McCargo v. Steele

• Decision Date: 07 March 1958
• Docket Number: Civ. No. 630.
• Citation: 160 F. Supp. 7
• Parties: Lelia M. McCARGO, Plaintiff, v. Alma V. STEELE, Individually, and as Executrix of the Estate of Charles F. Steele, Deceased, Defendant.
• Court: U.S. District Court — Western District of Arkansas

160 F. Supp. 7

Lelia M. McCARGO, Plaintiff, v. Alma V. STEELE, Individually, and as Executrix of the Estate of Charles F. Steele, Deceased, Defendant.

Civ. No. 630.

United States District Court W. D. Arkansas, Texarkana Division.

March 7, 1958.

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Denman & Denman, Prescott, Ark., for plaintiff.

Keith, Clegg & Eckert, Oliver M. Clegg, and William A. Eckert, Magnolia, Ark., for defendant.

LEMLEY, Chief Judge.

This cause having been tried to the Court and briefed by the parties, and the Court being well and fully advised, doth file this memorandum opinion incorporating its findings of fact and conclusions of law, as authorized by Rule 52(a) of the Federal Rules of Civil Procedure, 28 U.S. C.A.

The plaintiff, Mrs. Lelia M. McCargo, a citizen of Prescott, Nevada County, Arkansas, has brought this action against the defendant, Miss Alma V. Steele, a citizen of Ohio, for the purpose of compelling the latter, individually and in her capacity as executrix of the estate of Charles F. Steele, deceased, who died testate in Nevada County on January 24, 1956, to specifically perform a certain written contract entered into between the plaintiff and the deceased on March 15, 1954, under which the plaintiff claims to be entitled to an undivided one-fourth interest in and to such real and personal property as the deceased owned at the time of his death located in Nevada County, which property includes certain mineral leases and royalties. The value of the interest which plaintiff seeks to recover is much in excess of the jurisdictional amount of $3,000.

The litigation was initially commenced by the plaintiff's filing a claim, based on the contract, against the estate of the deceased in the Probate Court of Nevada County. After an unsuccessful removal of the claim to this court, which resulted in a remand, the Probate Court transferred the matter to the Chancery Court, and thereafter it was again removed here.¹ After this second removal the plaintiff filed an "Amendment to Claim," and we shall refer to the claim and the amendment thereto as the "complaint."

It is the theory of the plaintiff that her contract with the deceased was and is valid, that she fully performed thereunder, that the deceased died without having executed certain contemplated assignments in her favor called for by the contract, that the defendant has wrongfully refused to recognize or to carry out the obligations of the contract, and that she is entitled to specific performance.

The defendant, on the other hand, takes the position that the contract was invalid at its inception for a number of reasons, hereinafter set forth, that it is unfair, harsh and oppressive and should not be specifically enforced, that it was mutually rescinded or abandoned by the parties, or that the plaintiff abandoned her rights under it, and that the plaintiff has been guilty of such laches as precludes her from obtaining the relief which she seeks.

We have considered these conflicting contentions in the light of the evidence produced at the trial (some of which was in dispute), and of what we deem to be the governing principles of Arkansas law, and we have come to the conclusion that the defendant's position cannot be sustained, and that the plaintiff is entitled to prevail.

As stated, the evidence was in certain respects disputed, but from it we find the following basic facts:

For many years prior to his death the deceased had been engaged in Nevada County, Arkansas in dealings in oil and gas leases and royalties under lands supposed to contain deposits of those minerals, which business necessitated considerable correspondence, the preparation of legal instruments of various kinds, including oil and gas leases, assignments, mineral deeds and overriding royalty agreements; it also entailed the payments of delay rentals on non-producing leases, the assessment and payment of taxes on his mineral interests, and numerous checkings of the land records of Nevada County. During his activities he was represented by the law firm of Denman & Denman of Prescott, whose secretary the plaintiff has been for about twenty years.

The evidence disclosed that the plaintiff did a considerable amount of Mr. Steele's stenographic work prior to his death, that for a time at least she prepared some of the checks signed by him in payment of delay rentals, and that she frequently would go to the Circuit Clerk's office to check land records for him. When Mr. Steele had work for the plaintiff to do, it was his custom to come to the office of Denman & Denman and there to dictate to her whatever letters or instruments he had for her to write or draw; and there was also evidence, which we credit, that on occasions on week-ends she would go to his home and there perform work. The work which the plaintiff performed for the deceased had nothing to do with her employment by Messrs. Denman & Denman, and there is no evidence that they supervised it or had anything to do with it.

During the last several years of his life Mr. Steele was in poor health, made frequent visits to his doctors, and required almost constant physical attention. There was no evidence, however, that his mental faculties were in any way impaired or that he was not fully competent to transact business and to protect his own interests in business dealings. He was never married, and all of his heirs are collateral kindred, the defendant being his sister.

At the time of his death he was the owner of substantial holdings in the newly developed Falcon oil field in Nevada County, and according to the defendant's evidence his holdings at the time of the trial were producing a gross income of about $3,100 or $3,200 per month, slightly less than they were producing at the time of his death. It is a well known fact that the Falcon field is a recent development, and there is little evidence bearing upon the deceased's financial situation prior to the discovery of oil in that field; that it was not affluent is indicated by the fact that he had made numerous small loans from the First National Bank of Magnolia, Arkansas, and on at least one occasion pledged his diamond ring as security.² At the time of his death he was indebted to the bank in a sum slightly in excess of $5,000.

The instrument in suit, which is a type-written document signed by both parties but not witnessed or acknowledged,³ is entitled "Contract & Agreement," and commenced with a recitation of Mr. Steele's poor health and short life expectancy, and of his need to have someone help him to look after his affairs. It then provides in substance that in consideration of the mutual promises of the parties, and of services rendered and to be rendered by the plaintiff, the deceased would "assign" to her an undivided one-fourth interest in and to all property, both real and personal, including mineral rights and interests, of which he might die seized and possessed in Nevada County, and that until proper assignments should be executed, he would defray her expenses for gasoline and oil incurred by her in looking after his interests. The services that the plaintiff was to perform were those of a "stenographer and assistant business manager," and she affirmatively undertook to perform those services for the remainder of Mr. Steele's life. It was further agreed that after his death she was to continue to advise and assist his "heirs, successors and assigns" in looking after his estate at "a reasonable salary to be agreed upon," and, further, that should the estate stand in need of legal services, the plaintiff was to employ a firm of lawyers of her own choice, namely, Messrs. Denman & Denman, and that should the services of that firm not be available, then she should select some other firm of her choice. The contract obviously contemplated that it was to be implemented by the execution and delivery to the plaintiff of one or more inter vivos assignments covering the interest to be conveyed to her, but it stipulated that if Mr. Steele should die before the execution of such assignments, then "this contract and agreement shall serve as an assignment to an undivided ¼th interest in and to all properties of which I may die seized and possessed in Nevada County, Arkansas." It was further agreed that if the plaintiff should die before Mr. Steele and before the execution of the contemplated assignment, then Mr. Steele would pay to her daughter the sum of $25,000 in full settlement of any claim that plaintiff might have had against him. The agreement recited that it was to continue from month to month and year to year "until terminated by death," and that it should be binding not only upon the immediate parties but also upon their heirs and assigns.

We find that after the execution of this contract the plaintiff performed under it up until the death of Mr. Steele, almost two years later, doing under his supervision and at his direction such work as she was called upon to do from time to time. Moreover, the reference in the contract to services performed by her in the past indicates that she had done similar work prior to the making of the agreement for which work Mr. Steele did not consider that she had been adequately compensated. This indication is strengthened by his unconditional agreement to pay to her daughter the sum of $25,000 should she predecease him, no minimum time being prescribed for her to perform services in the future.

On April 26, 1954, about six weeks after the contract had been signed, Mr. Steele executed his last will and testament, which was witnessed by the plaintiff, and by Mr. W. F. Denman, Jr. In that instrument the testator directed the payment of his just debts and funeral expenses, and then devised and bequeathed his entire residuary estate to his sister, the defendant here, who was designated as sole executrix to serve without bond.

Shortly after the will was made, Mr. Steele appeared in the company of his ...