Baird-Gatzmer Corp. v. Henry Clay Coal Min. Co.

Decision Date23 November 1948
Docket NumberCase No. C. C. 739.
Citation50 S.E.2d 673,131 W.Va. 793
CourtWest Virginia Supreme Court

Syllabus by the Court.

1. Points 1 and 2 of syllabus in Nicholas Land Company v Crowder, 127 W.Va. 216, 32 S.E.2d 563, reaffirmed and applied.

2. The service of process on, or its acceptance by, the Auditor of this State, as statutory attorney in fact for domestic and foreign corporations, in a suit instituted by the State, at the instance of the Auditor, and for the purpose of assisting in the collection of annual charter license taxes payable to him in his official capacity, is void and of no effect; does not constitute due process of law, within the meaning of the XIV Amendment to the Constitution of the United States, and Section 10 of Article III of the Constitution of this State and all proceedings in such suit, based on such purported service or acceptance, are absolutely void.

3. Section 86-a of Chapter 145, Acts of the Legislature, 1945, does not prohibit the institution of a suit, subsequent to July 1, 1946, to set aside a decree in an earlier suit instituted to recover charter license taxes, and the sale and deed based thereon, where the process therein was accepted by the Auditor, and the sale was made and the deed executed subsequent to the effective date of said act. The said act applies only to sales made prior to its effective date.

4. The redemption of land from a sale thereof to the State for the non-payment of taxes, by a person claiming title to such land under a judicial sale, inures to the benefit of the true owner of the land, in the event such judicial sale should for any reason, be set aside and declared void.

5. 'A suit to remove cloud and quiet title is local in its nature, and the jurisdiction of the Court is determined by the situs of the land.' Tennant's Heirs v Fretts, 67 W.Va. 569, 68 S.E. 387, 29 L.R.A.,N.S., 625, 140 Am.St.Rep. 979.

Kump, Kump & Wooddell, and W. Holt Wooddell, all of Elkins, and Scherer, Bowers & File and W. H. File, all of Beckley, for plaintiff.

H. Gus Muntzing, of Moorefield, David E. Cuppett, Jr., of Petersburg, and Haymond Maxwell, Sr., of Clarksburg, for defendants.

FOX Judge.

This is a suit in chancery, in the Circuit Court of Grant County, of The Baird-Gatzmer Corporation, a corporation, against Henry Clay Coal Mining Company, a corporation, and others, in which the plaintiff seeks to have set aside certain deeds conveying approximately 5,256 acres of land, situated in Grant and Tucker Counties, the first of which was a deed from William T. Lively, Special Receiver, to Henry Clay Coal Mining Company, a corporation, dated February 16, 1946, and subsequent deeds for the same land, on grounds set up in the bill. There was a demurrer to the bill, which the trial court sustained, and certified certain questions involved in such decision to this Court. On May 17, 1948, on application of the plaintiff, we docketed the case for hearing on such certification.

According to the allegations of the bill, the plaintiff corporation was chartered by this State on May 2, 1934, and on June 9, 1934, there was conveyed to it, by W. T. O'Farrell, Special Commissioner, and Richard C. Bull, Trustee, tracts of 3,481, 1150, 335, 169 1/3, and 120 2/3 acres of land, aggregating 5,256 acres, situated in Grant and Tucker Counties, principally in Union District of Grant County, but, partly in Davis District of Tucker County. This deed was recorded in Grant County, and the land conveyed thereby appeared on the land book of that county for the year 1935. The taxes for the year 1935 were not paid, and the land was subsequently sold for nonpayment of said taxes, and purchased by the State of West Virginia, and not redeemed within the time required by law, and the title thereto became vested in the State of West Virginia, subject to the right of redemption, as provided by the statute then in force.

The bill further alleges that the plaintiff corporation did not pay the annual charter license taxes for the fiscal year beginning July, 1935, and its charter became subject to forfeiture under the provisions of Article 12 of Chapter 11 of the Code; that on August 11, 1936, a suit was instituted in the Circuit Court of Kanawha County against the plaintiff and numerous other delinquent domestic and foreign corporations to collect unpaid license taxes. That this suit was prosecuted in the name of the State v. Active Ad Sign Company, and others, including The Baird-Gatzmer Corporation; that process in the said cause was not issued from the office of the Clerk of the Circuit Court of Kanawha County, was not signed by the said clerk, or by any one for him, but was issued by some one not identified, on printed form, which included the printed signature of the clerk; that service of the said purported process was accepted by Edgar B. Sims, Auditor of the State of West Virginia, and statutory attorney in fact for the plaintiff corporation, on the 11th day of August, 1936, the date of its alleged issuance, and such process was made returnable to the September Rules, 1936, at which rules the bill was filed and there was a decree nisi; that at October Rules, 1936, the bill was taken for confessed by all defendants not appearing, including the plaintiff herein, and the cause would in natural course have been matured for hearing at the next term of the Circuit Court of said county which convened on the second Monday in January, 1937; that notwithstanding this situation, the said Circuit Court, on November 16, 1936, entered a decree in said cause against the plaintiff for the sum of $25.00, and its proportionate share of the costs of the suit, forfeited its charter, enjoined it from carrying on business as a corporation, and appointed William T. Lively its special receiver, with authority to convert its assets into cash for the purpose of paying its debts, and authorized him to take into his possession the property of the said corporation, and to sell the same at public or private sale.

Nothing more was done in the cause until February 11, 1946, a period of more than nine years. On that day W. T. Lively, special receiver, filed a report in writing to the effect that he could sell the assets of the plaintiff herein consisting solely of the 5,256 acres of land, aforesaid, for the sum of $310.32, the purchaser to assume payment of the property taxes thereon then unpaid, the alleged amount being several thousand dollars. In said report it was stated that the price at which the assets of the said corporation could be sold was less than five hundred dollars. The bill and exhibits in the cause show that plaintiff corporation paid for said property in June, 1934, the sum of $7,608.00. On this report the court ordered said sale made unless The Baird-Gatzmer Corporation, a corporation, should, on or before February 16, 1946, five days later, pay all liens against all said assets, and its proportionate share of the costs of the suit. The bill avers that the plaintiff had no notice of the existence of the said suit until after its property had been sold, and, therefore, the payment required by the order, aforesaid, was not made. On February 16, 1946, said special receiver reported the sale of the assets of the plaintiff corporation, consisting of the lands aforesaid, to the defendant, Henry Clay Coal Mining Company, a corporation, for the sum of $310.32, which was then paid to him, and the sale was confirmed on said day, and the purchase price was ordered to be distributed as follows: Costs, receiver's bond--$16.67; M. H. Hix, Clerk of the Circuit Court of Kanawha County--$15.15; Ira J. Partlow, Attorney General of the State--$10.00; Edgar B. Sims, State Auditor--$25.00; William T. Lively, Special Receiver, for preparing deed--$10.00; William T. Lively, Receiver's fees, etc.--$125.00; William T. Lively, investigation fee--$108.50; aggregating $310.32. On the same day an order was entered showing the distribution of the funds aforesaid, and a report of such disbursement was approved on the same day the sale, aforesaid, was confirmed, and the suit was dismissed as to The Baird-Gatzmer Corporation, the plaintiff herein. On the same date a deed was executed by the said special receiver conveying said land to Henry Clay Coal Mining Company.

Subsequent to the conveyance made to the Henry Clay Coal Mining Company, a corporation, the land conveyed thereby was redeemed by said corporation from the State of West Virginia, by the payment of the taxes for the year 1935, and subsequent years, to the State Auditor in the sum of $1,644.67, so that the total outlay of the Henry Clay Coal Mining Company, the purchaser of said land, was $1,954.94, which amount plaintiff herein offers to pay in the event it is granted the relief prayed for herein.

On April 2, 1946, the Henry Clay Coal Mining Company conveyed the said lands to one Alfred K. Althouse, who later conveyed the same to the Upper Elk and Potomac Coal Corporation, by deed dated January 3, 1947. It is alleged in the bill that Alfred K. Althouse was an officer of, and the principal stockholder in the Henry Clay Coal Mining Company, and the Upper Elk and Potomac Coal Corporation, and that said Althouse is the main party in interest, and, in effect, is the owner of the land conveyed, or the major portion thereof.

The bill in this cause was apparently filed at March Rules, 1947 and on April 1, 1947, defendants filed their joint demurrer, assigning twenty grounds therefor. It would serve no useful purpose to enumerate all of these grounds, but we think they may be summarized in stating them as follows: (1) That the plaintiff was without legal title to the property involved by reason of the fact...

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