## Facts

- Southwest Livestock & Trucking Co., Inc. (a Texas livestock business) borrowed about $400,000 from Reginaldo Ramón (a Mexican citizen) using rolling Mexican promissory notes (pagarés) renewed monthly.
- Over several years, Southwest paid interest and executed new notes to cover outstanding principal; the effective interest charged was roughly 52%, and the final note expressly provided 48% interest until paid.
- The interest rates were lawful under Mexican law but would have violated Texas usury limits.
- After Southwest defaulted in October 1994, Ramón sued in Mexico on the final pagaré and obtained a money judgment awarding principal and 48% interest.
- Southwest challenged the Mexican judgment in Mexico on service and personal-jurisdiction grounds; the Mexican appellate court affirmed.
- Southwest and its officers (the Hargroves) then sued Ramón in federal court in Texas under Texas usury law to recover allegedly usurious interest.
- Ramón argued the Mexican judgment must be recognized under Texas’s foreign-country money-judgment recognition statute and would bar the usury claims through preclusion.
- The district court refused to recognize the Mexican judgment on Texas public-policy grounds (anti-usury) and granted summary judgment to Southwest and the Hargroves.

## Issues

1. Whether Texas’s public policy against usury permitted refusal to recognize a Mexican money judgment under the Texas Uniform Foreign Country Money-Judgment Recognition Act.
2. Whether alleged defects in service of process and personal jurisdiction in the Mexican proceedings provided a statutory basis for nonrecognition.
3. If the Mexican judgment must be recognized, whether it would preclude the Texas usury claims (res judicata/collateral estoppel) on remand.

## Decision

- The Fifth Circuit vacated the district court’s summary judgment and remanded.
- The court held the Mexican money judgment satisfied the Texas Uniform Foreign Country Money-Judgment Recognition Act and had to be recognized.
- The court rejected the public-policy rationale; a high interest rate lawful where imposed did not meet the Act’s narrow “repugnant to public policy” standard.
- The court held service and personal jurisdiction were adequate because service was effected under the Inter-American Convention on Letters Rogatory and its Additional Protocol.
- The court instructed the district court to recognize the Mexican judgment and then address its preclusive effect on the Texas usury action.

## Legal Principles

- Under the Texas Uniform Foreign Country Money-Judgment Recognition Act, a qualifying foreign-country money judgment is conclusive and enforceable unless a statutory ground for nonrecognition is proven.
- The Act’s public-policy exception is narrow; recognition may be denied only when the foreign judgment or its underlying cause of action is repugnant to a fundamental Texas policy, not merely because foreign law differs from Texas law.
- Comity considerations support recognition of foreign judgments rendered under fair procedures, particularly in commercial disputes between sophisticated parties.
- Proper service and personal jurisdiction in the foreign proceeding defeat nonrecognition grounds based on lack of jurisdiction; treaty-compliant service under the Inter-American Convention on Letters Rogatory can satisfy these requirements.
- Once recognized, a foreign-country money judgment is enforced similarly to a sister-state judgment, and the preclusive effects of the foreign judgment are determined in subsequent proceedings.

## Conclusion

The Fifth Circuit held that Texas courts must recognize a Mexican money judgment on a commercial loan despite interest rates that would be usurious under Texas law, because the public-policy exception is limited and the Mexican court’s jurisdiction and service complied with governing treaty procedures; the case was remanded to recognize the judgment and assess preclusion.


Sw. Livestock & Trucking Co. v. Ramón, 169 F.3d 317 (5th Cir. 1999)