The San Francisco call., 1898-02-14

purchase of 5000 shares of the stock of the railroad owned by these corpora tionS. Thus the three capitalists be- came the practical owners of the road. In order to carry out his interest in the concern and pay up the interest on his shares of the stock MT. Polhemus applied to Charles Mayne for pecuniary assistance. In consideration that he should put up the necessary coin an agreement was entered into between Mayne and Polhemus by which the lat ter transferred one-half his interest to Mayne.
 Shortly afterward Polhemus went East to obtain from the Government in bonds and lands a subsidy for the com pany Before leaving he confided his interest in the road to his partner Mayne. On his return, as Is claimed by the plaintiff, the defendant made repre- sentations that the property was losing money, when, as a matter of fact, It was paying a large profit, and by such representations induced him to part with his interest for small sum.
 This is the large point at issue, for 1t has since been discovered that Mayne' representations to Polhemus were un- true, and that at the time that he claimed the road was losing money 1t was in reality in good financial condi- tion.
 Then follows allegations of the ne- gotiations for the purchase by the San Francisco and San Jose Railroad Com pany of the Market Street Railroad Company of its owners, Donahue, New hall and L. l.. Robinson. This pur- chase was made before the plaintiff left California. and was for S250, ,000, in bonds of the Market Street Railroad Company guaranteed by the San Fran cisco and San Jose Railroad Company. After this purchase new company was incorporated, entitled the Market Street Railway Company, with capi- tai stock of 7500 shares, and $500 of these shares were subscribed for by Donahue Newhall and Mayne. In payment they gave their cheeks for S36,670 each, which checks were never used, but were returned in 1870 after the sale and transfer of the above men, tioned railroad and railway to Stan ford, Huntington, Hopkins and Crock er
 Prior to Polhemus' departure for the East the Southern Pacific Railroad eX- isted as a corporation on paper, and Mayne was one of its promoters and incorporators, and also one of its large stockholders. It appears that on Sep tember p, 1866, while Polhemus was in the East, the project of the Southern Pacific Railroad for purchasing the San Jose Railroad was already con- ceived and steps were being taken to accomplish that end. On that day a map of the Southern Pacific Railroad route was prepared, on which it was delineated as commencing in San Fran cisco and running over the line of the San Francisco and San Jose Railroad through Gilroy. Then began negotia- tions between Messrs. Donahue, New hall and Mayne for and on behalf of themselves and the Southern Pacific Railroad, with Messrs. Lloyd Tevis and H. W. Carpenter, representing Stan ford, Huntington, Hopkins and Crock CT, to sell the San Jose Railroad and the Market Street Railway for $3,250, 900. On January 29. 1S67 Messrs. Donahue, Newhall and Mayne signed an agreement segregating their inter ests in the San Jose Railroad and Mar ket Street Railway, each taking one third of the bonds and stock and own ershlp.
 The sensational feature that is ex- pected to develop, however, lies in the disposition of s300,0 900 of the stock of the company that was purchased by the municipality by the exchange of a like amount of municipal bonds. The charges will be made that by getting an act passed through the Legislature enabling the municipal corporation to sell these bonds to the best advan- tages, the Board of Supervisors was manipulated in such a manner that 5000 was all that the city ever received out of the transaction. It Is charged also that Mayne refused to render a statement to Polhemus and that the latter was defrauded out of more than S100 000, 900 in the opera ton.