The herald., 1898-12-16
A MINING CONTROVERSY
PARTNERS FALL OUT OVER A
DEAL AT HAvILAH
INDEMNITY GUARANTY SUIT
MISREPRESENTATION Regarding Value OF
the Claim Made and Denied-A
Struggle for ogilby Mines

The facts of mining controversy were
ho;ro ;no,,;red into Yesterday by Judge Van
DYKE. The suit was originally brought d!
George Rhorer and p. b. Mathiason against
Harry Mead and wife in San Diego county
IL appears from the complaint that on
September "a, 1895, plaintiffs and deieno-
ants executed an agreement that whereas
nlaintitfs were about to invest S3ooO IN
mining property at Havilah, Kern county,
Mead in order to indemnify them and Sc
cure them against loss in the venture, as
signed to Rhorer and Mathiason an undl-
vided interest in certain mines IN the Ogli-
bv mining district These claims and min
ing property being bonded to Prof. Illden
were given as security for $1,000, which
amount direction was made to be paid to
them by Tilden as the money should become
due. Whenever the $4,000 should have been
fully paid or Rhorer and Mathiason should
have been guaranteed to their satisfaction
against loss, this indemnity agreement was
to be void.
Later. an additional investment of $4,000
being desired by Mead on the Havilah mine,
he made assignment for the additional
amount of $1,000 of his interests in the mines
in the Ogilby district, upon which plaintiffs
thus acquired altogether claim for S50Oo.
Their suit was based on allegations OF mis-
representation by Mead Of the value OF the
Havilah mine, which plaintiffs allege was
in fact of no value whatever In pursuance,
however, of their agreement with Mead,
company was organized under the name OF
the Tropico Mining company, operations
under the incorporation of which were in
trusted to him.
Under the terms of their agreement,
plaintiffs allege they advanced over $4,000 in
cash, the credit OF the corporation being fur
ther pledged for more than $1,000, for which
its stockholders are liable. Plaintiffs say
the company is hopelessly insolvent and
that they transferred to defendant all the
stock they received in the. company on April
IL, 1885, requesting him to reimburse them
for their advances, which he failed to do.
Judgment was asked for $4,000 and interest,
the same to be a lien on the one-third inter
est in the Ogilby district mines pledged as
indemnity.
In their answer to plaintiffs third
amended complaint, defendants deny hav
ing misrepresented the value of the Havi-
lah mine, their statements with respect to
which, they say, were based entirely upon
opinion and not made as absolute fact. They
admit the execution of the indemnity bond
but claim that the funds advanced by plain
titfs were so advanced after personal inspec-
tion by Mathiason of the Havilah property,
in consideration of which advances they
were given certain interests in that mine,
the indemnity agreement being given mere
ly to satisfy Rhorer, with the understanding
that it should be null and void as soon as he
should personally examine the mine and be-
came satisfied with the investment.
Subsequent examination and acceptance
by Rhorer, they say, invalidated the indem
nifty agreement The facts that both Rhorer
and Mathiason were experienced mining
men and had both seen and approved of the
Havilah investment are all brought to the
attention of the court. Old and worthless
machinery, bought by plaintiffs, contrary
to the advice of Mead, and other cash outlay
for which he disclams personal responsible
ity, tended to swell the expenses of the
corporation.
The $4,000 advanced in pursuance of the
second agreement and with the understand
ing that the money should be used in devel-
oping the Haviah mine, defendants say,
was not so expended. They further allege
that the mine contains sufficient ore to en-
able profitable operation of the same, and
that by the conveyance of interests in that
property to plaintiffs they fully balance the
obligation to them. A counter claim for
Mead's services as mining superintendent is
also made and judgment is asked for the
cancellation of the bond on the Ogilby mines
and for $500 with interest from November
90 1895, the cash balance due for services
rendered.
The trial of the cause will be resumed this
morning.