumstances was promptly abolished by statute. Revised Civil Statutes, Art. 8306, § 19. And under this statute a compensation award may not be had in Texas if the employee has claimed and received compensation for his injury under the laws of another state. Travelers Insurance Co. v. Cason, 132 Tex. 393, 396, 124 S. W. 2d 321.
The Louisiana Court of Appeal recognized that Texas had jurisdiction to award compensation to respondent for the injury received while working for petitioner within the state, and that the award has the same force and effect in Texas as a judgment rendered by a court of competent jurisdiction in that state. But it thought that full faith and credit did not require the Louisiana courts to give effect to the judgment as res judicata because Louisiana, despite the command of the full faith and credit clause, was entitled to give effect to its own statute prescribing compensation for resident employees of a resident employer even though the injury occurred outside the state.
It does not appear, nor is it contended, that Louisiana more than Texas allows in its own courts a second recovery of compensation for a single injury. The contention is that since Louisiana is better satisfied with the measure of recovery allowed by its own laws, it may deny full faith and credit to the Texas award, which respondent has procured by his election to pursue his remedy in that state. In thus refusing, on the basis of state law and policy, to give effect to the Texas award as a final adjudication of respondent's claim for compensation for his injury suffered in Texas, the Louisiana court ignored the distinction, long recognized and applied by this Court, and recently emphasized in Williams v. North Carolina, supra, 294-296, between the faith and credit required to be given to judgments and that to which local common and statutory law is entitled under hte Constitution and laws of the United' States.
In the case of local law, since each of the states of the Union has constitutional authority to make its own law with respect to persons and events within its borders, the full faith and credit clause does not ordinarily require it to substitute for its own law the conflicting law of another state, even though that law is of controlling force in the courts of that state with respect to the same persons and events. Pink v. A. A. A. Highway Express, 314 U. S. 201, 209-211 and cases cited; Klaxon Co. v. Stentor Co., 313 U. S. 487, 496-498. It was for this reason that we held that the state of the employer and employee is free to apply its own compensation law to the injury of the employee rather than the law of another state where the injury occurred. Alaska Packers Assn. v. Industrial Accident Comm'n, supra, 544-550. And for like reasons we held also that the state of the place of injury is free to apply its own law to the exclusion of the law of the state of the employer and employee. Pacific Employers Ins. Co. v. Industrial Accident Comm'n, supra, 502-505.
But it does not follow that the employee who has sought and recovered an award of compensation in either state may then have recourse to the laws and courts of the other to recover a second or additional award for the same injury. Where a court must make choice of one of two conflicting statutes of different states and apply it to a cause of action which has not been previously litigated, •there can be no plea of res judicata. But when the employee who has recovered compensation for his injury in one state seeks a second recovery in another he may be met by the plea that full faith and credit requires that his demand, which has become res judicata in one state, must be recognized as such in every other.
The full faith and credit clause and the Act of Congress implementing it have, for most purposes, placed a judgment on a different footing from a statute of one state, judicial recognition of which is sought in another. Article IY, §' 1, of the Constitution commands that "Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State," and provides that "Congress may by general Laws prescribe the Manner in which such Acts, Records, and Proceedings shall be proved, and the Effect thereof." And Congress has provided that judgments "shall have such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the State from which they are taken." Act of May 26, 1790, c. 11, 1 Stat. 122, as amended, 28 U. S. C. § 687.
From the beginning this Court has held that these provisions have made that which has been adjudicated in one state res judicata to the same extent in every other. Hampton v. McConnell, 3 Wheat. 234, 235; Christmas v. Russell, 5 Wall. 290 ; Fauntleroy v. Lum, 210 U. S. 230; Kenney v. Suprepie Lodge, 252 U. S. 411; Milwaukee County v. White Co., 296 U. S. 268; Davis v. Davis, 305 U. S. 32, 40; Titus v. Wallick, 306 U. S. 282, 291-292; Williams v. North Carolina, supra. Even though we assume for present purposes that the command of the Constitution and the statute is not all-embracing, and that there may be exceptional cases in which the judgment of one state may not override the laws and policy of another this Court is the final arbiter of the extent of the exceptions. Alaska Packers Assn. v. Industrial Accident Comm'n, supra, 547; Titus v. Wallick, supra, 291. And we pointed out in Williams v. North Carolina, supra, 294-295, that "the actual exceptions have been few and far between. . . ."
We are aware of no such exception in the case of a money judgment rendered in a civil suit. Nor are we aware of any considerations of local policy or law which could rightly be deemed to impair the force and effect which the full faith and credit clause and the Act of Congress require to be given to such a judgment outside the state of its rendition. Milwaukee County v. White Co., supra, 277, 278.
The constitutional command requires a state to enforce a judgment of a sister state for its taxes, Milwaukee County v. White Co., supra, or for a gambling debt, Fauntleroy v. Lum, supra, or for damages for wrongful death, Kenney v. Supreme Lodge, supra, although the suit in which the judgment was obtained could not have been maintained under the laws and policy of the forum to which the judgment is brought. It compels enforcement of a judgment in that forum, even though a suit upon the original cause of action was barred there by limitations before the judgment was procured, Christmas v. Russell, supra; Roche v. McDonald, 275 U. S. 449. It demands recognition of it even though the statute on which the judgment was founded need not be applied in the state of the forum because in conflict with the laws and policy of that state. Kenney v. Supreme Lodge, supra; Titus v. Wallick, supra; Williams v. North Carolina, supra.
These consequences flow from the clear purpose of the full faith and credit clause to establish throughout the federal system the salutary principle of the common law that a litigation once pursued to judgment shall be as conclusive of the rights of the parties in every other court as in that where the judgment was rendered, so that a cause of action merged in a judgment in one state is likewise merged in every other. The full faith and credit clause like the commerce clause thus became a nationally unifying force. It altered the status of the several states as independent foreign sovereignties, each free to ignore rights and obligations created under the laws or established by the judicial proceedings of the others, by making each an integral part of a single nation, in which rights judicially established in any part are given nation-wide application. Milwaukee County v. White Co., supra, 276, 277; Williams v. North Carolina, supra, 295. Because there is a full faith and credit clause a defendant may not a second time challenge the validity of the plaintiff's right which has ripened into a judgment and a plaintiff may not for his single cause of action secure a second or a greater recovery.
Here both Texas and Louisiana have undertaken to adjudicate the rights of the same parties arising from a single injury sustained in the course of employment under the same contract. Each state has awarded to respondent compensation for that injury. But whether the Texas award purported also to adjudicate the rights and duties of the parties under the Louisiana law or to control persons and courts in Louisiana is irrelevant to our present inquiry. For Texas is without power to give extraterritorial effect to its iaws. See New York Life Insurance Co. v. Head, 234 U. S. 149; Home Insurance Co. v. Dick, 281 U. S. 397. The significant question in this case is whether the full faith and credit clause has deprived Louisiana of the power to deny that the Texas award has the same binding effect on the parties in Louisiana as it has in Texas.
It is not, as the state court thought, a sufficient answer to the bar of the Texas award to assert that Louisiana has a recognized interest in awarding compensation to Louisiana employees who are injured out of the state, see Alaska Packers Assn. v. Industrial Accident Comm'n, supra, for Texas, the state in which the injury occurred, has a like interest in making an award, see Pacific Employers Ins. Co. v. Industrial Accident Comm'n, supra. And in each of the cases we have cited, the state to which the judgment was brought had an interest in the subject matter of the suit and a public policy contrary to that of the state in which the judgment was obtained. No convincing reason is advanced for saying that Louisiana has a greater interest in awarding compensation for an injury suffered in an industrial accident, than North Carolina had in determining the marital status of its domiciliary against whom a divorce decree had been rendered in another state, Williams v. North Carolina, supra, or Mississippi in stamping out gambling within its borders, Fauntleroy v. Lum, supra, or South Carolina in requiring a parent to support his child who was domiciled within that state, Yarborough v. Yarborough, 290 U. S. 202.
In each of these cases the words and purpose of the full faith and credit clause were thought to demand that the interest of the state in which the judgment was obtained and was res judicata, should override the laws and policy of the forum to which the judgment was taken. And we can perceive no tenable ground for saying that a compensation award need not be given the same effect as res judi-cata in another state as it has in the state where rendered. Such was the decision of this Court in Chicago, R. I. & P. Ry. Co. v. Schendel, supra, in which recovery of an award of compensation under the Iowa Workmen's Compensation Act was held to bar recovery in a suit against the employer in Minnesota to recover for the same injury under the Federal Employers' Liability Act. Both states had, as in this case, allowed recovery, as they were free to do but for the full faith and credit clause. This Court held that the employee, having had his remedy by the judgment in Iowa, was precluded by the full faith and credit clause from pursuing a remedy for his injury in another state. The remedies afforded to respondent by the Texas and Louisiana Workmen's Compensation Laws are likewise rendered mutually exclusive by the Texas judgment and the full faith and credit clause. The Texas award, being a bar to any further recovery of compensation for respondent's injury, is, by virtue of the full faith and credit clause, exclusive of his remedy under the Louisiana Act.
It lends no support to the decision of the Louisiana court in this case to say that Louisiana has chosen to be more generous with an employee than Texas has. Indeed no constitutional question would be presented if Louisiana chose to be generous to the employee out of the general funds in its Treasury. But here it is petitioner who is required to provide further payments to respondent, contrary to the terms of the Texas award, which, if the full faith and credit clause is to be given any effect, was a conclusive determination between the parties that petitioner should be liable for no more than the amount of the Texas award. For this reason it is not enough to say that a practical reconciliation of the interests of Texas and Louisiana has been effected by the Louisiana court. There has been no reconciliation of the liability established by the Louisiana judgment with the rights conferred on petitioner by the Texas award and the full faith and credit clause.
Here the finding of the Louisiana court that the Texas award had the force and effect of a judgment of a court of that state and is res judicata there, is in conformity to the determinations of the courts of Texas and has not been challenged by the parties. We have no occasion to consider what effect would be required to be given to the Texas award if the Texas courts held that an award of compensation in another state would not bar an award in Texas, for as we have seen, Texas does not allow such a second recovery. And if the award of compensation in Texas were not res judicata there, full faith and credit would, of course, be no bar to the recovery of an award in another state. Chicago, R. I. & P. Ry. Co. v. Elder, 270 U. S. 611, 622-623.
Whether the proceeding before the State Industrial Accident Board in Texas be regarded as a "judicial proceeding," or its award is a "record" within the meaning of the full faith and credit clause and the Act of Congress, the result is the same. For judicial proceedings and records of the state are both required to have "such faith and credit given to them in every court within the United States as they have by law or usage in the courts of the State from which they are taken."
The decision of the state court is not supported by the suggestion that the Texas award is not res judicata in Louisiana because respondent's suit there was on a different cause of action. When a state court refuses credit to the judgment of a sister state because of its opinion of the nature of the cause of action or the judgment in which it is merged, an asserted federal right is denied and the sufficiency of the grounds of denial are for this Court to decide. Titus v. Wallick, supra, 291 and cases cited; and see Adam v. Saenger, 303 U. S. 59, 64 and cases cited. Respondent's injury in Texas did not give rise to two causes of action merely because recovery in each state is- under a different statute, or because each affords a different measure of recovery. Chicago, R. I. & P. Ry. Co. v. Schendel, supra; Baltimore Steamship Co. v. Phillips, 274 U. S. 316; see Wabash R. Co. v. Hayes, 234 U. S. 86, 90. The grounds of recovery are the same in one state as in the other — the injury to the employee in the course of his employment. The whole tendency of our decisions under the full faith and credit clause is to require a plaintiff to try his whole cause of action and his whole case at one time. He cannot split up his claim and "a fortiori he cannot divide the grounds of recovery." United States v. California & Oregon Land Co., 192 U. S. 355, 358. Respondent was free to pursue his remedy in either state but, having chosen to seek it in Texas, where the award was res judicata, the full faith and credit clause precludes him from again seeking a remedy in Louisiana upon the same grounds. The fact that a suitor has been denied a remedy by one state because it does not afford a remedy for the particular wrong alleged, may not bar recovery in another state which does provide a remedy. See Troxell v. Delaware, L. & W. R. Co., 227 U. S. 434; cf. Ash Sheep Co. v. United States, 252 U. S. 159, 170. But as we decided in the Schendel case it is a very different matter to say that recovery can be had in every state which affords a remedy.
The suggestion that there is a second and different cause of action in Louisiana, merely because Louisiana law authorizes compensation, and in a different measure than does Texas, or because the jurisdiction of the court of one state depends on the place of the injury and that of the other on the place of the employment contract, would if accepted prove too much. Apart from the demands of full faith and credit, recovery in a transitory action for injury to person or property, whether in tort or for compensation, can of course only be had in conformity to the law of the state where the action is maintained. Even where the state of the forum adopts and applies as its own the law of the state where the injury was inflicted, the extent to which it shall apply in its own courts a rule of law of another state is itself a question of local law of the forum. Finney v. Guy, 189 U. S. 335; Klaxon Co. v. Stentor Co., supra, 496, 497; cf. Worcester County Trust Co. v. Riley, 302 U. S. 292, 299. And the law of a state is embodied as well in its common law rules as in its statutes. Erie R. Co. v. Tompkins, 304 U. S. 64, 78, 79; see Mr. Justice Holmes, dissenting in Black & White Taxicab Co. v. Brown & Yellow Taxicab Co., 276 U. S. 518, 532-536.
If an employee employed in one state but injured in another has a different cause of action for compensation in each state because each has its own compensation statute, it could as well be argued in any case where plaintiff has recovered a judgment in one state, and seeks a second recovery in a second state for the same injury, that he is suing upon a second and different cause of action. But it has never been thought that an actionable personal injury gives rise to as many causes of action as there are states whose laws will permit a suit to recover for the injury or that despite the full faith and credit clause the injured person, more than one entitled to recover for breach of contract, could go from state to state to recover in each damages or compensation for his injury. A judgment in tort or in contract is not immune from the requirement of full faith and credit because the successful plaintiff could have maintained his suit under the law of other states and have secured a larger recovery in some, or because the jurisdiction of the court in one state to hear the cause may depend upon some facts different from the facts necessary to sustain the jurisdiction in another. Cf. Baltimore Steamship Co. v. Phillips, supra; Eldred v. Bank, 17 Wall. 546; Wabash R. Co. v. Hayes, supra; Kenney v. Supreme Lodge, supra. And we cannot say that a workmen's compensation award for injury stands on any different footing. In fact Chicago, R. I. & P. Ry. Co. v. Schendel, supra, held that it did not and we see no reason to depart from its ruling.
Reversed.
An employer becomes subject to the Act by becoming a subscriber under it by giving notice to the Industrial Accident Board (Texas Rev. Civ. Stat., Title 130, Art. 8308, § 18 a) and providing insurance required by the Act (Art. 8308). If an employee of a subscriber sustains an injury in the course of his employment, he is entitled -to compensation without regard to the fault of the employer (Art. 8306, § 3 b), unless he has given timely notice of his intention not to waive his rights of action at common law and under other statutes of Texas. In that event he may sue for the remedies which they afford (Art. 8306, § 3 a). Employees of non-subscribers are not entitled to workmen's compensation, but may sue to recover for injuries received in the course of their employment without being subject to certain common law defenses (Art. 8306, § 1, 4). When an employee is entitled to compensation, he has no other right of action against the employer for injuries (Art. 8306, §3).
The statute specifies the amounts of compensation, including expenses, payable for various injuries (Art. 8306, § 6-18). It provides that awards are to be made in the first instance by the Industrial Accident Board (Art. 8307). In order to obtain a review of an award, a party must within 20 days give notice that he will not abide by it and within 20 days after giving notice, must file suit in an appropriate court (Art. 8307, § 5). In such a suit the trial is de novo (id.). If no such notice is given, or no such suit is filed within the times prescribed, the award becomes final (id.).
Respondent filed with the Texas Industrial Accident Board a claim for compensation for his injury under the Texas Workmen's Compensar tion Law, as is the usual method of instituting a proceeding before the Board. Without awaiting an award on respondent's claim petitioner's insurer paid respondent compensation for his injury at the statutory maximum rate for seventy-three weeks. A dispute as to the proper prognosis of respondent's injury, a request for advice made by respondent to the Board, and a suspension by the insurer of further compensation payments to respondent, on the ground that his total disability had terminated, all prompted the Board to set the case for a hearing on his pending claim. Respondent received notice of the hearing and was requested to furnish medical evidence of his continued disability. Upon his failure to do this, the Board entered on December 3, 1940, as the full compensation for his injury, an award of a lump sum for total disability for 75 weeks and of weeldy payments for partial disability for a further period of 125 weeks, and directed that payments already made by the insurer be credited upon the award. Respondent was notified as to the appeal he was required to take if he was dissatisfied with the award. No appeal was taken, and the award became final. Tex. Rev. Civ. Stat., Art. 8307, § 5. Respondent has refused payments which have been tendered to him subsequent to the making of the Texas award. On December 18,1940, he began the present suit in Louisiana.
The statute is applicable to all employees in certain specified hazardous occupations (including the work performed by respondent), and to employees in other occupations by voluntary contract between the employer and the employee. La. Gen. Stat., Title 34, Ch. 15, §4391. Such employees as receive injuries in the course of their employment are entitled to compensation (§ 4392) in specified amounts (§4398), unless the contract of employment provides otherwise (§ 4393), whether the injury is or is not due to the fault of the employer (§ 4427). If the employee elects to be covered under the Act, but the employer elects not to be, then in suits by the employee to recover for injuries received in the course of his employment, certain common law defenses are abolished (§4394). The compensation award may be fixed by agreement of the parties (§ 4407), or may be obtained by suit in the district court (§ 4408), with right of appeal to the appropriate appellate courts (§4409). And as in the present case, the statute is deemed under some circumstances to be applicable to injuries received by the employee without the state. Hargis v. McWilliams Co., 9 La. App. 108, 119 So. 88; Selser v. Bragmans Bluff Lumber Co., 146 So. 690 (La. App.).
See, e. g., Huntington v. Attrill, 146 U. S. 657; Fall v. Eastin, 215 U. S. 1; Olmsted v. Olmsted, 216 U. S. 386; Converse v. Hamilton, 224 U. S. 243; Hood v. McGehee, 237 U. S. 611; Broderick v. Rosner, 294 U. S. 629, 642; cf. Wisconsin v. Pelican Ins. Co., 127 U. S. 265, 293 with Milwaukee County v. White Co., supra, 278.
But cf. American Law Institute, Restatement of Conflict of Laws (1934) §403:
"Award already had under the Workmen's Compensation Act of another state will not bar a proceeding under an applicable Act, but the amount paid on a prior award in another state will be credited on the second award."
This would seem to be intended as nothing more than a statement of local rules of conflict of laws when unaffected by the full faith and credit clause, since full faith and credit, if it does not require that a first award bar a second, would not compel credits upon the second award of payments made under the first. If more was intended, the statement is, as the Advisers to the American Law Institute stated, "surprising." Proceedings of American Law Institute (1932) Yol. X, p. 76. It is the more so as the statement would then conflict with the ratio decidendi of Chicago, R. I. & P. Ry. Co. v. Schendel, 270 U. S. 611, which had been decided some six years before. Even as a matter of local law while the decision of the state courts on this point are in conflict, the following are contrary to the rule expressed in the Restatement: Hughey v. Ware, 34 N. M. 29, 276 P. 27; Tidwell v. Chattanooga Boiler & T. Co., 163 Tenn. 420, 648, 43 S. W. 2d 221, 45 S. W. 2d 528; DeGray v. Miller Bros. Const. Co., 106 Vt. 259, 277-278, 173 A. 556.
Any implication to the contrary in Troxell v. Delaware, L. & W. R. Co., 227 U. S. 434, must be considered as overruled by Wabash R. Co. v. Hayes, 234 U. S. 86, 90; cf. Baltimore Steamship Co. v. Phillips, 274 U. S. 316, 323.
Cf. Anderson-Berney Realty Co. v. Plasida Soria, 123 Tex. 100, 67 8. W. 2d 222. If petitioner bad any defense to Hunt's suit under Louisiana law, it was not tbe award but the implied contract. See Middleton v. Texas Power & Light Co., 108 Tex. 96, 185 S. W. 556, aff'd 249 U. S. 152. Petitioner, however, pleaded only the award for its defense.