“He hated the word Democrat,” Rufus Henscheid said. “That’s why he couldn’t stand those Medders. And he started looking into [their background]. He wanted to know really if they were fakes … . He said he just didn’t see how [their story] could be true.”
In 1966, after talking with some banker friends in Sherman, Grant found what he figured was the smoking gun.
He learned that, instead of being oil barons, the Medderses were receiving large monthly sums of money from the Poor Sisters. What’s more, he found out that there was no oil money in escrow and that the nuns wouldn’t be getting $10 million from Ernest and Margaret then or later.
However, before dropping a dime on the couple, Grant gave the news to Henscheid, who remembers the lawyer visiting him at a construction site.
“He came up there, and he said, ‘Say, do the Medders owe you any money? I know they are doing business with you.’ And I said, ‘Oh, yeah. They owe us quite a bit,’ ” Henscheid recalled.
“And Grant said, ‘Well, I’m going to recommend that you better get your money — fast. … I found out they’re fakes.’
“Turns out, he really did me a favor, because we were one of the biggest creditors the Medders had,” Henscheid said.
The couple owed his company a little more than $40,000. Henscheid began calling them repeatedly. When that didn’t work, he started showing up at their house. Eventually, he said, they began leaving their German shepherd watchdog in their front yard. Undeterred, he parked outside the Medders house and called them from the ahead-of-its-day mobile phone that took up half the cab of his pickup truck. Finally they let him in.
“Old Ernest listened to me,” Henscheid said. “And he would say, ‘Margaret we’ve got to get him paid. We’ve got to get that money to him.’ ”
By then, Grant had talked to the nuns, and the Catholic money spigot had been turned off. Only after Margaret convinced officials at Muenster State Bank — who had not yet gotten word of the family’s financial problems — to loan her $50,000 did Henscheid get paid. Others weren’t so lucky. In all about 200 creditors, large and small, eventually filed claims worth more than $2 million against the couple in bankruptcy court. They would eventually recoup about 12 cents on the dollar.
Others lost their jobs, including Virginia Herr, who had worked as the family’s secretary. The couple’s Dallas attorney came in one day “and told me things were fixing to go under,” she said. Soon the family started selling off livestock and letting employees go.
All the while, she said, Ernest and Margaret were acting like nothing was wrong.
“They were innocent,” she said, laughing at her own tongue-in-cheek comment. “But I think they were conning from the beginning.”
Henscheid agrees with only half of that. “I still don’t believe Ernest had anything to do with a possible scam of the nuns,” he said. “Margaret, however, is a different story.”
“Hey, ho! Let’s go!”
That was the bark of the auctioneer as the Medders property and possessions went on the auction block in May 1967, according to a Dallas Times-Herald story. The reporter described a carnival-like scene, with members of a nearby riding club in full cowboy attire directing the traffic that stretched bumper to bumper for 13 miles.
The cattle, the horses, most of the cars, the personal mementos all went. The only thing the Medderses managed to keep was their house, which they had declared as a homestead. The auction brought in $500,000, nowhere close to what they needed to pay off their creditors, which included banks, department stores, hotels, a dance school, a piano store, liquor stores, florists, feed mills, and a Dallas radio station where, one holiday season, the Medderses had bought air time to wish all their friends a Merry Christmas.
And there was the claim for $975,000 by the Poor Sisters of Mishawaka. Asked why the nuns weren’t seeking the full $2 million, their attorney said that they felt sorry for other creditors, especially the smaller ones.
Associated Press reporter Bill Simmons, in a November 1974 retrospective article, wrote, “After the bubble burst, a spokesman for the order said it was [the nuns’] belief that the Medders had acted in good faith. Over the years the order has declined to make any other comment about what happened.”
Word of the Medderses’ financial predicament had begun making its way through the community and the legal system several months before the auction. Their first courtroom battle came in the form of a challenge by the widow of Ernest’s late brother, who claimed that she too was entitled to a portion of the Spindletop fortune.
On the witness stand, Ernest admitted that there had never been any oil money. Instead, according to the Gainesville Register, Ernest disclosed that he and Margaret had been receiving monthly loans from the Poor Sisters for almost four years, totaling close to $2 million. After being cut off by the nuns, Ernest said, he and his wife then borrowed close to $1 million more from area banks.
The couple’s legal troubles didn’t end with the bankruptcy and the widow’s lawsuit. Twice they were charged with felony theft by check. Twice the juries came back with hung verdicts.
Despite it all, the Medderses seemed to still be in as much denial as the nuns. In a bit of spectacularly circular reasoning, the couple placed the blame for their problems on the nuns and the bankers.
“When [the Sisters] gave us the money, that’s proof that they believed [in the couple’s claim to the Spindletop money],” said Margaret in the 1974 interview with the Associated Press. “It helped make us believe. We knew they were smarter, that they knew more than we did, so we thought it must really be real” or all those smart people wouldn’t have been offering them lines of credit.
But it wasn’t real, of course. During the early 1960s, their attorney, Weir (now deceased), pursued the Medders claim through the Texas civil court system. Time and again, their claim was denied. Finally, on Oct. 11, 1965, the U.S. Supreme Court dismissed the Medders case. But as their attorney continued to search for other paths to the funds, the couple spent like drunken sailors for another two years. Even after the Supreme Court decision, from Neiman Marcus alone they bought a $75,000 mink coat, a $65,000 diamond necklace, and a $87,000 diamond ring.
The Medderses’ demise caused all sorts of financial pain for people from Muenster to Mishawaka. But perhaps the saddest trail of damage was to the couple’s children.
“It was only after I started looking back on things that I realized that Gene was manic-depressive,” said Candice Riggs Reed about her late ex-husband, Eugene Riggs, Margaret’s oldest son.
After it all fell apart, Riggs and her husband moved to Dallas. There Gene, who had studied cattle breeding at the University of Tennessee, was forced to take a job at a meat packing plant. Riggs said the job sent Gene into a deep depression and that he developed a severe drinking problem before she left him.
Likewise, Prof. Ron Melugin said his late ex-wife Cathy Medders, Margaret and Ernest’s daughter, also suffered from depression following her family’s financial collapse. The Weekly attempted to contact the surviving Medders children without success.
Melugin said the bankruptcy didn’t affect his former mother-in-law’s grandiose ways. For example, his and Cathy’s wedding took place just as the Medderses’ problems were coming to light. Despite all the allegations about having taken the nuns for a couple of million dollars, Margaret was still able to convince the bishop of the Fort Worth diocese to perform the service.
Ernest and Margaret moved to Gainesville for a short time, then relocated to a country club estate in Brownsville. Where did they get the money? No one in the family is sure. But in the words of Margaret following one bankruptcy hearing, “We’re not destitute.”
Steve Riggs, 44, the son of Gene and Candice Riggs, recalls times when his family would help support his grandmother’s continuing delusions of grandeur, even when his parents barely had enough to live on.
“We were living in this little house, and Mom and Dad would say, ‘We’re going to visit Grandma at the Fairmont Hotel,’ ” recalled Riggs. “And she would tell you these fantastic stories. And if you got a present from Grandma, you never knew if you were going to get to keep it. But she was an interesting person.”
Ernest Medders died in Brownsville in 1975 from an apparent heart attack, and Margaret lived on in her fantasy world. Melugin recalled Margaret flying into Denton once while he and Cathy lived there. She was with a man whom she was trying to talk into joining a coal-mining venture.
On another occasion, Melugin said, Margaret entertained actor Chill Wills, who was interested in making a movie about the Medderses, in which he would play Ernest. Melugin said that Margaret had already slapped a Paramount Studios bumper sticker on the Cadillac that she still had. “But Margaret didn’t like that idea. She thought Robert Mitchum should have the role of Ernest.”
Hollywood also came calling in the person of small-time producer Sol Fielding. But during a trip to Los Angeles to meet with Fielding, Margaret was accused of stealing an American Express card, which she then used to pay her and Fielding’s hotel expenses around the country.
Those charges were eventually dropped. But Margaret’s luck finally ran out in 1976 when she was accused of stiffing the Fairmont Hotel in Dallas on a $16,000 bill. Since she had already pleaded guilty and received probation for yet a third hot check charge, this time Margaret was sentenced to five years in prison.
In her usual fashion, Margaret made the best of the situation. She began writing a prison newsletter. Somehow the publication came to the attention of a prisoner in Louisiana, former Baptist preacher Nathan Orr, who had been convicted of killing his wife while he was intoxicated.
The two started exchanging letters while they were still incarcerated. Shortly after both were released in 1979, the two penitentiary pen pals married. When Nathan died in 2002 one day shy of his 69th birthday, he was buried in the family plot with Ernest at Sacred Heart Cemetery.
The house in Muenster is now owned by another family. Most of “Colonial Acres” has been sold off.
Sister Rose Agnes, historian for the Poor Sisters in Mishawaka, told the Weekly that she was unfamiliar with the Medders scandal. So did spokespersons for the Catholic dioceses of both Fort Wayne-South Bend, which oversees the Poor Sisters, and Memphis, where the nuns operated St. Joseph’s Hospital. That hospital, one of a half-dozen that the Sisters operated, no longer exists, having been absorbed by a Baptist healthcare system in 1997. And there’s no mention of the Medderses in a history of the order written by a nun and published in 2009.
This past January, following a brief, low-key service at a Muenster funeral home, Margaret Medders joined Ernest and Nathan and two of the children in the cemetery. There was no mass.
Author, journalist, and former altar boy Steve McVicker lives in Houston. The Medderses are the focus of his next book.