## Facts

- The Levins obtained a personal judgment against Gladstein in the Superior Court of Baltimore City, Maryland, after personal service on Gladstein.
- Gladstein alleged the judgment was procured by fraud: the parties purportedly agreed the Levins would withdraw the Maryland suit (and address certain goods/consideration) if Gladstein performed, but the Levins allegedly took judgment anyway.
- The Levins sued in a North Carolina justice’s court to enforce the Maryland judgment.
- Gladstein defended by pleading that the Maryland judgment was procured by fraud and therefore should not be enforced.
- The justice’s court allowed the fraud defense to go to trial; a jury found the Maryland judgment was procured by fraud, and judgment was entered for Gladstein.
- The Levins appealed, arguing full faith and credit barred the fraud defense in North Carolina and that a justice’s court could not entertain an equitable defense.

## Issues

1. Whether the Full Faith and Credit Clause requires North Carolina to enforce a sister-state judgment when the defendant alleges and proves the judgment was procured by fraud.
2. Whether a North Carolina justice’s court may consider an equitable defense, such as fraud in procuring a judgment, in an action at law on a foreign judgment.

## Decision

- The Supreme Court of North Carolina affirmed judgment for Gladstein.
- The court held that a sister-state judgment is entitled to the same effect it would receive in the rendering state, but not greater effect.
- The court held that a judgment procured by fraud may be impeached in an enforcement action, and enforcement may be denied upon proof of such fraud.
- The court held that, although a justice’s court cannot grant affirmative equitable relief, it may entertain equitable defenses, including fraud in the procurement of the foreign judgment.
- Because the jury found the Maryland judgment was procured by fraud, North Carolina courts were not required to enforce it.

## Legal Principles

- Full faith and credit requires recognition of sister-state judgments to the extent they would be recognized in the rendering state, but does not compel enforcement of a judgment procured by fraud.
- A fraud defense is available where the fraud concerns the procurement of the judgment itself, not merely the underlying merits of the original dispute.
- Courts of limited jurisdiction that lack power to grant affirmative equitable remedies may still apply equitable defenses to deny recovery in an action at law, including an action to enforce a foreign judgment.

## Conclusion

North Carolina may refuse to enforce a sister-state judgment upon proof that the judgment was procured by fraud, and a defendant may raise that procurement-fraud defense as an equitable defense even in a justice’s court that cannot award affirmative equitable relief.


Levin v. Gladstein, 142 N.C. 482, 55 S.E. 371 (N.C. 1906)