The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1895-12-15

the defendants as the acting board of
directors of the Began Silver Mining
company from making assessments on
the capital stock of the said company
and from advertising the same for
sale as delinquent, and from ceiling
the same; also asking an accounting on
the part of the defendant, Johr Pogan,
who is president Of the said company.
for certain claims made by him and
allowed by the said board, claiming
that the same are fraudulent, fctl-
tious and excessive, and asking that
on the final hearing a receiver be APP
pointed and the corporation wound up.
The evidence showed that on June
Is. 1895. assessment number 1, Of 10
cents per share was levied by the de-
PENDANTS, John Began, John T. Began,
James A. Farrell and w. J. Began,
acting as a board of directors. The
articles Of INCORPORATION provide that
In order to qualify a, person to- be a
director in said company or to hold the
office. of treasurer he shall be the
company, of at least 5000 shares of
stock. The articles also provide that
no assessment shall be made until all
the working capital stock shall be eX-
hausted. At the time of this assess
ment it is clear that the working CAPT.
tai stock was not exhausted and that
hone of the persons who claimed to be
members of the board of directors ex-
cept John Began possessed the neces-
sary stock qualification. Pending the
action, however, on October 16 last, a
meeting was held at which the as
sessment was rescinded and a new as
sessment attempted to be levied. The
plaintiffs claim that this assessment is
also invalid for the same reasons and
for additional reasons which are set
forth in the supplemental complaint
filed by the plaintiffs. The testimony
shows that prior to the last meeting
John Began. who is the principal
stakeholder in the company and owns
q majority of the stock, transferred to
j. A. Farrell, 1000 shares of stock
which, together with the 1000 owned
by him. put into his possession 5000
shares. Five thousand shares were
also transferred to w. J. Began at the
same time and 1900 to John T. Began.
AT the meeting there were present
John Began. W. j. Began and James
a. Farrell These three men appointed
John M. Zane to fill the vacant place
on the board, and the four thereupon
proceeded to rescind the first assess
ment and to make assessment No. 2
of 10 cents per share. The testimony
shows that the stock was transferred
to Farrell and to w. J. Began by John
Began for the purpose of qualifying
them as directors. Farrell admits that
he did not become the owner of the
stock in his own right; that he paid
nothing for it and did not expect to
pay anything for it. The testimony Of
W. J. Began convinces me that the
transfer of the stock to him was color
able merely. and that john Began is
still the owner of the stock trans
ferTed to him and to Farrell. The tes-
timony further shows that w. J. Boz
gan at the first meeting referred to
was elected treasurer of the company
by the four men first named acting as
the said board. AT the time he had no
stock in the company and has never
since acquired any except in the man.
ner just stated. He never gave bond
as required by law or took the oath
of Office. Section 2270, 2 compiled laws
Of Utah, provides, that before the
first or any officers shall enter upon
the discharge of their duties they shall
give a bond and take the oath of Of
flee. The testimony also shows that
at the time of the first meeting on the
18th of June, there remained in the
hands of the company over 5000
shares of the working capital stock
At THAT meeting a resolution was
passed by which 800 shares of this
stock was set apart to protect double
issue of 800 shares which had been
returned to the secretary, one Scully,
for cancellation, and upon which new
stock had been issued without cancel
ling the old stock, and which old
stock was subsequently reissued by the
secretary. The testimony showed that
this 300 shares of stock was set aside
for this purpose seonditionally and to
become absolute if the said so-called
double issue shares should be presented
to said company SO that the company
should be liable therefor AT the
undertook to transfer the remainder of
the working capital stock to John b.
gan, president, at the rate of 80 cenits
per share in PART settlement of his
claims against the company, provided
more could not be realized within fif-
teen days from that date. Shortly
after the expiration of the fifteen days
the stock was actually transferred tn
John Began. This action was taken by
the four men acting as the board under
the circumstances heretofore stated,
none of whom were qualified to act as
director except John Began himself
Working Capital Not Exhausted.
I am therefore of the opinion that
the working capital stock has not been
exhausted within the meaning of the
articles of Incorporation; no appro-
priatiOn of it has been made by any
board qualified to act. The attempt
to do SO by the persons named is
nullity. The 800 shares were only
conditionally not absolutely disposed
of; whether it shall be exhausted de-
Ponds upon future contingency
The testimony also shows that John
Began, ever since the organization of
the company in November, 1892, has
been the owner of the majority of the
stock; that he has been the president
of the said company and has acted as
general manager. From time to time
he presented claims to the secretary
against the company and had them
credited to him upon the books, ag-
g.regatlng over $4,000. Out of this
amount something like $370O was for
labor, over $1,000 for board; 1915 for
watching, and over $500 for accounts
assigned to John Began by his son
John I. Began, James Began and per-
haps others. Without going into par
ticulars or discussing the other items
of the said account, it is manifest to
me from the evidence that these items
are excessive, fraudulent and fictitious.
The item for labor charges includes a
salary Of $500 a month allowed to the
president of the company for a num-
Der of months. The evidence indicates
that a reasonable amount for such
services as the president rendered
as general manager would be not
to exceed S150 month. The item Of
watching is claimed for nine months
at SIS per month, While the mines were
anf