Dixon v. Hesper Coal & Coke Co.
| Decision Date | 17 November 1925 |
| Docket Number | 5278. |
| Citation | 130 S.E. 663,100 W.Va. 422 |
| Parties | DIXON ET AL. v. HESPER COAL & COKE CO. ET AL. |
| Court | West Virginia Supreme Court |
Submitted November 3, 1925.
Syllabus by the Court.
Errors not affecting the rights of a lienholder, who is the sole appellant in a general creditors' suit, will not be noticed on his appeal.
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.
Process against a corporation, executed on the wife of an agent, is invalid.
The return of service of process on a corporation must show where, when, and upon whom it was served.
The jurisdiction of the court, whether over the person or the subject-matter, must affirmatively appear from the record.
Point 11 of the syllabus in Tavenner v. Barrett, 21 W.Va 656, point 1 of the syllabus in Armstrong v Painter, 75 W.Va. 393, 83 S.E. 1027, point 10 of the syllabus in Blumberg v. King, 98 W.Va. 275, 127 S.E 47, and the syllabus in West Virginia Utilities Co. v Dura Glass Co. (W. Va.) 128 S.E. 86 (advance sheets) applied.
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.
The Hesper Coal & 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 & Coke Company another large one. It borrowed $16,500 in 1922 from the Bellaire Realty Mortgage Company, to secure which it attempted to execute a deed of trust on its property. On October 31, 1923, it purported to convey all of its property, both real and personal, to the Mansfield Coal Corporation for $240,000, which corporation on the same day conveyed the property to O. L. McDonald, trustee, to secure to the Hesper Company the payment of the purchase price. It appears that the Mansfield Corporation and the Hesper Company were owned by the same stockholders, and that the conveyance was simply a scheme to finance the Hesper Company. About the date of the conveyance the Hesper Company ceased operation without paying its employees. On December 3, 1923, the plaintiffs, who had been in the employment of the Hesper Company, instituted this suit in the circuit court of said county against the Hesper Company and the Mansfield Corporation to recover their unpaid wages. Representation having been made to the court that the Hesper Company had abandoned its plant, with no one in charge, a special receiver was appointed by the court on February 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 Company. It was also alleged that the Mansfield Corporation was insolvent except for the property conveyed to it by the Hesper Company 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 August 30, 1924, to which several exceptions were taken by the West Virginia Supply Company and other claimants. A petition was filed by the Supply Company some time pending the proceedings before the commissioner, setting up a claim against the Hesper Company, and praying that the property of the coal company be sold, and the proceeds applied to its debts, etc. The Hesper Company filed an answer on September 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 October 11, 1924, confirming the report as corrected. This decree found that, at the time of the conveyance from the Hesper Company to the Mansfield Corporation, the former was insolvent, and the latter was without assets, that the conveyance was a fraud on the creditors of the Hesper Company, and that it (the conveyance) was accordingly set aside. The decree also annulled the deed of trust of the Mansfield Corporation to O. L. McDonald, trustee. In the decree many of the creditors of the Hesper Company and the priority of their claims were set forth, and it was adjudged that, unless the debts therein decreed were paid within 30 days, the property should be sold, etc.
The West Virginia Supply Company 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 Company. Points 1, 16, 17, 18, 20, 21, 22, 23, 24, 25, 28, and 29 relate to errors of which the Hesper Company and the Mansfield Corporation 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 Company and the Mansfield Corporation, and we can consider on this appeal only such errors as affect the former. 4 C.J. 692, par. 2594; City of Roanoke v. Blair, 107 Va. 639, 60 S.E. 75. 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, 83 S.E. 1027, 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 commissioner 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, 127 S.E. 47, 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 employees of the Hesper Company filed notices of their claims with the several amounts thereof properly sworn to. J. M. N. Downes testified before the commissioner that the Hesper Company had made no payments to its employees 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...
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