Miller v. Coal Co.
| Decision Date | 08 December 1888 |
| Parties | Miller v. Coal Co. |
| Court | West Virginia Supreme Court |
A private business corporation, duly chartered and organized under the laws of this State, which failed to wind up its business when the time fixed by its charter for its duration expired, but continued thereafter in its charter name to carry on its corporate business, may be sued in a court of law in its corporate name for a tort committed by it after its charter had expired.
In such case a plea that the charter of the corporation had expired, and that it had ceased to exist in law at the time the alleged cause of action arose, will be held bad, because it does not also aver that the corporation had wound up its business, and ceased to exist in fact as well as in law.
S. P. McCormick and P. J. Crogan for plaintiff in error.
J. W. Mason for defendant in error.
Action of trespass on the case, commenced December 29, 1886, in the Circuit Court of Preston county, by Elizabeth A. Miller, administratrix of Daniel Miller, deceased, against the Newburg Orrel Coal Company to recover damages under our statute from the defendant for its negligence resulting in an explosion in its coal-mine, whereby the plaintiff's intestate, an employee of the defendant, was killed.
The declaration avers that the defendant is an incorporated company, and the action is against it as such. The defendant filed a plea alleging that it was organized and became a body corporate on June 15, 1855, by virtue of an act of the general assembly of Virginia for the purpose of mining coal in Preston county and so continued for the period of twenty years or until June 15, 1875, when its charter expired, and all rights powers, and ability to create liabilities as such corporation ceased and determined; and that all its property and assets by operation of law passed into the hands of C. Oliver O'Donnel, Robert T. Baldwin, Alford Jenkins, John Stewart and Otho H. Williams, who composed the board of directors of the corporation then in office; and that at the time of committing the wrongs complained of in the plaintiff's declaration its power and ability to create any liability had ceased etc.
To this plea the plaintiff demurred, and also tendered a special replication in which she averred, that on June 15, 1875, and ever since that time the defendant continued to act and operate its coal-mine as such corporation; that it was so acting at the time of the injury complained of and is still so acting and holding itself out to the public; and that in fact it has never ceased its corporate business or parted with its property or closed up its affairs etc. This replication was, on the motion of the defendant, rejected, and the plaintiff excepted. The order then concludes as follows:
"And the court being of opinion that the said plea is sufficient in law, doth therefore consider that the demurrer be overruled; and the plaintiff not desiring to reply further, it is accordingly considered by the court that the plaintiff's writ be quashed, and that defendant recover from the plaintiff its costs.'"
To this judgment the plaintiff obtained this writ of error.
This judgment is peculiar, because the overruling of the demurrer to the plea did not dispose of the questions of fact presented by the plea as well as the declaration. It may, however, be considered that the plaintiff by declining to further reply to the plea, by general replication thereto or otherwise, abandoned his action, and thereby authorized its dismissal. As no question has been raised to this seeming irregularity, by any party, either in the assignment of error or the argument, we do not deem it necessary to do more than refer to it, for the reason that the judgment must be reversed upon another ground.
The important question to be determined in this case is, whether or not a duly incorporated and organized corporation, which continues its corporate business in its corporate name after the time fixed by its charter for its duration has expired, can be sued and made liable as a corporation de facto for a tort committed by it after the limit fixed by its charter had ex- pired. At common law, upon the death or dissolution of a corporation its real estate reverted to the grantors or donors, and its personal property escheated to the king, while the debts due to and from it were thereby extinguished, and all actions pending for or against it at the time abated. Rider v. Factory, 7 Leigh 154; Board v. Livesay, 6 W. Ya. 44; Mumma v. Potomac Co., 8 Pet. 281. But this doctrine had its origin when corporations were either municipal or ecclesiastical, and private business and commercial corporations were unknown.
Upon the dissolution of these old public corporations their real estate, which was usually acquired as a donation to public or pious uses, was held to revert, upon the cessation of the use to the donors, and their personal property to escheat to the king, for the want of owners. In these cases there were no stockholders or natural persons who were entitled, equitably or otherwise, to the assets of the deceased coporation, and as in the case of an individual dying without heirs, the personalty went to the king, but, to prevent the realty from escheating to the king, it was held to revert to the donor upon the theory that the grant, being made to corporation for a public or charitable use, was made only for its life. But this rule, so far as modern business and commercial corporations are concerned, has become practically obsolete. Its unjust operation upon the rights of creditors and stockholders has been generally prevented by statute, and in equity the assets of such a corporation, which represent, not the donations of the prince or its pious founder, but the contributions of its stockholders, are held, independent of statute, to constitute a trust-fund, into whosoever hands they may come, for the benefit of the creditors and stockholders. Curran v. Arkansas, 15 How. 304; Bacon v. Robertson 18 How. 480.
Very soon after Rider v. Factory, supra, was decided, and, according to a suggestion of the court in that case, the general assembly of Virginia, at its session of 1836-37, passed an act, which has ever since been in force. This statute, without material change, was incorprated in our Code of 1868, and has continued to be, and still is, in force in this State. It provides, in substance, that when a corporation shall expire or be dissolved, its property and assets shall, under the direc-tion of the board of directors then in office, or such receiver as may be appointed by the Circuit Court, be...
To continue reading
Request your trial