Lyon County times. [volume] (Silver City, Nev.) 1874-1907, 1888-12-15
TRUSTEES CALLED TO ACCOUNT

he kentuCK inning suit IN WhlCh GoVer-
nor Stevenson has figured, has called out a
nice point of law-and one which may in
terest many people. The case was tried be
fore Judge Wallace Of San Francisco, and
the San Francisco Call in speaking of the
case talks as follows: alt is charged that
Governor Stevenson of Nevada, being owner
of controlling interest in the kentuck mine,
contracted with himself, as owner # certain
mills, TO crush the ore of the mine, and thus
made profit which his brother stockholders
did not share. On behalf of Governor Stew
rnson, it is claimed that at the time the con-
tract was made, he was individually a
Director Of the Kentuck; but it is not denied
as we read tie evidence-that he created
the board which did make the contract, and
that it was, to all intents and purposes, hi,
creature, nominated by him and elected by
him, and bound 10 serve him. The rule qM
faat PER alum fact per Sc would seem to
apply.
The raising of the point is more important,
as it is believed that Governor Slevenson's
practice has rather been the rule than the ex-
ception in the Comstock mines. The owners
of certain mills purchase majority of stock
in the mines, or secure control Of them by
begging or borrowing proxies. Having got
control, the trustees Of the mine-whom they
elect-contract with them, as mill owners,
to crush the ore mined at given rate. Thus
in a roundabout way, Mr.. A. B., who owns a
mill, contracts with himself, as represented
by mining trustees of his selection. How
the plan works is shown by the fact that
while mills on the Comstock are excellent
property, and pay large dividends, mines on
the same vein are not property at all, as
rule, and pay no dividends. 1t is not neces-
sary to study law to find out that the Prac-
tice which leads to this result Is illegal, and
will be so pronounced by the courts,
No trustee, having in charge other peoples
property, can make cotract with himself
affecting that property, and it makes no diff |
ference that he is not individually trustee, |
but merely, with his shares and his proxies |
elects others to serve as trustees. In the |
language Of the Court in the Kentuck case,
ga man who creates the board at his will
cotracts with himself when he contracts with
the board"
If the court of final resort should hold
Governor Stevenson responsible forany dam
ages which his fellow shareholders in the
Kentuck can prove they incurred by reason
of his milling contracts, large field will be
opened for mining litigation. The principle
once clearly laid down that milling con,
tracts made with mill owner by a board Of
mining trustees created by mill-owner are
illegal and void, the measure Of the liability
of the trustee who was false to his trust is
likely to be literally taken by courts They
will naturally lean to the side of the stock
holder who was betrayed by his trustee; and .
if the stakeholder can make ont PrtnlG taeie .
case of hardship, if he can produce any sem
blance Of proof that his trustee charged HIM
81 .on for milling ore which might have
been milled for S., it may go very hard in
deed with the men who combined in their !
persons the duplicate positions Of mill own
ers and owners of boards Of mining trustees"