New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-05-19
THE COURTS.
SLING JAMES R. KEENE AND OTHERS.


CHARGES OF FRAUDULENT MISREPRESENTATION
MADE AGAINST wELL-KNowN wALL-sT MEN.
William Z. Badeau has begun in the Su-
peror Court an action against James X. Keene John d.
Prince James Whitley, II. f. Logan Henry c. Oakley and
MAYNARD c. Eyre to $1,000, the price paid by
him for COO shares OF the Bradshaw Mining Company
which are alleged to be worthless, or at least OF only
nominal value. The complaint reces that IN May 1881
the defendants Prince. Whitley, Logan and Eyre were
copartners doing business stockholders under the
firm name OF Prince IL Whitley, and that at the same
time the defendant Keene stock operator doing
business In NewYork City. These defendants, the com
plant alleges, entered into conspiracy with o. f. Nc
Dermott then a resident Of California, for the purpose
Of fraudulenty imposing upon the public Of New
York two certain mining properties In the
Tombstone district" in Arizona known as the Brad
shaw and Washington mines, by causing the public to
believe the mines Of great value and That per-
sons buying stock them would receive enormous re-
turns for their investments" The Bradshaw mine was
represented be worth 2250000 and the Washington
mine 81 900. In pursuance OF this alleged cohspra
cy to defraud the public the defendants had published
report In regard the mines made by f. Rhan mining
engineer and metaurgis and ono made by T. Augustus
Humbert, mining engineer The reports were arttully
contrived induce the public TO believe that the mines
were of enormous" value, and that the Bradshaw mine
had produced large quantiteoi silver reand that veins
exposed in it from which ore had beentaken worth
on an average $40 ton. The quantity Of ore abso
lutely In sight the time OF the examination Dy MI
Humber was estimated at $S29,7S5 "a The defendents
also issued circulars from the Office Of Prince and Whitley
In which the reports above mentioned were lncOipor
ated and IN which it stated that corporation
called the Bradshaw Mining Company Of Arizona had
been formed with capital stock Of $2,50OOOO divided
into 100000 shares. 1t was also stated that
the working capital in the treasury OF
the company was $4,000 In cash. For the
purpose of working the Washington mine company
had been organized with a capital OF $1,OOOOOO The
working capital in cash in the treasury amounted to
$4,000 It was also stated that the Bradshaw mine
mad been developed large extent there having been
opened upon II substantially timbered double COM
partment shaft 300 feet deep equipped with the best
hosting engine in the Territory OF Arizona The shaft
showed from the surface to the bottom weldeflned
true assure vein OF high grade slver-bearng quartz
averaging five to twelve feet in width at the bottom
OF the shaft Ore taken from this shaft had given net
result OF $50 ton Altogether body OF ore shown
estimated at from 100000 to S1,5O0,o00 The work Of
development "was being rapidly and energeucaHy
pushed ahead" The bottom Of the shaft was In bOdy
of ore samples of which had run as high as S4oOo ton
shipment OF bullion worth 100000 had been made az
the result of one months work Contracts had already
been made for all the shops buildings and uten-
sis necessary for operating so great "a nnlIle'
The circular also seated that there was no
reason natural or theoretical" why within year the
mines should not rival their neghbor IN tombstone,
that is the Contention mine, ne sock OF WHcn was
worth M market rates $3j0O0OO, and was payns
800 600 month in dividends Inc ore was worth foO
ton and the cost OF reducing the ore to bullion was
only i 30 The circular further represented thht the
stock OF the Bradshaw Mining Company was null paid
f6at H. " that for the 2500OO shares the sum of
81 500 900 had been paid into the treasury Oh inc com
many In money moneys worth, ana that the hOldtIs
OF such stock would not be liable TO any further cOnrlou
ZION either to the company or crediors,' ..,u..o.o
Mr. Badeau alleges that he believed tho representa-
lions contained In the circular ana reports Dy
Prince and Whitley, and purchased 600 snafes o. me
Bradshaw Company at - snare lie declares tDiH inc
o the defendants about the mines were
Ali false and were to them to be false, ana were
fleH fgfI
rhe mines were OF very, slight II any
value, AMI at no time did the value Oh
eitbrr of them exceed $4,000. The reports
OF The engineers published by the aefendants were false
and were fraudulcntly obtained The Bradshaw COM
was fraudenty cOntriycd for the purpose or carrying
out the swindle Its capital stOcA was MOI PAID up III
full land never paid up at all, excepting as Tue
transfer TO Of the title To the mine could De caeu
paying up OF the capital" The company never had any
working capital, and the statement IN the clrcur 10
that effect absolutely false The company did not
mines neither had produced nor were they producing
large amounts OF ore and there was 10 probaplhty
whatever that shareholders would receive enormous re-
turns for their investments. Inc reports VI
Khan ana IIumbert, far they puTpoIt
TO state existing facts, are absolutely raise
The value in sight at the time OF the eXanna
nothing; and there never had been any shipment of
bullion all The other statements ia the circular are
specifically stamped false In conclusion Mr Badeau
alleges that tine defendants By means OF their alleged
fraudulent REPRESENTATIONS succeeded in disposing in
NewlOrk of the greater portion OF The STOCK OF the
Bradshaw and Washington Mining Companies, amount
selves and G. r. McDermOtt, the president OF the Brad
shaw Company Mr. Badeau is unable to state the pro-
portion Of the 100000 which each OF the defendants
receives but hopes be able TO do so by means oil dis
sewell Pierce and Sheldon tho attorneys for MIR.
Dadeau.