The Salt Lake herald. [volume] (Salt Lake City [Utah]) 1870-1909, 1901-11-24
FRAUD CHARGED
IN MINING SUIT
Lively Feud in the St. Joe CON-
pany.
CONSPIRACY IS ALLEGED
SUIT AGAINST OFFICIALS OF
COMPANY.

ing company was commenced yesterday
il the district court, when Attorney
Edward A. Walton filed suit for Ellen
Carey against DR.. R. A. Hasbrouck.
the company's president; w. S. Burton,
its secretary and treasurer; Director
Benjamin Harmon, Eloise c. Burton,
NJ. H. Eddy and r. E Rex, praying
for the appointment Of a receiver to
take charge Of the company's affairs,
for the annulment OF numerous speel-
fed actions Of the company's executive
officers, and for other relief. The suit
is a sequel to the action Instituted two
weeks ago by President Hasbrouck
against Mrs. Carey and her husband,
Attorney Walton lad Attorney A w
Casey to collect $4,000 damages by
reason OF the defendants in the libel
suit having circulated call for spe-
cial meeting Of stockholders TO remove
President HasbrOuck for alleged fraud
ulent actions in his management Of the
cOmpany's affairs.
In the complaint filed by Mrs. Carey
it is recited that the suit is COM
menced for herself as owner of 131, 1874
shareholders who have a similar griev-
ance against the officers of the COM
pany. It is then set up that the St.
Joe Mining company was incorporated
with a capital stock of 100000, in 81
shares, in October, 1897 to operate
mining property at Bingham. but that
later the capital was increased to
/, COS, 900 shares of the same par value,
$500. 900 of the increased capital being
distributed as a stock dividend to the
shareholders. the remaining 400, 600 be-
ing held as treasury stock 1t is al
legged that the company's property is
worth 100000, but that the mine is I'M
productive, and the only revenues de-
rived are from the sale of treasury
stock. The directors have been re-
ouested to bring this action, ii is
charged, but they have refused.
Conspiracy Charged.
For specific cause of action it Is
charged by Mrs. Carey that President
HasbroUek, Secretary Burton and Di-
rector Harmon have conspired with
each other and with the other defend
ants, Eddy, Rex and Mrs. Burton, to
divert and misapply the company's
funds and property in the following
manner: That on Oct. 1, 1898, the three
defendants first named consented to
the allowance Of a fictitious and fraud
ulent claim of President HasbrOuck in
the sum of $16797 as commission for
selling treasury stock; that on Dec.
g, 1900 they coiluded with one Henry
Harker to show by the minutes of
meeting held that he was elected a di-
rector when, in fact he was not so
elected, and later allowed Hasbrouck's
fictitious claim OF LOCO for services
rendered the company and for expenses
incurred; that in September and Oc-
tober of this year Hasbrouck and Bur
ton carried through q conspiracy to
allow the formers claim Of $500 for nine
months salary as president, in VIOLA
ton Of the company's bylaws. which
was done to cover up the presidents
Overdraft of company funds. and enter
ing credit Of S219 to HasbrOuck's ac-
count for a fraudulent claim; that
HasDrouck and Burton caused to be Is
sued to one Joseph Slama 1000 shares
Of the cOmpany's stock without consid-
Grafton: that IN March, 1901, HasbrOuck
made a contract with one Mrs B. K
Tracey to do 1900 feet Of tunnel work
for the mine at SO a foot, which, it Is
charged, IS an excessive price, and
$4,000 has been paid on this contract.
More Fraud Charged.
Further specifying. Mrs. Carey COM
plains that Secretary Burton fraudu-
lently procured the allowance Of his
claim of $36.5S as commission for the
sale of treasury stock on Aug /, 1885,
and that on Oct = Of this year he
procured a credit on the cOmpany's
hooks through unlawful means for
e. \ E,~,.- l.
fraudulent records by inserting in the
minute book a sheet purpOrting to give
an account of a directors meeting on
Oct, l. 1900, when the execution of
promissOry notes to the late Edmund
H. Uhlig was authorized, this being
done to aid Mrs. HasbTOuck, who now
claims the notes as a gift from Uhlig,
and is suing for collection on them;
that in September of this year Burton
charged his insolvent Indebtedness or
S196.31 to the company against the SOL
vent credit of his wife for S716.25; that
he caused to be issued to his wife 10000
shares at a price below the market
value, and on credit: that he further
violated the bylaws by permitting
President HasbrOuek to borrow COM
pany funds
Continuing, the complaint further al
leges that the shares originally is
sued to Hasbrouck, Burton and Rex
were in payment of their two-thirds
interest in the Wedge claim, which
was declared to be free from liens,
but against which judgments to the
amount Of $1,000 have accrued on &C
count of the insolvency Of the ven
doris.
An additional charge is that Has
brouck's ten original shares were a
year ago sold under execution of a
judgment without redemption, leaving
him in the position Of not being a stock
holder for the alleged reason that $780,
00O shares issued to him have been
transferred TO Eddy to hold for him IN
secret trust. The same allegation Of
disqualification is charged against Rex,
whose stock is declared to be held by
Harmon in secret trust. Likewise, it
is alleged that all but ten shares Of
Burton is held in trust by his wife.
The prayer in the complaint is that
an accounting be taken to determine
the amount of company funds alleged
to have been misapprOpriated, and that
a judgment for such amounts be en-
aered jointly and iseveraIly against
the responsible officers; that the ar
fairs os the company be placed in the
hands Of q receiver, and the offending
officers be removed and their successors
be elected under the direction Of the
court: that all % the collusive actions
Of the officers be annuued: that the
defendants in control of the company
be entoined from issuing any stock
pending the appointment Of a receiver
or their removal and that the defend
ants be en1oined from paying any more