Nicholas Land Co. v. Crowder.

• Decision Date: 14 November 1944
• Docket Number: (CC 693)
• Citation: 127 W.Va. 216
• Court: West Virginia Supreme Court
• Parties: Nicholas Land Company v. Maude Crowder et al.

127 W.Va. 216

Nicholas Land Company

v.Maude Crowder et al.

(CC 693)

Supreme Court of Appeals of West Virginia.

Submitted October 3, 1944.

Decided November 14, 1944.

1. Process-

A summons which is not signed by the clerk or deputy clerk of the court from which it emanates is voidable, and in the absence of timely avoidance thereof a decree by default based thereon is not subject to collateral attack.

2. Process-

A writ commencing a suit must be issued by the clerk or deputy clerk of the court wherein the suit is instituted and a process not so issued is void.

3. Constitutional Law-

Although the Auditor of the State of West Virginia, for the purpose of accepting service of process, represents all domestic corporations and foreign corporations doing business therein, nevertheless where it is his specific statutory duty to collect a debt due the State of West Virginia from a corporation so represented, his interest is antagonistic to that of the corporation and he cannot accept service of process commencing a suit to compel payment of such debt, notwithstanding the provisions of Code, 31-1-71. Such acceptance does not constitute due process of law, as required by the Fourteenth Amendment to the Constitution of the United States and Article iii, Section 10 of the Constitution of West Virginia, and is therefore void.

Kenna, Judge, absent.

Certified from Circuit Court, Nicholas County.

Suit in equity by the Nicholas Land Company against Maude Crowder and another to set aside three deeds as clouds on plaintiff's title to certain lands. The trial court sustained demurrers to plaintiff's original and amended and supplemental bills of complaint and certified to the Supreme Court of Appeals nine questions arising on such rulings.

Reversed.

D. W. Taylor and Brooks B. Callaghan, for plaintiff. G. Dana Herold and Mahan, Bacon & White, for defendants.

Lovins, Judge:

Nicholas Land Company, a corporation, instituted this suit against Maude Crowder and L. F. Herold to set aside three deeds of conveyance as clouds on plaintiff's title to certain lands situate in Nicholas County, West Virginia. The trial court sustained demurrers to plaintiff's original and its amended and supplemental bills of complaint, and of its own motion certified to this Court nine questions arising on the rulings so made.

According to plaintiff's bills of complaint the material facts on which it relies for relief are as follows: Plaintiff is a domestic corporation whose charter was granted on May 18, 1931. On the following day it acquired title to 105 acres of land in fee, except oil and gas, and also title to five other tracts of coal and mining rights having a fair market value of $30,000.00.

The Attorney General of the State of West Virginia, or some other official of the State, caused a paper to be printed bearing date August 11, 1936, in the form of a writ commencing a suit in the Circuit Court of Kanawha County, West Virginia. The paper was neither subscribed nor issued by the Clerk of the Circuit Court of Kanawha County, but the name of that official was printed thereon at the place where a signature is usually subscribed. The paper contained a command that the Sheriff of Kanawha County summon Nicholas Land Company and four hundred twenty-six other corporations, domestic and foreign, to answer a bill in chancery of the State of West Virginia. No service was made by the sheriff. Instead of such service, words purporting to be an acceptance of service by the Auditor of the State of West Virginia were printed on the paper, to which a printed facsimile signature of the auditor was appended.

The State's bill of complaint, filed at September Rules, 1936, alleged, inter alia, that Nicholas Land Company owed the sum of $25.00 as corporation license tax for the year beginning July 1, 1935. The bill was taken for confessed at October Rules, 1936, and the cause was set for hearing as to Nicholas Land Company and others. The next regular term of the Circuit Court of Kanawha County commenced on the second Monday in January, 1937. Notwithstanding that the suit was not matured for hearing, the Circuit Court of Kanawha County on November 16, 1936, entered a decree which adjudged that the State of West Virginia recover from Nicholas Land Company the sum of $25.00 and a proportionate share of the costs of the suit; and that the charter rights and franchises of said company be forfeited. Said decree also appointed, without notice of application therefor, a special receiver of the corporate assets, including the real estate, and directed the special receiver to convert the property of Nicholas Land Company into cash, subject to the court's approval.

No other proceedings affecting Nicholas Land Company were had until August 15, 1939, at which time the special receiver reported that after investigation he was unable to discover any assets of value belonging to it, other than the lands and interests therein heretofore mentioned; that they were of little value; that he had been offered an amount sufficient to pay the judgment of $25.00 aforesaid and a proportionate part of the costs of this suit; and that the amount offered was an adequate price. On the same day the foregoing report was filed, the Circuit Court of Kanawha County entered a decree in which the court filed and approved said report, found that no liens or encumbrances existed against Nicholas Land Company or its assets other than the judgment in favor of the State of West Virginia, that said judgment was a lien on all the property of Nicholas Land Company prior to any liens other than those for State, county and district taxes, and the costs of this suit, and adjudged the costs chargeable against Nicholas Land Company as $100.00. By the same decree the court found the value of the land to be less than five hundred dollars and decreed that, unless Nicholas Land Company pay the lien debt so adjudicated before August 17, 1939, the special receiver sell, without advertisement, all of the land and mining rights hereinbefore mentioned, and ordered that the special receiver pay first the costs and expenses of the suit and next the lien of the State's decretal judgment.

On August 17, 1939, the special receiver reported that he had made private sale of said land and mining rights to H. W. Crowder for the sum of $125.00, recommended that said sale be confirmed, and that the proceeds thereof be applied to the payment of the amount of costs chargeable to Nicholas Land Company, amounting to $100.00, and that the residue of said proceeds be applied to the payment of the decretal judgment in favor of the State of West Virginia.

The Circuit Court of Kanawha County, by a decree entered the same day, confirmed the last-mentioned report and the sale reported therein, directed that the special receiver execute and deliver to the purchaser a deed of conveyance; and ordered the distribution of the proceeds of the sale in accordance with such report. The special receiver made a final report on August 17, 1939, showing disbursements of the proceeds of sale according to the decree last mentioned, and, by a final decree entered on that day, the court confirmed said final report and retired the cause from its docket as to Nicholas Land Company.

H. W. Crowder, the purchaser, died intestate on or about November 28, 1939, survived by four children, his heirs at law, and his widow, Maude Crowder, one of the defendants in this suit. By deed bearing date December 22, 1939, the four heirs at law conveyed all their interest in said lands and rights to Maude Crowder, the widow, who, by deed bearing date April 14, 1943, conveyed an undivided onethird interest therein to L. F. Herold, the other defendant in this suit.

Plaintiff in this suit avers on information and belief that it had no notice of the pendency of the suit in Kanawha County, which was instituted under authority of Code, 11-12-77.

Nicholas Land Company prays that the three deeds of conveyance above mentioned be set aside, contending that all the decrees entered by the Circuit Court of Kanawha County are void.

The questions certified by the Circuit Court of Nicholas County in substance are as follows:

(1) Whether the Nicholas Land Company now has the capacity to maintain this suit, and, if so, do its bills of complaint allege sufficient facts to entitle it to equitable relief?

(2) Was the writ commencing the suit in Kanawha County legally signed, issued, and served on Nicholas Land Company, and, if not, are the decrees pronounced in that suit void?

(3) Was the appointment of the special receiver valid?

(4) Should the Circuit Court of Kanawha County have required the assets of Nicholas Land Company to be marshaled and its creditors and stockholders convened before entering the decrees of sale and ordering a distribution of its assets?

(5) Did the sale of Nicholas Land Company's property without advertisement pass a valid title thereto?

For reasons to be stated herein, it is unnecessary to discuss or resolve questions 3, 4, and 5 set forth above.

If the plaintiff has no right to maintain this suit all other questions certified are academic and require neither discussion nor answer. If no writ commencing the suit in the Circuit Court of Kanawha County was issued and served on Nicholas Land Company, its corporate capacity was not impaired by any decree entered in that suit. Nicholas Land Company has sufficient corporate capacity to maintain the present suit, it being here asserted...