84 W. Va. 382 | W. Va. | 1919
This is a suit for specific performance of a contract for the sale and purchase of a lot of land valuable for oil and gas. The case as now presented has two, hut not wholly independent branches. In the first, the circuit court by order entered in the cause on October 9, 1918, on motion of plaintiffs, and upon the
Subsequently, by order entered on Januaiy 17, 1919, while the cause was pending here on appeal, the court below permitted the plaintiffs to withdraw their general replication to the answer of the Montgomery Gas Company to the original and amended bills, and to file some six several exceptions in writing thereto, but upon consideration thereof, the court by the same order overruled them; and thereupon on its own motion certified some nine questions or propositions of law, which the court conceived were thereby presented, with' its rulings thereon, to this court, pursuant to section 1 of chapter 135 of the Code. And this is the second branch of the case presented for our consideration.
On the hearing here a motion was mtc.rposed on behalf of the Montgomery Gas Company to dismiss the certified case on the. ground that the exceptions certified do not challenge the sufficiency of any summons or return of service, nor of any pleading, and therefore not properly certified under the statute, which limits our jurisdiction to that class of questions.
The material questions or issues tendered by the bills were whether the contract of sale and purchase of July 25, 1918, sued on, for the money and other consideration therein recited, alleged to have been made and executed by and on behalf of the Montgomery Gas Company by O. J. Henderson, President, and D. C. Smallridge, Secretary-Treasurer, and signed and sealed also by said Smallridge, S. S. Wallace, H. Lane and J. H. Burgess as directors, and constituting a majority of the board
The circumstances and facts surrounding the parties at the time of the making of said contract and deed alleged in the bills are not controverted by the answers of the Montgomery Gas Company, but the authority of Henderson, president, and of his codirectors to make said contract and to make, execute and deliver said deed in escrow or otherwise without the ratification of the stoekholdrs owning at least sixty percent of the capital stock of the corporation, is denied; but there is no denial that the officers and directors undertook on behalf of said corporation to enter into said contract and to make and deliver the deed substantially asl agreed. The denial isl want of authority given by law, statute, or holding out as alleged, so as to estop the corporation or stockholders. And it is alleged that .at an informal meeting of stockholders held on July 31,1918, at which the same officers and directors with a few other stockholders were present, in all representing 95,612 shares of the
The several exceptions interposed to these answers, certified here by the court below, do not point out any particular allegation or paragraph of the bills not responded to by the answers. "They amount to nothing more than general challenges of the ••sufficiency of the several paragraphs thereof, to put in issue the 'question of the corporate authority of the officers and directors to execute said contract and deed. As defendants’ counsel '■•insist, they amount to nothing more than a demurrer to the ■answer, challenging their sufficiency in a law, not the proper, ■subject of exceptions, wherefore not properly certified to this court under section 1 of chapter 135 of the Code.
Strictly speaking there is no such thing as a demurrer to an answer in equity; and exceptions are only proper where it is conceived the answer is not responsive to some allegation, of the bill, and a better or more specific answer is desired and 'called for, or where it is desired to rid the answer of some ¿scandalous or impertinent matter. Richardson v. Donehoo, 16 W. Va. 685; Sandusky v. Faris, 49 W. Va. 150; 1 Barton’s Chancery Practice, §125; 1 Hogg’s Equity Procedure, §416; 1 Enc. Plead. & Prac. 895.
But while this is the general rule respecting exceptions, a rather loose practice seems to have grown up in this state and in Virginia, of allowing the sufficiency of an answer to be '¡¡presented by some general or specific exception thereto, having the effect of a demurrer. Blair v. Core; 20 W. Va. 265; Bennett v. Pierce, 45 W. Va. 654; Ward v. Ward’s Heirs, 50 W. Va. 517; Kelly v. Hamblen, 98 Va. 383. In the latter case, Where the point was not raised below, the Virginia court, by •Judge Keith, referring to this practice, says that he neither ¿approves nor condemns it,® but reserves it for further consideration. The third point of the syllabus, however, is: “An
In the Federal courts, agreeable to the English Chancery practice, the only way o.f testing the sufficiency of an answer on its merits as a defense to the case made by the bill, is to have the case set down for hearing on bill and answer Louisville & Nashville R. R. Co. v. Wright, 190 Fed Rep. 252, and cases cited. In Walker v. Jack, 88 Fed. Rep. 576, 577, one of the cases referred to, Judge Taft says: “The court seems to have treated the exception as if equivalent to a demurrer testing the sufficency of the averments of the answer as a defense to the bill on its merits. This was not according to proper equity practice. There is no such'thing as a demurrer to an answer in equity. Grether v. Cornell’s Exec’rs, 23 C. C. A. 498, 75 Fed. 742. The only way by which the sufficiency of an answer on its merits as a defense to the case made in the bill can be tested is by setting the case for hearing on bill ■and answer. The office of an exception is to raise the question whether the averments and denials of the answer are sufficiently responsive to the allegations of the-bill.” In Grether v. Wright, 23 C. C. A. 498, 75 Fed. 742, Judge Taft says; “The only way by which the sufficiency of an answer to the bill in equity can be tested is by setting the ease down for hearing upon bill and answer, the effect of which is an admission by the complainant of all the averments of fact properly pleaded in the answer and a waiver of any right to contest them by replication and proof;” citing Barry v. Albbot, 100 Mass. 396; There the demurrer was treated as an application to the court to set down the case on bill and answer, and upon appeal the decree was considered as if it had been entered upon that theory. But if such be the proper practice we need not regard it in the case at bar, for in our opinion the exceptions constitute such a challenge to the sufficiency of the answer ■as to justify certifying the questions, under section 1 of
On the other branch of the case the question is: Did the court err in appointing a special receiver? ¥e are of opinion that it did not and that the order of appointment should be affirmed. In the first place, the»contract and deed are alleged to have been, and purport on their face to have been executed, and the deed to have been acknowledged by and on behalf of the corporation, by the president and other officers by its authority duly given. The acknowledgment of the president to the deed, sworn to as the law requires, so attests. The verifications to the answers filed were made by the same officer who executed and swore to the acknowledgment to the deed. The authority of these officers to cancel the contract and deed is supported by no better evidence than their original authority to make and execute the same. It is alleged in these answers that the executive officers acted in good faith and as they thought for the best interest of the corporation, and with the belief and faith that their action would be ratified by corporate action. Yea more, notwithstanding the general denial of authority and -with knowledge of the only authority which these officers had, it is alleged that respondent in good faith did all that was required by the terms of the contract with the pur
We obesrve also by the admissions of the answers that on July 30, 1918, the last day, according to the contention of the defendant company, giving plaintiffs to comply with the contract by making the cash payment and execution and delivery of their note, counsel was employed for the company to notify them of their alleged default, and in a letter addressed to them, signed Montgomery Gas Company by L. Burke O’Neil, Attorney, there is not the slightest suggestion of want of authority of the officers to make the contract or deed, but on the contrary a recognition of their authority, representation of a compliance with a contract on the part of the company and failure on plaintiffs’ part to comply therewith, wherefore, and for no other reason, plaintiffs were notified that said contract had been canceled and rescinded, and the deed left in escrow with the bank recalled. Mr. O’Neal is counsel for defendants in this suit. If this notice was given with corporate authority, it amounted to °a recognition of the authority of the agents to make the contract and deed, not denial thereof. O’Neal’s authority is not denied by the answers. The first denial of authority to make the contract and deed, so far as the record shows, appeared in the answers to the bills in this cause.
To secure a reversal of the decree appointing a special receiver counsel for defendants appeal to the general rule recognized in Kanawha Coal Company v. Ballard & Welch Coal Company, 43 W. Va. 721, 732; Wilson v. Maddox, 46 W. Va. 641; Freer v. Davis, 52 W. Va. 35, 36; and Suit v. Hochsetter Oil Company, 63 W. Va. 317, 334, 335; that to justify such appointment plaintiff must show, either that he has a clear right to the property itself, to charge it with a lien, or that it constitutes
In the ease as presented, we are of opinion that the plaintiffs.have made out a clear prima- facie case of right to the property. True, the defendants, represented by the same officers who-executed the contract and deed, deny their authority in the premises, but no stockholder or other representative has done-so by answer in the cause; but a number of our decisions say that a corporation may be bound by its agents in the same-way that an individual may be bound, and that where a contract or deed regular on its face, under the seal of .the corporation is signed and acknowledged by its chief officers: and delivered to the grantee, authority on the part of the officers to make the instrument will be presumed, and that the burden is upon the corporation to show want of authority. Fidelity Co. v. Railroad Co., 32 W. Va. 224, 256-7; Ruffner Bros. v. Welton Coal & Salt Co., 36 W. Va. 244; Boyce v. Montauk Cas Co., 37 W. Va. 73; Deepwater Council v. Renick, 59 W. Va. 343, 346; Hartley v. Ault Woodenware Company, 82 W. Va. 780, 97 S. E. 137. Prima facie we must say plaintiffs have made out a clear case of right to the property, and besides the prima facie of the contract and deed, the admissions and prior and subsequent conduct of the agents and stockholders strongly tend to confirm the fact of general plenary power on the part of the officers executing the contract and deed involved here.
Standing then on these prima facie rights, with nothing shown to overcome them, is there not also evidence of fraud and conspiracy on the part of the same officers, directors and stockholders and the Columbia Carbon Company to deprive plaintiffs of their lawful rights ? It is admitted in the answers that almost immediately after, if not before, attempting to cancel the contract with plaintiffs and recall their deed, the same officers entered into the contract of sale and purchase
As a result of the foregoing considerations, we are of opinion to also affirm the decree below appointing the special receiver, and to remand the cause for further proceedings.
Affirmed