Lynchburg Colliery Co v. Gauley & E. Ry. Co

• Decision Date: 24 October 1922
• Docket Number: (C. C. No. 199.)
• Court: West Virginia Supreme Court
• Parties: LYNCHBURG COLLIERY CO. v. GAULEY & E. RY. CO.

114 S.E. 462

LYNCHBURG COLLIERY CO.

v.GAULEY & E. RY. CO.

(C. C. No. 199.)

Supreme Court of Appeals of West Virginia.

Oct. 24, 1922.

(Syllabus by the Court.)

Certified Questions from Circuit Court, Fayette County.

Action by the Lynchburg Colliery Company against the Gauley & Eastern Railway Company. On certified questions. Questions answered.

Hubard & Bacon, of Fayetteville, for plaintiff.

Leroy Allebach, of Charleston, and W. N. King, of Columbus, Ohio, for defendant.

MILLER, J. The action in this case is for damages alleged to have been sustained by plaintiff about March 13, 1918, to its lands, houses and other property situated upon and along the banks of the Gauley River in Fayette County, from the alleged unlawful conduct of the defendant when extending its line of railroad along the opposite side or bank of said river, in the months of July, August and September, 1917, by blasting and shooting from the cliffs along the said line of railroad and into the channel of said river large quantities of rock and other materials, so as to obstruct and change the natural flow of the waters therein, and in flood times causing the water in said river to be dam-mod up and to be cast over, upon and against plaintiff's land, houses and other property, and to wash the same away and to permanently damage and injure the same in the various ways particularly set out in the declaration, laying its damages at $50,000.00.

In the court below the defendant by special appearance suggested its dissolution and the surrender of its charter prior to the date of said suit, and moved the court to quash the original summons sued out of the clerk's office on June 4, 1021, served upon one Crider, a depot agent, on the same day, and the return thereto, and also the alias summons sued out on October 22, 1921, and served upon Leroy Allebach, the person appointed by said corporation pursuant to law to accept service of process for it, and the return of service thereon, upon the ground that the persons upon whom such summons had been served, since the dissolution of the corporation and the surrender of its charter, had ceased to be agents and attorney in fact to accept service of process for it, wherefore said writs and the returns thereon should be quashed.

And the said Allebach, as the record shows, also asked leave to file a special plea in writing in abatement of said suit, setting up the dissolution of said corporation and the surrender of its charter in the manner and form required by law, and averring that since said dissolution and surrender of its charter, defendant's property and assets had all been sold and the proceeds, after payment of all its known debts and liabilities, had been distributed to its stockholders.

The circuit court overruled the motions to quash the writs and returns and to dismiss the action, and sustained plaintiff's objection to the filing of said special plea, and has certified to us the questions presented thereby and the correctness of its rulings thereon.

It is conceded that at common law a corporation becomes defunct by the expiration of its charter or on the voluntary dissolution thereof and surrender of its charter and can not be sued at law. One of our decisions, Stiles v. Laurel Fork Oil & Coal Co., 47 W. Va. 838, 35 S. E. 986, seems to hold that, notwithstanding section 59, chapter 53 of our Code (sec. 2891), suits at law can not now be maintained against such defunct corporation, but that relief can be obtained only in equity, in the winding up of the affairs of the corporation, as provided in said statute. Said section provides:

"When a corporation shall expire or be dissolved, its property and assets shall, under the order and direction of the board of directors then in office, or of the receiver or receivers appointed for the purpose by such circuit court as is mentioned in the fifty-seventh section of this chapter, bo subject to the payment of the liabilities of the corporation, and the expenses of winding up its affairs; and the surplus, if any, then remaining, to distribution among the stockholders according to their respective interests, And suits may be brought, continued or defended, and the property, real or personal, of the corporation be conveyed or transferred under the common seal or otherwise, and all lawful acts be done, in the corporate name in like manner and with like effect as before such dissolution or expiration; but so far only as shall be necessary or proper for collecting the debts and claims due to the corporation, converting its property and assets into money, prosecuting and protecting its rights, enforcing its liabilities, and paying over and distributing its property and assets, or the proceeds thereof, to those entitled thereto."

The main object of the suit in the case of Stiles v. Laurel Fork Oil & Coal Company was for winding up the affairs of the defunct corporation. In that suit plaintiff appears to have sued out an attachment and levied it upon lands formerly owned by the corporation....