Sidney C. Smith Corp. v. Dailey

67 S.E.2d 523, 136 W. Va. 380, 1951 W. Va. LEXIS 32
CourtWest Virginia Supreme Court
DecidedNovember 20, 1951
Docket10425
StatusPublished
Cited by35 cases

This text of 67 S.E.2d 523 (Sidney C. Smith Corp. v. Dailey) 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
Sidney C. Smith Corp. v. Dailey, 67 S.E.2d 523, 136 W. Va. 380, 1951 W. Va. LEXIS 32 (W. Va. 1951).

Opinion

Lovtns, Judge:

This Court granted a rule in prohibition on the petition of Sidney C. Smith Corporation, Contractors’ Supply Corporation, Sidney C. Smith, Sr., and Sidney C. Smith, Jr., who seek a writ prohibiting Honorable A. Jerome Dailey, Judge of the Circuit Court of Randolph County, Atlas Engineering Company, Sam. G. Polino, A. R. Steele, and James Polino, respondents, from proceeding further in an action of assumpsit now pending in that court wherein it is charged that petitioners in this case breached a written contract. The writ of prohibition is sought on the ground that the circuit court has no jurisdiction .to hear and determine the action of assumpsit.

Atlas Engineering Company, Sam. G. Polino, A. R. Steele, and James Polino are plaintiffs in the action of assumpsit, and the petitioners and A. R. Steele, Trustee, are defendants therein.

Since the controversy in the action of assumpsit as well as this prohibition proceeding exists between Smith and his co-litigants and Polino and his co-litigants, they will be hereinafter so designated without regard to the position they occupy in the action of assumpsit and in this proceeding.

The corporations which are defendants in the action of' assumpsit are West Virginia corporations with their principal offices and places of business in Wheeling, Ohio' *382 County, West Virginia. The individual defendants are residents of Wheeling. Service of process was had on all defendants except A. R. Steele, Trustee, in Ohio County. The corporate plaintiff in the action of assump-sit is a West Virginia corporation with its principal office and place of business in Elkins, Randolph County, West Virginia. The individual plaintiffs are residents of El-kins.

Smith and his co-litigants filed a plea in abatement challenging the jurisdiction of the Circuit Court of Randolph County of the action in assumpsit on the grounds that neither the cause of action, nor any part thereof, arose in Randolph County; that none of the defendants, with the exception of A. R. Steele, Trustee, had their principal offices or residences in Randolph County at the time the action was brought; and that the joinder of A. R. Steele, Trustee, in the action of assumpsit was colorable and was made in an attempt to confer jurisdiction where none otherwise existed.

The plea was timely filed, and, after hearing proof on the issues of fact arising on such plea and the general and special replications filed by Polino and his co-litigants, the trial court ruled that it had jurisdiction. Defendants were given permission to file other pleadings.

The written contract allegedly breached bears date on the 15th day of April, 1949, and was entered into by Sam G. Polino, A. R. Steele, and James Polino, of the first part, and Sidney C. Smith, Sr., and Sidney C. Smith, Jr., of the second part. The contract is set forth in haec verba in the second count of the declaration filed in the action of assumpsit. The contract was signed and acknowledged in Elkins, West Virginia, by the parties thereto and was subsequently ratified by the corporate plaintiff and the corporate defendants by appropriate resolutions.

The Atlas Engineering Company will be hereinafter designated as “Atlas”, Contractors’ Supply Corporation will be hereinafter designated as “Contractors”, and Coast Construction Corporation will be hereinafter des *383 ignated as “Coast”. After the signing of the contract, Coast was reorganized and renamed “Sidney C. Smith Corporation”, and will be hereinafter referred to as “Smith Corporation”. Smith Corporation succeeded to the rights and assumed the liabilities of Coast created by the contract.

At the time the contract was made, the Polinos and Steele owned sixty-four per cent of the capital stock of Atlas and the Smiths owned thirty-six per cent of such stock. Atlas owned the controlling interest in Coast and Contractors, the number of shares held by other stockholders being nominal. The intention of the parties to the contract was to separate the business affairs of Atlas, Coast and Contractors, and to effectuate a rearrangement of the ownership of the three corporations by placing the ownership of Coast and Contractors in the Smiths and the ownership of Atlas in the Polinos and Steele. According to the contract the parties were to cause Atlas to transfer the stock it owned in Coast and Contractors to the Smiths and the Smiths were to transfer the stock they owned in Atlas to the Polinos and Steele or to Atlas. There is no complaint that such transfers were not made.

It was agreed that immediately upon the execution of the contract, Coast should be vested with title to certain items of personal property listed therein. Other personal property then owned and used by Coast and Atlas, with certain exceptions, was to become the property of Atlas. Certain real estate situate in Ohio County, West Virginia, owned by Atlas, was to be conveyed to Coast.

The contract further provided that the three corporations would cooperate in defense of a claim asserted against them by Robert Richey, and, in the event of an adverse outcome of any proceeding to enforce the claim, any sum awarded Richey up to $8,000 would be paid by Atlas; but if the sum exceeded $8,000, Atlas would pay sixty-four per cent of the excess and Coast and Contractors would pay thirty-six per cent thereof.

Another provision of the contract was to the effect that Coast and Contractors would each pay certain percent *384 ages of the aggregate corporate income taxes assessed against the three companies for the year 1948 and prior years. Each corporation, however, was to pay its own income tax for the year 1949.

Other provisions in the contract provided for corporate reorganizations.

All cash, notes, and accounts receivable then in possession of Coast were to be treated as assets derived from four contracts then in process of execution and were to be placed in the custody of A. R. Steele. The money so held by Steele was to be deposited in a separate bank account under the control of Steele. Thereafter, Atlas was to receive all the profits from the four contracts, after deducting overhead costs and expenses of operation, and all money and assets derived from the four projects were 'to be turned over to Steele. Polino and his co-litigants alleged in the declaration performance of the contract on their part. It is alleged, however, that the defendants have breached the contract in variant particulars, principally by failing to deliver personal property belonging to Atlas and failing to pay over money received by Smith and his co-litigants but rightfully due Polino and his co-litigants under the provisions of the contract. It is alleged that Smith and his co-litigants have failed and refused to endorse checks payable to the defendants, the proceeds of such checks, when realized, being the sole property of Atlas.

The declaration further charges thát Smith and his co-litigants have refused to pay certain debts and obligations due Polino and his co-litigants. The declaration avers that Smith and his co-litigants have received various and sundry sums of money and converted the same to their own use though such money rightfully belonged to Polino and his co-litigants. The plaintiffs claim damages in the action of assumpsit in the sum of $41,402.51.

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Bluebook (online)
67 S.E.2d 523, 136 W. Va. 380, 1951 W. Va. LEXIS 32, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sidney-c-smith-corp-v-dailey-wva-1951.