Murder At The Elite Hotel!

Kingsport’s First Gangland Slaying?

Blogspot has a feature that lets me see which of the posts on my blog are currently drawing readers. The top five are usually the five most recent posts. But last week a post from ten years ago suddenly hit number one with a bullet. Literally a bullet, a murder story I wrote about ten years ago: the 1940 slaying in Kingsport’s ironically named Elite Hotel of a small-town girl from Indiana by her husband with a checkered past in Gangland Chicago.

I have no idea why Peggy Rice’s murder suddenly captured the attention of internet readers, and lots of them.

But for those who have never heard the story, it’s a doozie:

He came to Kingsport from Chicago in the thirties and opened Club Belvedere on the Johnson City Highway, a hotspot best known for the number of times it was raided by police.

She accompanied him here, a small town Indiana girl who had hooked up with this self described “racket man.” She was his fourth wife although she didn’t know it.

That would come out at his trial but she wasn’t there to hear it. She was dead.

On the night of March 10, 1940 he was found standing over her lifeless body, a smoking gun in his hand. Literally.

Her blood-splattered corpse was partially nude. The man in bed next to her was also nude. He was alive.

It happened in Room 4 of the appropriately named Elite Hotel at 132 East Main Street.

Had Peggy Rice been involved in what the newspaper delicately called the “eternal triangle?” Was her slaying at the hand of her much older husband Charlie a part of the “unwritten law,” as the newspaper suggested?

Or was it Kingsport’s first, and probably only gangland murder.

First the facts. The initial newspaper report said that “Mrs. Gladys ‘Peggy’ Henriott Rice, 26-year-old wife of Charles C. Rice, 43, well known former Kingsport night club operator and manager of the Kingsport branch of Tennessee Bonding Co., was fatally wounded about 7 p. m, yesterday in a Main Street hotel room.”

Rice and his wife’s lover, John Q. “Shorty” Rhea, 44, were arrested shortly after the slaying and bound over for first degree murder by Magistrate George E. Bradley.

But the story had an odd odor to it from the get-go. First, isn’t it generally the rival who is murdered? Rice didn’t fire a shot at the man he found in bed with his wife. But he shot her in the chest and calmly waited for the police to arrive. And second, there was Charlie’s background, as reported in a follow up story the next day, which also corrected Mrs. Rice’s age. She was now 30.

Rice admitted to the newspaper that he was a “racket man,” a common term for a gangster. “When questioned today regarding his connections in Illinois and Indiana, Rice said: ‘I know what you want with that. It’s that Jake Lingle case again. They tried to make me the payoff man in that case, but I was 4,000 miles away.’”

The newspaper explained parenthetically that Jake Lingle was a Chicago newspaperman who was killed in 1930, allegedly by Chicago gangsters “because he knew too much about the Chicago underworld.”

Rice said he had nothing to do with paying off Lingle’s convicted murderer Leo Brothers although he did admit he owned the Danville, Ill. hotel where the payoff took place. “I guess I still do.”

As for the slaying of his spouse, Rice claimed he had left her in Miami two weeks earlier and did not know she was back in town until the afternoon of the murder when he got a telephone call from an unknown woman. He told police he still didn’t believe his wife could be in a hotel room with another man until he opened the door and walked in on the couple. Of course he had conveniently brought along a .38 caliber pistol.

Mrs. Rice’s bedmate, “Shorty” Rhea, identified by the newspaper as the “alleged operator of the Hi-Hat Night Club,” said that he had gone to Mrs. Rice’s room about 4 p.m. after she telephoned him to bring her two bottles of beer. “’I had known her for quite a while,’ Rhea said, ‘and when I took the beer to her room I stayed to talk with her. After a while I got sleepy and lay down on the bed for a nap.’”

Sometime in the interim they both apparently removed their clothes, Mrs. Rice hanging her dress and fur coat neatly in the closet.

Shorty said he was awakened sometime later when Mrs. Rice shouted, “‘There's Charlie!’ I looked up and Charlie was standing at the foot of the bed. ‘Don't either of you move or I'll kill both of you,’ Rhea quoted Rice as saying.”

According to Rhea, the three talked for about twenty minutes, then Rice stood up, shot his wife, and refused to call an ambulance because “she isn’t hurt much.”

She was dead when an ambulance arrived.

Trial began in Sullivan County Circuit Court on Friday May 24, 1940 with Judge Shelburne Ferguson presiding. Rice was represented by T.R. Bandy, Shorty Rhea by John R. Todd. It was a short proceeding, a day and a half. Rice claimed on the stand that the gun accidentally discharged when his wife lunged for it. Police testified neither Rice nor Rhea made any mention of the pistol firing accidentally when they were arrested. Rice also admitted that Peggy Rice was his fourth wife, although he didn’t count the third because they had never lived together.

After two hours of deliberations the Blountville jury returned a verdict of guilty of involuntary manslaughter, apparently believing the accidental shooting story, and sentenced Charles C. Rice to two years in prison. Rhea was acquitted.

Rice served eighteen months in the Tennessee State Prison in Nashville before returning to Kingsport, where he got in trouble again a year later for running a bootlegging operation at Circle Court Cottages, formerly the Hi-Hat Club, at the Upper Circle where Warpath intersects with Memorial Boulevard. He left Kingsport for good soon after.

In 1970 Times News reporter Bob Smith found Rice in Florida, where he owned a restaurant, a fleet of shrimp boats, a trailer park, a fishing dock and a hotel, from all appearances a successful businessman. Smith found Rice because he was in trouble, again, this time for swearing he was a U.S. citizen when in fact he had been born in Poland.

Charlie Rice died in Houston Texas in 1974. He left behind wife number five, or six, or who knows, and “several children.”