Morehead v. New River Power Co.

112 S.E. 571, 91 W. Va. 277, 1922 W. Va. LEXIS 120
CourtWest Virginia Supreme Court
DecidedMay 23, 1922
StatusPublished
Cited by4 cases

This text of 112 S.E. 571 (Morehead v. New River Power Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Morehead v. New River Power Co., 112 S.E. 571, 91 W. Va. 277, 1922 W. Va. LEXIS 120 (W. Va. 1922).

Opinion

POEEENBARGER, PRESIDENT:

This appeal has brought here for review a decree dismissing an amended bill in equity, on demurrers interposed thereto, and denying leave to the plaintiff to file á second amended-bill in the cause.

There is no material difference between the first and seeT ond amended bills, wherefore they need not be separately considered. Both are lengthy and each sets forth, with com siderable detail, a great many transactions which are alleged to be so interlaced and related as to make them relevant and material to what is said to be the main ones constituting" grounds of relief. The appellant seems to say the general object of the suit is enforcement of an alleged liability of the Virginian Power Company, a corporation, in the sum of $63,042.29, upon what may be deemed to be. alternate grounds: a contract beclouded, obscured and impeded by the character, number and variety of the instrumentalities used in the making thereof, and assets of other corporations, liable for the debt and received and concealed by the Virginian Power Company, as to which discovery is sought. Two- other corporations and certain individuals are made parties defendant, because they were connected with the transactions out of which the indebtedness arose and participated therein, and because they are alleged to have been mere instrumentalities used by the Virginian Power Company, in the execution of purposes which included the creation of the indebtedness. One of the other corporations is thei New River Power Company in whose name the debt was created or contracted, and the other, the Dominion Power Company in whose name a contract was made with the plaintiff, as executor of the will [280]*280of his father, and his mother, a devisee under said will, which it assigned to the New River Power Company. The individual defendants are officers, agents and direct and indirect •stockholders of the three corporations. These two contracts and their terms and purposes are stated in the bill, together with the history and relations of the three corporations above named and two or three others, as well as the relations of the individual defendants to all of said corporations. For the appellees, it is insisted that the bill sets up five distinct causes of action, three of which are equitable and the other two legal. Under these contentions, are based charges of misjoinder of parties and multifariousness which the court below sustained.

In 1908, J. Turner Moorehead, father of the plaintiff, owned a tract of land in Fayette County, containing 365 acres, and another tract in Raleigh and Summers Counties, containing 1200 acres, made up of 22 smaller tracts. They were located along the New River and had been acquired by their owner for water power sites. Sometime between 1908 and June 8, 1912, he died testate, leaving said properties to his widow and making the plaintiff, his son, the executor of his will. On June 8, 1912, the plaintiff and his mother granted to John J. Mott, his heirs, executors, administrators and assigns, an option to purchase said properties at the price of $200,000-00. On September 30, 1912, Mott assigned the option to the Dominion Power Company and that company gave the owners notice of its acceptance of the option, October 4, 1912, and thereby converted it into a contract. In the meantime, the Virginian Power Company, .had ,been organized and then had control of the stock of the Dominion Power Company, in furtherance of its plans to obtain control of all the water power sites in the New River valley, .-the Virginian Power Company caused the Dominion Power Company to assign and transfer the option and contract, to the New River Power Company, without the knowledge or consent of the plaintiff. A few days later, October 16, 1912, the Virginian Power Company paid or caused to be paid to the plaintiff and his mother $10,000.00 in cash, on account [281]*281of the purchase money, and caused the New River Power Company to accept a conveyance of the properties and to ■execute its notes for the balance of the purchase money, ■$190,000.00, and secure payment thereof by a deed of trust' on the property. On or about October 10,1913, the Virginian Power Company paid the first one of the notes given for deferred purchase money.

The defendant A. B. Leach of New York, a banker, individually and in connection with his banking firm, A. B. Leach and Company, was the organizer and promoter of the Virginian Power Company, and all of its alleged subsidiaries and dummies, and they were organized and used for the purpose above stated. The Virginian Power Company was made the dominant or parent concern. Everything of value and necessary to accomplishment of the main purpose was ultimately put into its hands. 'While the water power ■sites were held by its subsidiaries, without development of .any of them, it secured long time contracts from practically all of the consumers of electricity in the New River Valley, .•and having done so, it constructed a steam power plant. Having thus rendered competition practically impossible, it substantially abandoned the water power sites in the hands of its worthless subsidiaries. At least, that was the fate of the sites obtained from the plaintiff. On the second installment of deferred purchase money, the New River Power Company made default, at the instance of the Virginian Power Company, and, in 1915, the plaintiff, in a foreclosure suit brought in a federal court, caused the property to be sold .and the proceeds to be applied on the debt, and obtained a ■decree against the New River Power Company, for the balance remaining due, $63,042.29. On that decree, an execution was issued and returned unsatisfied, before the institution of this suit.

Prior to the date of the conveyance made to the New River Power Company, the vendors had no knowledge of its ■existence. The request made by A. B. Leach, for the conveyance to it was the first intimation to [282]*282tbem of its existence. Upon inquiry then made,the plaintiff was informed, tbe bill says: “That the organization. of the said New .River Power Company and the taking of title to said properties by such corporation was the method and plan that had been adopted by the said Leach and the said Virginian Power Company to carry out the development of the said properties, and that they, the .said Leach and the Virginian Power Company, were going to immediately develop one of said water power properties, namely the “Richmond Falls” site, and that even though the said, notes of the New River Power Company were not paid promptly at maturity and it were necessary for the said Mary E. Morehead and your orator to retake the said properties, under the deed of trust, that your orator and the said Mary E. Morehead would then acquire a developed or partially developed water power property.” It further alleges: “That as a result of such representations and believing and relying thereon, your orator and the said Mary E. Morehead were induced to and did in fact accept the notes of the said dummy- corporation, to wit the New River Power Company; that at such time neither your orator nor the said Mary E. Morehead had any knowledge or information concerning the existence of the various dummy corporations that were being used by the' said Leach and the said Virginian Power Company, in securing title to all the water power properties and sites in the New River Valley, and that your orator and the said Mary E.

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Bluebook (online)
112 S.E. 571, 91 W. Va. 277, 1922 W. Va. LEXIS 120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/morehead-v-new-river-power-co-wva-1922.