The San Francisco call. [volume] (San Francisco [Calif.]) 1895-1913, 1895-11-10
The Famous Cherokee Blue
Gravel Suit Is Finally
Submitted.
SEVEN YEARS OF LITIGATION.
The Bank of CALIFORNIA; Technical
Struggle for Valuable Hydraulic
Property.

The big mining suit of William Alvord
ct Hal. VS.. the Spring Valley Gold Mining
Com pany, with the Bank of California and
N. d. Rideout as intervenors, wherein the
bondholders for seven years past have
been attempting to foreclose their mort
gage on the well-known Cherokee gravel
mine, was finally concluded in this City
yesterday before Judge Prewett. The case
is one of the longest drawn out and most
bitterly contested that have ever taken
place in the State. The court has held
various sessions, both in Butte County and
San Francisco.
1t is the same case in the closing hours
of which Attorney t. Z. Brakeman, acting
for the bondholders, made his startling
disclosures regarding the conduct of G. W.
Cross, the attorney of the mining COM
pany, which resulted in his hastily de-
mandlng of Judge Prewett the appoint
ment OF receiver of the mine pending the
litigation. In his affidavit filed before the
court the attorney claimed that Cross was
virtually guilty of betraying his own
client for either hi own gain or that of the
Bank of California
He alleged that through some lapse of
attention the mining company had for
felted its title to the entire portion of the
unworked lead OF their mine, and that
Cross, as the attorney of the company, had
taken advantage of that to step in and
Jump" it in its entirety in his own name
and that of his two sons. His action, if al
lowed to stand, would deprive the mine Of
its principal asset. Attorney Brakeman
also feared that the water rights by which
the mine secured its water, eighty miles
frem the works, were in danger of being al
lowed to purposely lapse in order that they
might too be relocated.
Cross admitted that he had taken up the
unworked portion of the mine in his own
name, but refused to state whether it was
for the benefit of all parties concerned or
not. On the emergency" showing made
by Attorney Brakeman Judge Prewett at
once announced that he would seriously
take the application for a receivership
under advisement and deliver his decision
next week.
In many other ways the case just con-
cluded has been of a peculiar and unusual
nature. The contest for the possession of
the valuable Butte County mine. while
nominally between that of the bondholders
and of the corporation itself, is thought in
reality to be between the bondholders On
one side and the Bank of California and
the bank of n. d. Rideout on the other.
The principal holders of the bonds are
Louis Glass of San Francisco, David Gage
OF Oakland, Charles NJ. Fry, w. L. Jenkins
and Charles T. Post of New York The
amount of bonds issued to them is $155, 900.
The two banks appear as intervenors in
the case and they have really fought the
bonds from the start, over seven years
ago. The Spring Valley Gold Company,
the nominal defendant, is bankrupt, as its
debts amount to more than it's assets.
G. w. Cross, who, on the records of the
court, is their attorney, is generally sup
posed to be working in the interests of the
| I, ,-.l~ I a44.o
ney and the treasury of his client is abso-
lutely empty.
The case has already been before the Su-
preme Court once and on that occasion
the bonds were held to be valid lien on
the property. Now the principal point of
contention made by Attorneys f. c. Lusk
and j. NJ. Allen of the two banks and of
of the statute of limitations.
| The arguments made against the validity
| of the bonds on this point, the only one
that was not passed upon by the Supreme
Court, are Ola purely technical nature,
and have never before been brought to
court for adjudication.
| The situation surrounding the execution
and delivery of the bonds is also without
precedent. The suit to foreclose the bonds
was begun on June 80, 1888, just within
| one day of four years from the maturity of
the mortgage.
| Inc bonus were OTlSludllN ulduo OUI ny
q New York corporation named the Spring
! Valley Hydraulic Gold Mining Company.
The longest and bitterest fight was made
! by the opposing attorneys over the legality
of their issue, and that point was what the
Supreme Court last spring decided IN favor
| of the bonds.
Judge Prewett holding that they had
never been legally authorized by the stock
| holders. In 1886 the New York company
wished to raise funds, and as the laws of
! that State forbade an ass essment upon the
stock the stockholders formally agreed to
organize California corporation, where
assessments are allowed and transfer
their assets to the new company, which
was duly done. The new corporation for
mally agreed to assume all the obligations
of the old company, and especially that
created by the bonds. When the bonds
were executed in New York they were
| signed by Trustee Laidlaw there and by
him mailed to Trustees Alvord and Low
of California for their signature and ac-
| ceptance. The question of the statute of
limitations hinges upon the delivery and
execution of the bonds-whether the sig
nature of Laidlaw and his subsequent
mailing of it completed the formality or
! whether it was necessary for the two Cali
| fornia trustees to also sign it. 1t the de-
livery took place in New York then the
| two years statute would run against the
| bonds, although the attorney for the bond
holders contends that by the assumption
of the bonds in 1885 by the California cor
poration it created new and independent
promise to pay, good for four years from
| date.
| Judge Prewett, in his former decision,
| decided that the bonds were not outlawed.
| Although the case was only finally SUBJ
mitted to him yesterday the points are the
same as in the former trial, and his de-
cision is expected to be given any day,
when of course an appeal will be taken to
| the Supreme Court by the defeated side.