Arizona weekly journal-miner., 1898-10-26
cAiet Justice Streets O. lnlon in Grant ing q New TrIaI in inc Hill-
 side Case
Lawisr ( Wells Not Responsible for the Acts oi Doctor Warner in Selling His Seven Stars
 Stock.
In the District Court of the Fourth
 Judicial District of the Terri tory of Arizona in and for the


 ster Street, presiding.
 RemotiOn for a new trial. October 22, 1898.
 By the Court-This Is a motion for a new trial. The situation of the case is about as follows: I will very
 briefly state it, and will not under take to render any argumentative opinion. l announced at the time the motion was submitted, that
 whatever disposition made of the motion, would be without any writ ten opinion. And that, for the req son of the peculiar composition of our courts, making it necessary for me to sit as one of the judges in ap-
 peal if the case should be appealed. His Honor Judge Sloan being one of the attorneys in the case, would be
 disqualified from sitting in appeal, ', and it would be necessary, if the court is at that time constituted as
 it now is, for me to take part in the
 hearing. And it would not be fair to either side to elaborate a long and
 thoroughly written argumentative opinion as to the merits of the case.
 So 1 only propose 10 speak of the motion to the extent that may be necessary to intelligently explain
 the present reasons of the ruling. Lawler and Wells were the owners
 of the group of mines that was pop
 ularly known as the Hillside Group
 of Mines, and they made a bargain
 with H. H. Warner to sell to him
 the group of mines for the consider
 ation of $450, 900. The method of sale was by @ deed executed and
 placed in escrow at one of the banks
 at Prescott, there to remain until
 the full purchase price was paid,
 when it was agreed that upon the
 payment of the full purchase price,
 the deed should be delivered to the grantee; upon the failure of the full purchase price, it was to be rede- livered to the grantor; a very ordi- nary transaction in mining commu-
 mites. On the sale, at the time it
 was made, there was paid $20, 900, and afterwards $3l, 900 by Warner.
 The deed was taken in the name of one Cowlsnd as the agent of Mir.
 Warner. That was done at Mr.
 Warmers request.
 After the sale had proceeded to that extent the grantee was allowed
 to go in possession of the mines for purposes of working and develop ing them; also very ordinary ar rangeRent between grantor and grantee in dealing in mining prop critics. And Cowland and those to whom he assigned remained in DOS session for some time, when the po- session finally reverted to the grant ors, Lawler and Wells.
 After the grantee had come into possession of the mines, after the deed had been deposited in escrow, Warner and those with whom be was associated in the purchase, or ganized a company, called the h. dustrial Mining & Guaranty Con- pany. And Cowland made a deed to the Industrial Company for DOT ton, nearly all, of those mines which were embraced in the deed from Lrwler and Wells to him. There was afterwards formed a company by Mr. Warner and those who were interested with him in the purchase of the mines, 8 mining company, called the Seven Stars Gold Mining Company, for the express purpose of handling the mines. And in or der to do that, they felt the necessi- ty of formulatingand issuing a pros pectus, to be circulated among the people. That prospectus was pub lished to the extent of a great many hundred and away into the thous- ands, and extensively circulated. The prospectus included ali the statements which seemed to be an inducement to those who might read it, to buy stock.
 And there were some expressions in that as to the ownership of the mines. There is one expression that, upon one construction of it, | looks as though the Seven Stars i Mining Company were the complete | owners of the title to the mines. Another expression used in the prospectus would seem to indicate that was not so, but that it was the intention of the company to obtain thereafter title to the mines.
 The balance of the purchase price, o its full extent, was not paid. -awler and Wells received, in addi- ion to the $51, 900, enough to make sum in the neighborhood of $234, 100 or t2S5, 900 all paid upon the |. purchase price. Just exactly where hat money came from and how it vas raised, was a question of inves- igation, and upon the trial of the ause by this court, another judge fitting in the matter, it was ordered hat an investigation be made as to low LawleF and Wells received the honey other than the S51, 900.
 This suit has been brought by Wiser and number of others who { ought stock, to obtain from Lawler nd Wells the amount of money that Tas paid to them by reason of the ( ale of stock. In the complaint there ( ras an allegation that Lawler and [ !ells were active participators in c le false prospectus, and an allepa- on that the falsity lay in the state ent contained in the prospectus of a le ownership of the title. Such a lit as that is one that is quite com a on and well recognized in the law, t suit for damages, for fraud against b tive participators in a fraud which d ads so the loss of the complainant. Il This complaint however does not t K for damages; 1t asks that the ti oney which was obtained by Law L and Wells by reason of the sale S: stock, be made a lien upon the d. ne, which has reverted to them al reason of the balance of the pur- b, ase money not having been th Id. Hut iD making that prayer, ar ey base 1t upon the allegation that SC 'wler and Wells were participators ar d responsible, morally and legally in the damaging effects of the pros th ctus. In the prospectus the pa mes Of Lawler and Wells no where IT pear. It is we'll established that or wler and Wells were not connect UT with the corporation of the Seven de 'en Stars Gold Mining Company stl had no interest in the enter Ia SC. But there was a tendency of pu evidence to show that although en t was the case, Lawler and Wells an suited and advised in the making