Kelly v. Weir, PB-64-C-3.

• Decision Date: 15 July 1965
• Docket Number: No. PB-64-C-3.,PB-64-C-3.
• Citation: 243 F. Supp. 588
• Parties: Joe T. KELLY, Mrs. Gussie R. Kelly, Mary Ethel Kelly, Elizabeth J. Kelly, Joanne Kelly, George S. Lensing, Leo A. Lensing and Captan Jack Wyly, Plaintiffs, v. James WEIR and Willene R. Weir, His Wife, First National Bank of Dermott, Arkansas, and McGehee Grain Drying Cooperative, Defendants. Arkansas Grain Corporation, Intervenor. L. J. Warren and D. D. Woods, Cross-Defendants.
• Court: U.S. District Court — Eastern District of Arkansas

243 F. Supp. 588

Joe T. KELLY, Mrs. Gussie R. Kelly, Mary Ethel Kelly, Elizabeth J. Kelly, Joanne Kelly, George S. Lensing, Leo A. Lensing and Captan Jack Wyly, Plaintiffs, v. James WEIR and Willene R. Weir, His Wife, First National Bank of Dermott, Arkansas, and McGehee Grain Drying Cooperative, Defendants.

Arkansas Grain Corporation, Intervenor.

L. J. Warren and D. D. Woods, Cross-Defendants.

No. PB-64-C-3.

United States District Court E. D. Arkansas, Pine Bluff Division.

July 15, 1965.

COPYRIGHT MATERIAL OMITTED

William H. Drew, Lake Village, Ark., for plaintiffs and L. J. Warren and D. D. Woods, cross-defendants.

James M. Barker, Jr., Hamburg, Ark., for defendants, James Weir and Willene Weir.

Robert B. Gibson, Dermott, Ark., for First Nat. Bank of Dermott.

Arthur R. Macom, Stuttgart, Ark., for McGehee Grain Drying Cooperative and Arkansas Grain Corp.

HENLEY, Chief Judge.

This is another phase of the protracted and hotly contested litigation involving James Weir of Dermott, Arkansas, and his 995 acre farm located in Chicot County, Arkansas. The controversy began as one between the Government, on the one hand, and Mr. Weir, on the other hand, arising out of Mr. Weir's refusal to abide by the acreage control provisions of the Agricultural Adjustment Act of 1938, as amended, as that Act related to rice and other crops. That controversy was finally disposed of adversely to Weir. The present controversy is between Weir, as defendant, and assignees of a certificate of purchase issued by the United States Marshal for this District following an execution sale of the Weir farm in 1962 which took place when Weir refused either to pay or to supersede pending appeal the judgment which the Court had rendered in the suit which the Government had brought against Weir to collect penalties resulting from Weir's deliberate over-planting of his 1959 rice acreage allotment. The assignees of the certificate of purchase, who presently hold a Marshal's deed to the property, are plaintiffs in the instant action and are seeking to gain possession of the farm. Mr. Weir vigorously resists their claim. There is also a subsidiary controversy between plaintiffs and the Arkansas Grain Corporation and the First National Bank of Dermott involving the soybean crop which Mr. Weir produced on the farm in 1963. The raising of that crop was financed by the Bank, and the crop was purchased by the Grain Corporation. The case has been tried to the Court without a jury, and this memorandum incorporates the Court's findings of fact and conclusions of law.

The initial controversy between Weir and the Government had its genesis in 1959 when Mr. Weir had a rice allotment of ten acres. Mr. Weir deliberately overplanted that allotment very substantially and incurred penalties of approximately $17,000. In 1960 the Government filed suit in this Court to collect those penalties, the claim being resisted on a number of grounds, including the alleged unconstitutionality of the Act. A motion for summary judgment was filed by the Government and after full consideration the Court on February 12, 1962, filed a memorandum opinion, which was not published, granting the motion. In due course judgment against Weir in the sum of $16,972.09 plus six percent interest was entered. Mr. Weir appealed from that judgment, and on November 27, 1962, the decision of the Court was affirmed. Weir v. United States, 8 Cir., 310 F.2d 149.

Mr. Weir had a right to supersede the 1962 judgment of this Court by filing a supersedeas bond. Although he would have had no difficulty in making a bond which would have been acceptable to both the Court and the Government, and although he was advised repeatedly of his right to do so and of the desirability of pursuing such a course, he consistently refused to supersede.

On February 28, 1962, at the instance of the Government a writ of execution was issued by the Clerk and delivered to the Marshal. The writ commanded the Marshal to make out of the goods, chattels, lands and tenements of Weir the principal sum of $16,972.09, plus accrued interest amounting to $1,965.92, together with costs in the amount of $59.80.

In March 1962 the Marshal's office made an unsuccessful effort to levy on personal property belonging to Weir and finally levied on his interest in the farm, which interest was the fee simple title to the land, subject to a mortgage in favor of Connecticut Mutual Life Insurance Co. and also subject to the inchoate dower interest of Mrs. Weir.

The sale of the land under the execution was duly and properly advertised, and the sale finally took place on April 17, 1962, after renewed efforts by the Government to settle the case or to induce Mr. Weir to supersede the judgment pending appeal were unsuccessful.

The highest bidder at the sale was L. J. Warren of Lake Providence, Louisiana, and the amount of his bid was $60,000. The land was sold on a credit of three months, and Mr. Warren gave bond with sureties thereon to secure the payment of the bid price within the 90 day period. The circumstances of the Warren bid and acquisition of the certificate of purchase constitute one of the issues in the instant case and will be discussed in detail later on.

Mr. Warren did not pay the amount of his bid within the 90 day period, and the Government began to press him and the sureties for payment. On September 28, 1962, Warren assigned his certificate of purchase to the present plaintiffs, namely, Joe T. Kelly, Mrs. Gussie R. Kelly, Mary Ethel Kelly, Elizabeth J. Kelly, Joanne Kelly, George S. Lensing, Leo A. Lensing, and Captan Jack Wyly, all citizens of Louisiana.

On the next day the assignees paid to the Marshal the sum of $61,639.34 including interest in satisfaction of the bid. They did not request immediate issuance of a Marshal's deed, and such a deed was not issued at the time.

The amount of the payment to the Marshal was substantially in excess of the sum required to satisfy the Court's original judgment in the initial case, and normally the overplus would have been paid over to Weir. However, by the time that the payment to the Marshal was made, certain other penalty claims of the Government against Weir had gone to judgment, and satisfaction of those judgments, as well as the initial one, was had out of the payment made by the assignees.

Under Arkansas law, Weir had a period of one year from the date of the sale, that is to say until April 17, 1963, to redeem. Redemption would have involved payment of the purchase price plus a penalty of 15 percent thereof and other lawful charges. Ark.Stats.1947, § 30-441. Weir did not redeem within that period. Instead, on April 19, 1963, two days after the redemption period expired, he filed a motion attacking the validity of the sale. The Court held a hearing on the motion and denied it on November 14, 1963. Weir then filed a motion for a new trial or for rehearing, and the Court denied that motion on March 30, 1964. In connection with those motions the Court filed two memorandum opinions which were later published in combined form, and which appear as United States v. Weir, E.D.Ark., 235 F.Supp. 306. In those opinions, to which reference is hereby made, the events leading up to and transpiring at the sale are set forth in detail. Pursuant to the Court's November 1963 order, the Marshal executed and delivered his deed to plaintiffs.

Weir's appeals from the November 1963 and March 1964 orders were unsuccessful. Weir v. United States, 8 Cir., 339 F.2d 82.

The execution sale affected only Weir's personal interest in the farm. It did not affect the Connecticut Mutual Insurance Company's mortgage, nor did it affect the inchoate dower right of Mrs. Weir.¹ However, both Mr. and Mrs. Weir had signed the note in favor of the insurance company and both executed the mortgage. The certificate of acknowledgment appended to the mortgage reflects that Mrs. Weir in the absence of her husband acknowledged that she had executed the instrument and had waived her dower and homestead rights in the property for the purposes and considerations set forth in the instrument. This acknowledgment, coupled with Mrs. Weir's act in joining in the execution of the instrument, was sufficient under Arkansas law to waive her dower rights in the property in favor of the mortgagee even though no relinquishment of dower clause appears in the body of the instrument. Jones On Arkansas Titles, §§ 829-30; Johnson v. Parker, 51 Ark. 419, 11 S.W. 681; Dutton v. Stuart, 41 Ark. 101.

While the note and mortgage reflect an indebtedness of $60,000 the record indicates that the insurance company advanced to Weir only $30,000, and by August 27, 1963, the balance due the company, including interest, was $22,843.82. On that date four of the plaintiffs purchased the note and mortgage for the sum just mentioned. The note was endorsed to them, and a formal assignment of the mortgage was executed and delivered.

On December 30, 1963, the assignees made formal demand on Weir to vacate the premises not later than January 4, 1964, and when he failed to do so, assignees commenced this action on January 17, 1964, against Mr. and Mrs. Weir, the First National Bank of Dermott, and the McGehee Grain Drying Cooperative.² As noted, Arkansas Grain Corporation intervened voluntarily, assuming the position of a defendant. All of the plaintiffs are citizens of Louisiana, all of the defendants and the original intervenor are for jurisdictional purposes citizens of Arkansas. Certain additional parties who have been brought into the case and whose interests are aligned with the plaintiffs are citizens of Louisiana and Missouri. The amount in controversy is obviously in excess of $10,000, exclusive of interest and costs. Hence, federal diversity jurisdiction is established.

It is the position of the plaintiffs that by virtue of the Marshal's deed they are the owners of Mr. Weir's interest in the farm and are entitled to be placed in possession...