Hunter v. Connelly

• Decision Date: 27 October 1969
• Docket Number: No. 5--5018,5--5018
• Citation: 247 Ark. 486,446 S.W.2d 654
• Parties: Bonnie HUNTER and Bonnie Jo Connelly, Appellants, v. John L. CONNELLY, Nell Jean Connelly Miller and Arthur P. Connelly, Appellees.
• Court: Arkansas Supreme Court

Page 654

446 S.W.2d 654

247 Ark. 486

Bonnie HUNTER and Bonnie Jo Connelly, Appellants, v. John L. CONNELLY, Nell Jean Connelly Miller and Arthur P.

Connelly, Appellees.

No. 5--5018.

Supreme Court of Arkansas.

Oct. 27, 1969.

Rehearing Denied Dec. 1, 1969.

Curtis L. Ridgway Jr., Hot Springs, and John C. Echols, Arkadelphia, for appellants.

Wootton, Land & Matthews, Hot Springs, for appellees.

HOLT, Justice.

The appellants brought this action for specific performance of three written instruments which they contend constitute a 'Bill of Sale.' Appellants alleged that these instruments were executed by Mrs. Jeannette Connelly, who is now deceased. She was the proprietor and later majority shareholder of Connelly Press, Incorporated.

Appellants, Bonnie C. Hunter and Bonnie Jo Connelly, are respectively the widow and adult daughter of Joseph Connelly who died on April 28, 1959, subsequent to the date of these written instruments. His widow, appellant Bonnie C. Hunter, was convicted of involuntary manslaughter as a result of his death. Appellees are the surviving three children of Jeannette Connelly.

Appellants base their cause of action on three instruments, one dated July 31, 1954, and two dated October 27, 1958. The appellants contend these instruments are bills of sale executed by Jeannette Connelly conveying a one-third interest in her business and a one-fourth interest in the balance of her property to her son, Joseph Connelly, and his wife and daughter, the appellants, as joint tenants. Appellants brought their cause of action on June 14, 1967 for the specific performance of these three instruments and for a transfer to them of their alleged ownership interest. The appellees controverted appellants' claim, alleging that the signature of Jeannette Connelly was a forgery and invoked other affirmative defenses such as statute of limitations, laches, etc. The trial court dismissed appellants' complaint for want of equity specifying the grounds for the dismissal of their complaint.

For reversal the appellants urge that the trial court erred in finding that: Appellants' cause of action is barred because of their failure to assert a claim against the estate of Jeannette Connelly; their claim is barred by laches; their claim is barred by the statute of limitations; and the appellants failed to prove their cause of action by a preponderance of the evidence. Since we agree with the chancellor that the appellants' cause of action is barred by our five-year statute of limitations, Ark. Stat.Ann. §§ 37--209, 37--210 (Repl.1962), it becomes unnecessary for us to discuss the correctness of the other findings of the chancellor.

According to the appellants, Joseph Connelly, in 1954, was considering leaving his job in his mother's printing business on account of discord within the family. Appellant Hunter testified that to alleviate the family discord, Mrs. Jeannette Connelly, on July 31, 1954, by a written Bill of Sale and Ownership Agreement, which was introduced into evidence, sold and conveyed to her son Joseph, with full survivorship rights in the appellants, a one-third interest in the business and a one-fourth interest in all her other property in recognition of his years of service and in return for her son's promise to remain as a linotype operator in the printing business. There was a joint covenant to keep the agreement confidential. Mrs. Connelly convenanted that the conveyance of this interest could not be altered or changed by her through a will or in any other manner. This instrument admittedly was written by appellant Hunter and her husband.

However, strife within the Connelly family continued. In March 1958 appellant Hunter and her then husband, Joseph Connelly, filed a $100,000.00 lawsuit against Jeannette Connelly and Arthur Connelly as a result of a family altercation in which appellant Hunter claimed she was struck by her mother-in-law and brother-in-law, Arthur. Then followed the two written agreements dated October 27, 1958. By these instruments appellant Hunter and her then husband, Joseph, agreed to discontinue their lawsuit and in return Mrs. Jeannette Connelly again recognized that the business legally belongs to Joe, Art and John Connelly' and each should have a one-third interest. Further, that '(i)t is agreed by both Joseph E. Connelly and Mrs. J. M. Connelly to full co-owner and survivorship rights from either one's estate to Bonnie and Bonnie Jo Connelly, not to void or change this by divorce, separation, other partnerships or incorporation or by Will and Testament. This is recognized as a Bill of Sale and Transfer, as co-owner, to Bonnie Connelly, $10.00 and other consideration, and is legal and binding. No transaction shall be made without my signature as co-owner. Should I die first, or Joe and I die, ownership revoerts to Bonnie Jo Connelly. Should discord at the shop continue, Mrs. J. M. Connelly and Joe Connelly both agree to cash settlement immediately.' There was a provision in which appellant Hunter's husband, Joe, agreed to refrain from any act that would alter appellants' survivorship rights. These instruments were also written by appellant Hunter and her husband, Joe Connelly and signed by them and Mrs. Jeannette Connelly. There was no covenant to keep these agreements confidential.

In December 1958 appellant Hunter and her husband separated and he instituted a suit for divorce. They were estranged at the time of his death in April 1959.

Assuming, without deciding, that these instruments are valid, it is undisputed that the last two agreements were breached four months after their execution when the business was incorporated in February 1959. All of the assets together with Mrs. Connelly's title and interest in the printing business were transferred to Connelly Press, Inc. Mrs. Connelly received a majority of the issued stock. A portion of the authorized stock was distributed in equal shares to appellees. Joseph Connelly received no stock in the corporation. However, he was elected to the board of directors. Joseph Connelly understood that he was not receiving stock. He disclaimed interest in any ownership saying that he was only interested in having a job. The evidence shows that he affixed his signature as a director to the minutes of the first business meeting on February 25, 1959.

Following Joseph Connelly's death on ...