The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-10-26
STRANGE REVELATIONS EXPECTED
TO BE SHOWN IN A NEW
CIVIL SUIT.
HOW PROXIES MAY BE VOTED.
THE SYSTEM IN VOGUE SAID TO
BE ILLEGAL AND TO MAKE
FRAUD POSSIBLE.


rior Court yesterday by FL. ]. Sieberst, at
torney for Theodore Fox against Charles
H. Fish, T. H. Fish, John w. Twiggs, II.
Zadig, Nat T. Messer and the Consolidated
California and Virginia Mining Company,
lies tale of shrewd and successful manip-
ulation, according TO the narration of Mr..
Sieberst, that is almost unparalleled, even
in the remarkable history of mining stock
manipula ton that at one period gave this
City an unenviable fame.
The proceedings are brought on behalf
of Theodore Fox, stakeholder in the
Consolidated California and Virginia Min
ing Company to have set aside and declared
null and void the election of trustees of
that corporation held on October q and to
have a new election.
In an interview relative to the object of
having the alleged illegally elected trus-
tees ousted and a new board elected At
torney Sieberst related the history, as he
viewed il, of the corporation and the pc
culiar manipulation of its stock and prop
erty by John w. Mackay, J. l.. Flood and
Senator Jones.
He claimed that these three men, though
owning but very small fraction of the
entire stock of the corporation, were en-
abled to elect it's trustees through the I'M
lawful use of stocks in the custody of
brokers; that they thereby obtained con-
troll, through these dummy directors, of
the mines and other property of the cor
poration; that they made milling contracts
with the Comstock Mill and Mining Com
pany, owned by themselves, to mill the
ores of the Consolidated California and
Virginia Mining Company at exorbitant
prices to the latter, and at great profit to
the milling company; that the larger DOR
ton of the actual profits made from the
Consolidated California and Virginia Min
ing Company were thus devoted to Mackay,
Flood and Jones, and that the real stock
holders of the mining company were thus
being continuously and fraudulently de-
prived of dividends.
In explanation of how the law was vio-
lated, and these results accomplished he
quoted the following from the Civil Code
on corporations:
Section 312. At all elections or votes had for
any purpose, there must be majority of the
subscribed stock, represented either
in person or by proxy in writing. Every per-
son acting therein lin person or by proxy or
representative must be a bona fide
stakeholder, having stock in his own name at
least ten days prior to the election.
He also quoted the following from a
legislative act of 1880 for the further pro-
lection of stockholders in mining COM
panies, and which appears on page 149 of
behring's Civil Code:
Section q All stock in each and every min
ing corporation in this State shall stand in the
books OF said company in all cases in the
names OF the real owners of such stock or in
the name of the trustees of such real owners /;
but in every case where such stock shall stanu
In the name or trustee the party for whom he
upon such books and also in the body of the
certificate of such stock.
Section g. 1t shall not be lawful for any such
corporation or the secretary thereof to close
the books OF said corporation more than two
days prior to the day of any election. At such
election the stock of said corporation shall be
voted by the bona fide owners thereof. as
shown by the books OF said corporation, unless
the certificate of stock, duly sworn, be pro-
duced at said election, in which case said certi-
fcate shall be deemed the highest evidence of
ownership and the holder thereof shall be en-
titled to vote the same.
Commenting on this in it's bearing to
the proceedings brought yesterday Mr..
Sieberst said:
The Consolidated California and Virginia
Mining Company kept no such books as those
referred to and required by the law. and they
have no books which show the facts as to the
real owners OF the stock voted at elections.
In the complaint filed yesterday it is set
forth that the election of trustees of the
Consolidated California and Virginia Mn
ing Company held on the 21st of October
was unlawful; that the whole of the CAPT.
tai stock OF 216, 900 shares has been issued,
but does not stand in the books of the COM
pany in the names of the real owners of
such stock, or in the name of the trustees
of such real owners, save about 260 shares,
and that the books were closed on the 18th
of October, or four days prior to the cleo
ton.
1t is then charged that certain brokers,
falsely representing that they had
shares" in the Consolidated California and
Virginia Mining Company as trustees, gave
Charles III. Fish power of attorney to vote
the same at the election held on the 21st of
October. The brokers named and the re-
spective number of shares they claimed to
possess as trustees are as follows: