Opinion ID: 1598165
Heading Depth: 1
Heading Rank: 3

Heading: the instant appeal (pack-kahn action)

Text: This cause is before the Court on the appeal of Sterling and certain named trustees, and the cross appeal of the Chamberlain group, from a final decree of the Circuit Court of Mobile County, Alabama, in equity sitting, entered November 29, 1971. The original bill of complaint for declaratory judgment filed by Pack, Kahn and George H. Jett Drilling Company, Inc., sought to have the Sterling Agreement held invalid and unenforceable on the ground that Sterling was not qualified to do business in Alabama at the time the contract was made, and praying in the alternative that, if valid, the court would interpret the provisions of the agreement favorable to the complainants. The next four years were consumed by an intense battle between the parties over the forum dispute as heretofore outlined. On June 8, 1967, Chamberlain filed his answer and cross bill, in general admitting and adopting the allegations of the original bill. However, Chamberlain asserted for the first time, as further grounds for the invalidity and unenforceability of the Sterling Agreement, the allegations that the agreement was obtained by reason of fraud, misrepresentation, duress, and business compulsion practiced upon Jett and Chamberlain by Sterling, its officers and attorneys. Additionally, Chamberlain alleged that the operative provisions of the Sterling Agreement are so vague and indefinite as to make the document incapable of specific performance. On May 3, 1968, Sterling filed its plea in abatement (later amended) alleging the prior pendency of the Jett-Chamberlain action, the Sterling counterclaim therein, and the pendency of the Sterling action. On March 8, 1971, the circuit court ordered the case set for trial on May 4, 1971. In the meantime, the trial court sustained demurrers to Sterling's pleas in abatement, which ruling is assigned as error. On May 3, 1971, the court entered its pretrial order, which provided, inter alia: [T]hat the trial of the case shall proceed first to a determination to the issues of the validity of the `Sterling Agreement', secondly, to a consideration of the issues relating to the construction of the `Sterling Agreement', and thirdly, to the issues relating to the accounting only if and after the Court has concluded that the `Sterling Agreement' is valid and after the issues relating to construction have been determined by the Court. On June 18, 1971, Jett amended his answer to add a cross-claim against Zink, Smyth and Sterling. Jett's cross-claim in part averred: The respondent G. H. Jett further avers that ALBERT BARNES ZINK did exert further economic duress and further intimidated G. H. Jett by stating to him in a Taxi cab at about the same day that he could stop the said Jesse True from going to the Chase Bank with his threats of law suits if Jett would give him part of his interest, which Jett subsequently did and for which there was no agreed price . . . that subsequently in 1963 Jett paid to Albert Barnes Zink approximately $142,000.00 for a quit claim deed which released any claim which Zink may have had in the Citronelle Oil Fields. . . . that sometime around 1967 Sterling Oil received from Zink approximately $140,000.00 by claiming that Albert Barnes Zink while acting on behalf of Sterling wrongfully obtained this amount from Jett . . . . that Albert Barnes Zink was acting in his representative capacity for Sterling at the time that he extracted his interest in the Citronelle Oil Fields from Jett and that when Sterling Oil found out of Zink's actions they made claim against Zink for the money which Jett paid to Zink and Zink paid Sterling $140,000.00. On July 10, 1971, after hearing the testimony of Chamberlain, Jett and Corcoran, by interlocutory order, the circuit court found: Sterling . . . executed the Sterling Agreement in New York on May 26, 1959; Zink executed the Sterling Agreement in Pennsylvania on May 27, 1959; Sterling . . . qualified to do business in Alabama on August 6, 1959; Chamberlain executed the Sterling Agreement voluntarily on August 17, 1959, in Mobile, Alabama; Jett executed the Sterling Agreement voluntarily in Shreveport, Louisiana on August 18, 1959. Although the Sterling Agreement related back to and became effective as of May 1, 1959, it was actually made and delivered after Sterling . . . qualified to do business in the State of Alabama. The Sterling Agreement is supported by adequate considerations flowing from Sterling Oil to Jett and Chamberlain. It is ORDERED, ADJUDGED AND DECREED that the Sterling Agreement is a valid, enforceable and subsisting agreement between [the parties]. It is further ordered that the remaining proceedings herein shall proceed on the premises that the Sterling Agreement is a valid, enforceable and subsisting agreement, the court reserving for future determination all controversies between the parties with respect to the meaning and enforceability vel non of the specific provisions of the Sterling Agreement. On August 2, 1971, the appellees filed a motion to set aside the decree of July 10, 1971. On November 4, 1971, after several weeks of additional testimony, the court entered a final decree ordering that The interlocutory decree entered on July 10, 1971, is hereby withdrawn, set aside, and cancelled, and finding the Sterling Agreement to be invalid, unenforceable, and without legal force or effect. No ground or grounds upon which the trial court based its finding of invalidity are set forth, but the court further found . . . that even though Sterling had unclean hands as a result of its improper actions both prior to the making of the Sterling Agreement and after the making of said agreement, that nonetheless Sterling did make contributions to the overall project [and] that Sterling is entitled to a finder's fee in a reasonable amount for having introduced Waldron to Chamberlain. The court also found that Zink wrongfully extracted a 2½% interest in the Gulf-Jett-Chamberlain transaction from Jett for a nominal consideration of $2,000.00, and that he sold this interest for $141,921.73 on April 8, 1964 . . . [and] that Zink's wrongful actions were ratified by Sterling when it required Zink to pay to it $140,000.00 of the amount received by Zink in the sale of said 2½% interest, and that Jett is entitled to recover from Sterling the $140,000.00 which was paid to Sterling by Zink, plus interest thereon from June 27, 1967. . . . On November 29, 1971, the court entered a further final decree, awarding Sterling a finder's fee of $35,000.00 and awarding Sterling an additional sum of $250,000.00 as reasonable compensation due Sterling . . . for all of its services in the matter in respect to which this litigation arose other than services rendered Chamberlain as a finder, with interest thereon totaling $500,175.00 apportioned to their respective interests among the Chamberlain group, who cross appeal asserting the money judgment in favor of Sterling as error.