Dixon. v. Coal

• Decision Date: 17 November 1925
• Docket Number: (No. 5278.)
• Citation: 100 W.Va. 422
• Parties: G. E. Dixon et al. v. Hesper Coal and Coke Co. et alWest Virginia Mine Supply Co.
• Court: West Virginia Supreme Court

100 W.Va. 422

G. E. Dixon et al.

v.Hesper Coal and Coke Co. et al , West Virginia Mine Supply Co.

(No. 5278.)

Supreme Court of Appeals of West Virginia.

Submitted November 3, 1925.

Decided November 17, 1925.

1. Appeal and Error Errors Not Affecting Rights of Sole Appellant Not Noticed.

Errors not affecting the rights of a lien holder, who is the sole appellant in a general creditor's suit, will not be noticed on his appeal, (p. 425.)

(Appeal and Error, 4 C. J. § 2594.)

2. Creditor's Suit No Priority Given Lien Acquired After Entry of Order Referring Cause to Commissioner to Convene Creditors and Report Debts.

In such suit, no priority will be given a lien acquired after the entry of an order referring the cause to a commissioner to convene the creditors and report the debts of the insolvent debtor, (p. 426.)

(Creditor's Suits, 15 C. J. § 184.)

3. Corporations Process Against Corporation, Executed on Wife of Agent, Held Invalid.

Process against a corporation, executed on the wife of an agent, is invalid, (p. 427.)

(Corporations, 14a C. J. § 2909 [Anno.].)

4. Same Return of Service of Process on Corporation Must Show Where, When, and Upon Whom it Was Served.

The return of service of process on a corporation must show where, when, and upon whom it was served, (p. 427.)

(Corporations, 14a C. J. § 2917.)

5. Courts Jurisdiction, Whether Over Person or Subject Matter, Must Affirmatively Appear From Record.

The jurisdiction of the court, whether over the person or the subject matter, must affirmatively appear from the record.

6. Syllabi in Prior Cases Applied.

Point 11 of the syllabus in Tavenner v. Barrett, 21 W. Va. 656; point I of the syllabus in Armstrong v. Painter, 75 W. Va. 393; point 10 of the syllabus in Blumberg v. King, 97 W. Va. 275, and the syllabus in West Virginia Utilities Co. V. Dura Class Co., 99 W. Va. 193, 128 S. E. 86, applied, (p. 425.)

(Courts, 15 C. J. § 158.)

(Note: Parenthetical references by Editors, C. J. Cyc. Not part of syllabi.)

Appeal from Circuit Court, Upshur County.

Suit by G. E. Dixon and others against the Hesper Coal & Coke Company and others, changed by an amended bill into a general creditors' suit. From a decree entered on a commissioner s report, confirming the report as corrected, the West Virginia Mine Supply Company, claimant, appeals.

Reversed and remanded.

Charles C. Scott and Strother & McDonald, for appellant. Charles C. Scott, for appellee Hesper Coal & Coke Co.

Hatcher, Judge:

The Hesper Coal and Coke Company was engaged in the

business of mining coal in Upshur County. It owned in fee two small tracts and held under lease from the West Virginia Coal and Coke Company another large one. It borrowed $16,500.00 in 1922 from the Bell aire Realty Mortgage Company, to secure which it attempted to execute a deed of trust on its property. On Oct. 31, 1923, it purported to convey all of its property both real and personal to the Mansfield Coal Corporation for $240,000.00, which corporation on the same day conveyed the property to O. L. McDonald, Trustee, to secure to the Hesper Co. the payment of the purchase price. It appears that the Mansfield Corp. and the Hesper Co. were owned by the same stockholders, and that the conveyance was simply a scheme to finance the Hesper Co. About the date of the conveyance the Hesper Co. ceased operation without paying its employes. On Dec. 3, 1923, the plaintiffs, who had been in the employment of the Hesper Co., instituted this suit in the circuit court of said county, against the Hesper Co. and the Mansfield Corp., to recover their unpaid wages. Representation having been made to the court that the Hesper Co. had abandoned its plant, with no one in charge, a special receiver was appointed by the court on Feb. 8, 1924, to care for the property. An amended bill was filed at March Rules, 1924, which changed the action into a general creditors suit. For some unexplained reason G. K. Crites, one of the original plaintiffs, was omitted from the amended bill. R. A. Tenney and Ray Light were added as plaintiffs, although the bill contained no allegation in regard to them. Additional defendants were named in the amended bill who were alleged to have liens on the property of the Hesper Co. It was also alleged that the Mansfield Corp. was insolvent except for the property conveyed to it by the Hesper Co. and some other companies, as part of the general scheme to finance all the companies. Upon process regularly had on all the defendants, and upon the bill and the amended bill taken for confessed, a decree was entered April 25, 1924, referring the cause to a commissioner, who was directed to convene the creditors and state the usual account taken in a creditors suit. The commissioner filed his report on Aug. 30, 1924, to which several exceptions were taken by the West Virginia Supply Company and their claimants. A petition was filed by the Supply Co. sometime pending the proceedings before the commissioner, setting up a claim against the Hesper Co. and praying that the property of the coal company be sold and the proceeds applied to its debts, etc. The Hesper Co. filed an answer on Sept, 30, 1924, making a general denial of practically all the material allegations in both of the bills.

Some of the exceptions taken to the commissioner's report were sustained by the circuit court and a decree was entered Oct. 11, 1924, confirming the report as corrected. This decree found that at the time of the conveyance from the Hesper Co. to the Mansfield Corp. the former was insolvent and the latter was without assets; that the conveyance was a fraud on the creditors of the Hesper Co.; and that it (the conveyance) was accordingly set aside. The decree also annuled the deed of trust of the Mansfield Corp. to 0. L. McDonald, Trustee. In the decree many of the creditors of the Hesper Co. and the priorities of their claims were set forth, and it was adjudged that unless the debts therein decreed were paid within thirty days, the property should be sold, etc.

The West Virginia Supply Co. is the sole appellant from this decree. Thirty-one points of error are assigned in a brief filed on behalf of the appellant and the Hesper Co. Points 1, 16, 17, 18, 20, 21, 22, 23, 24, 25, 28 and 29 relate to errors of which the Hesper Co. and the Mansfield Corp. could complain were they before this court, but which are no affair of the appellant. The interests of the appellant are antagonistic to those of the Hesper Co. and the Mansfield Corp. and we can consider on this appeal only such errors as affect the former. 4 C., 1. 692, par. 2594, City of Roanoke v. Blair, 107 Va. 639. Several of the assignments of error are general, several need not be considered in view of our disposition of the case, and the others may be grouped in two general classes. One of these classes attacks the proof of the claims allowed, and the other attacks their priority as fixed by the court.

Proof.

In Armstrong v. Painter, 75 W. Va. 393, it was held that lien creditors must appear and prove their claims, unless such claims had been established upon pleadings taken for confessed, and that the report of the commissipner should show such appearance and proof. The opinion in that case denied the authority of a commissioner or the court to allow as.against creditors, any lien not presented and proved, "however well satisfied of its existence they may be." It condemned as loose, and dangerous the practice of reporting all liens disclosed by the records of the clerk's office, whether presented or claimed. In Blumberg v. King, 98 W. Va. 275 it was specifically held that transcripts of judgments, without further evidence do not constitute sufficient proof of the amounts remaining due thereon. The record here discloses a compliance with the above rules in regard to only a few of the claims allowed. The plaintiffs and other employes of the Hesper Co. filed notices of their claims with the several amounts thereof properly sworn to. J. M. N. Downes testified before the commissioner that the Hesper Co. had made no payments to its employes since July 1923. This evidence was sufficient to establish the several amounts due on the claims of the laborers. Both W. L. Rohrbough and the appellant appeared before the commissioner and proved their respective claims. We find no appearance of, or proof by, any other claimants before the commissioner. The record is full of copies of judgments, abstracts of judgments, and executions, but, as pointed out by Judge Miller in the Blumberg case, further evidence was necessary to show the amounts remaining due on such claims at the time of their presentment to the commissioner.

Priority.

Preference in the payment of the claims in this case should be extended as follows:

1. Claims due the State.

2. Valid liens, subsisting before the labor liens attached, (in the order obtained).

3. Claims of the plaintiffs, {pro rata).

4. Claims of the laborers who were not plaintiffs' {pro rata).

5. Valid liens secured between the time the labor liens attached and the date of the reference to the commissioner, (in the order obtained).

6. All other claims, {pro rata).

Code, Ch. 74, Sec, 2, and Ch. 75, Sec. 19; Foley v. Ruley, 50 W. Va. 158; Clark v. Figgins, 31 W. Va. 156; Wallis v. Treakle, 27 Graft. 479.

Ordinarily no liens may be recovered after the appointment of a...