Swabthmore Lumber Co v. Parks

Decision Date17 June 1913
Citation72 W. Va. 625,79 S.E. 723
CourtWest Virginia Supreme Court
PartiesSWABTHMORE LUMBER CO. v. PARKS.

(Syllabus by the Court.)

1. Equity (§, 11*)—Jurisdiction.

A court of equity will not take cognizance of a fraud, working injury as a mere tort.

[Ed. Note.—For other cases, see Equity, Cent. Dig. §§ 21, 23, 24; Dec. Dig. § 11.*]

2. Contracts (§ 324*)—Breach of Contract —Remedy in Equity.

For breaches of contract, cognizable at law, there is no jurisdiction in equity to give redress by way of compensation or damages, if the bill has no object or purpose other than recovery of such compensation or damages.

[Ed. Note.—For other cases, see Contracts, Cent. Dig. §§ 1549-1557; Dec. Dig. § 324.*]

3. Equity (§ 26*) — Jurisdiction — Actions Ex Delicto.

Chapter 106 of the Code of 1906, authorizing attachments in equity, confers upon courts of equity no jurisdiction as to causes of action ex delicto.

[Ed. Note.—For other cases, see Equity, Cent. Dig. §| 86, 87; Dec. Dig. § 26.*]

4. Corporations (§ 448*)—Right of Action —Breach of Contract with Promoter.

A corporation does not succeed, to the right of action of one of its promoters against his agent for breach of the contract of agency, antedating the existence of the corporation and complete in all respects before the date of its organization, in the absence of an express assignment thereof.

[Ed. Note.—For other cases, see Corporations, Cent. Dig. 1709, 1789-1792; Dec. Dig. § 448.*]

Appeal from Circuit Court, Randolph County.

Bill by the Swarthmore Lumber Company against J. F. Parks. From a decree of dismissal, plaintiff appeals. Affirmed.

Taylor & Allen and W. B. & E. L. Maxwell, all of Elkins, for appellant.

Blue & Dayton, of Philippi, and Harding & Harding, of Elkins, for appellee.

POFFENBARGER, P. The bill in this cause, dismissal of which for want of equity is complained of, proceeds upon two theories of right of recovery, a contractual relation between the parties in connection with which the defendant perpetrated a fraud, and a fraud on his part independent of such relation, working injury to the plaintiff. At the institution of the suit, an attachment, based upon fraud in the incurrence of the alleged liability, was sued out.

The fraudulent act complained of in the bill and set up in the affidavit for the attachment was a misrepresentation on the part of the defendant, an estimator of timber, as to the quantity of timber on a large tract of land of which the plaintiff became the owner. He was employed to make the estimate before the purchase was made, but not by the plaintiff. It is a corporation organized shortly after he made his reportas to the quantity of timber. J. G. Rouse, a promotor of the plaintiff corporation, procured the estimate to be made in the month of January, 1907. Having in view or contemplation the purchase of about 4, 000 acres of timber land and a sawmill and other property from one J. Scott Bell, who represented the quantity of timber on the land to be more than 40, 000, 000 feet, Rouse, through one Capt. W. H. Cobb, employed the defendant to go upon the land and estimate the timber. Parks began his estimation about January 1st, and made his report on January 8, 1907, showing 39, 000, 000 feet of spruce and hemlock, 1, 000, 000 feet of bass wood, and 1, 000, 000 feet of other kinds of timber, making a total of 41, 000, 000. On the faith of this report and Bell's representation, Rouse, on the 12th day of January, 1907, entered into a contract with Bell for the purchase of the property at the price of $162,831. By this contract, Bell bound himself to execute a deed on February 1, 1907, or immediately thereafter, to Rouse, or some one designated by him. In pursuance thereof, the deed was executed on January 30, 1907, to Albert A. Blakeney, as agent for the Swarthmore Lumber Company, the plaintiff corporation, which had not yet been organized or chartered. Rouse represented some undisclosed associates. On the 29th day of January, 1907, the interested parties held a meeting, and they decided definitely to organize a corporation to take over the property. Pursuant to this agreement, they entered into a formal one for incorporation, on the 20th day of February, 1907, and the certificate of incorporation issued by the Secretary of State bears date February 23, 1907. In the meantime, the contract with Bell was consummated in the following manner: Rouse had made a $5,000 cash payment, and on the 30th day of January, 1907, a deed in which Bell is described as the party of the first part, Rouse as the party of the second part, and the Swarthmore Lumber Company as the party of the third part, was executed. It recited payment by Rouse of $5,000, and stipulated for an additional payment of $79,500 by the party of the third part on or before the delivery of the deed, as well as the execution of seven notes for $5,-000 each and one for $4,165.50, all to bear date January 12, 1907. This deed was acknowledged February 1, 1907, and on the next day delivered to the clerk of the county court of the county for record, all of which indicates payment of the purchase money of the property in the name of the Swarthmore Lumber Company before the date of its organization.

The allegations of the bill, sustained by proof, show that, after its organization, the plaintiff corporation took charge of the property, operated the mill for a time, cut and manufactured some of the timber, and ascertained the existence of a very large short age in the estimated quantity, about 16, 000,-000 feet, and the plaintiff claims to have been injured and damaged by the defendant's false representation as to the quantity of timber to the extent of $48,000, 16, 000,-000 feet at the price of $3 per thousand. In September, 1908, it sued Bell In equity in the common pleas court of Erie county, Pa., to enjoin the collection of a balance due on the purchase-money notes, amounting to $39,-166.50, and for such other relief as it was entitled to have upon the facts and circumstances stated in the bill. The injunction granted thereon was afterwards dissolved, and the suit dismissed in consequence of a settlement of the matters in difference between the parties by an agreement.

Treating Bell and Parks as joint wrongdoers, the plaintiff claimed the right to recover from the latter as damages said sum of $48,000. It also claims alternatively right of recovery of such sum from him, by virtue of his contract with Rouse, as damages for violation of its obligation by perpetration of the alleged...

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