In October, 1872, a contract was entered into between the firm of Dewey, Vance & Co. and the West Fairmont Gas Coal Company, the terms of which are stated in a letter from the former to the president of the coal company, dated October 7, 1872, as follows: 'We beg to ratify our verbal agreement of October 4th, by which you are to deliver us until July, in 1873, an average of three cars of coke per day, at six cents per bushel of 41 pounds, we to settle for same by our note of 90 days from the first of each month for the previous month's delivery.' This was acknowledged as an acceptance of a previous offer in identical terms by a letter from the president of the coal company to Dewey, Vance & Co. Under this contract the coal company were bound to deliver 681 car loads as ordered, equivalent to 424,944 bushels, which at the contract price would amount to $25,496.64. From the date of the contract to November 30, 1873, the coal company delivered in all 246 car-loads, which had been ordered, and were received and paid for according to the terms of the contract, the period during which deliveries were to have taken place having been extended by mutual consent. Dewey, Vance & Co. refusing to order or receive any more, the coal company, on January 17, 1877, brought an action at law against them in the circuit court of Ohio county, West Virginia, for damages for the breach of the contract. The defendants in that action caused it to be removed from the state court to the circuit court of the United States for the district of West Virginia, on June 7, 1877, on the ground that the parties were citizens of different states, the West Fairmont Gas Coal Company, the plaintiff, being a corporation of the state of New York, and the defendants citizens of West Virginia and Ohio. Thereupon, on October 3, 1877, the surviving partners of the firm of Dewey, Vance & Co. filed the present bill in equity against the West Fairmont Gas Coal Company, the plaintiff in the action at law, and the West Fairmont and Marion Consolidated Gas Coal Company, a corporation organized under the laws of West Virginia, alleging that under the contract of October 4, 1872, the sale of coke was by sample, the quality of which was to be equal to that of a certain trial lot previously tested, accompanied by an implied warranty that the coke to be delivered under the contract should also be fit and suitable for the purpose of being used in the furnace of Dewey, Vance & Co. for making pig-iron; that in point of fact the coke actually delivered under the contract was not equal to the quality of the sample, and was not fit for the purposes for which it was to be used; that in consequence thereof the complainants had ceased and refused to order or receive any more than that delivered and paid for, and that by reason of the bad quality of the coke actually received and used they had suffered a large amount of damages; that the West Fairmont Gas Coal Company in the meantime had become and was insolvent, and that they had made a fraudulent assignment of their property to their co-defendant, the West Fairmont and Marion Consolidated Gas Coal Company. The prayer of the bill was that the amount of damages sustained by the complainant might be ascertained, that the assets of the West Fairmont Gas Coal Company, so fraudulently assigned, be subjected to the payment thereof, and that in the meantime all proceedings in the action at law brought by the West Fairmont Gas Coal Company should be stayed.
The right to maintain such a creditor's bill is based upon the Code of West Virginia, c. 133, § 2, which provides that 'a creditor, before obtaining a judgment or decree for his claim, may institute any suit to avoid a gift, conveyance, assignment, or transfer of, or charge upon the estate of his debtor, which he might institute after obtaining such judgment or decree, and he may, in such suit, have all the relief in respect to said estate which he would be entitled to after obtaining a judgment or decree for the claim which he may be entitled to recover.'