The Washington herald., 1907-10-23
STUPENDOUS FRAUDS
CHARGED IN BILLS
Continued from Page One.

a copy Of which was filed with the bill
The district attorney stated to the court
that this certificate of Incorporation Is
one which is unlawful under section
of the code under which it purports to be
filed, because the incorporators claim the
right to carry on more than one kind
OF business.
District Attorney Baker charges that at
the time the concern was incorporated
in November, 1903, Davis had an option
on these Capuzaya mines. in Mexico, and
that it was his purpose in organizing
the company 20 sell the mines to the
company al a price greatly in excess
OF the price he paid. 1t is charged Davis
contracted to pay SS0,000. These mines
are known as the San Vincente, Capu-
Zaya. and San Baltazar properties, and
were situated in the mining district OF
Parral. near the city of PaTral. in the
state of Chihauhau, Mexico, and are
known as the Capuzaya group. The bill
then continues:
That in pursuance 10 the said inten-
ton, the said Davis, on November 16,
1903, agreed 20 sell the said mining prop
critics to the said company. and the said
company agreed to purchase the same for
eS9 $40 shares of the capital stock Of the
said company and the sum of $4,000, to
be paid in money in several insjallmentS,
the said Davis agreeing to contribute to
the treasury of the said company enough
Of its capital stock to be sold by the said
company to pay the said sum Of Sl20,0
and to raise the necessary development
and working capital for the said proper
ties.
stock offered for sale.
THAT thereafter the said Davis did con-
tribute to the treasury Of the said COM
pany $4,000 shares Of its capital stock.
and the same was offered for sale as
treasury stock through the said Davis,
who had been elected vice president of
the said company. and one Edward c.
Bryan, who had been chosen treasurer
thereof
And petitioner is inormed and believes,
and therefore ayers. that in the latter
part of the year 1904 the said Davis and
Bryan. as such officers Of the said COM
pany. sold more than $500 shares of its
capital stock to persons who purchased
the same in the belief that they were
buying treasury stock of the said com
pany said belief being based upon repre-
sentations made by Davis and Bryan that
the same was treasury stock; that certif-
Gates of stock were issued TO such puT-
chasers. and were charged to tie stock
then in the treasury Of the said company
that thereafter the said certificates Of
stock transferred to such purchasers We're
by the said Bran, in his official capacity.
charged 90 tn stock of the said Davis,
and the money received therefor was
never turned into the treasury Of the said
company, or accounted for In any way.
THAT the said stock was sold at prices
ranging from $3.50 70 s. per share, bring
ing IN over $4,000, which sum was CON
verted to their own use by the said Davis
and Bryan.
And petitioner is informed and believes.
and therefore. AYERS that many other
persons bought stock from the said Davis
and Bryan. as such vice president and
treasurer respectively in the belief. based
upon the fraudulent misrepresentation
made to them by the said Davis and Bry-
an, that such stock was treasury stock OF
the said company. and that the money
derived therefrOm was 10 be used for the
purposes of the said company, when, in
fact. the stock actually sold and trans
ferred 10 such persons was stock owned
individually by the said Davis. and the
money paid by such purchasers was not
nor was any part thereof, received by the
said company but was received and ap-
propriated TO their own use by the said
Davis and Bryan
Serious Charge Is Made.
The district attorney then charges that
since the organization OF the company.
Davis & Bryan sold its stock throughout
the United States and in foreign coun-
tries, and have received an aggregate
Of about S1O00,0oO therefor, and that none
of this money has gone into the treasury
OF the company, but that it has been
appropriated TO their own use.
1t is also charged that Davis & Bryan
have frauduently issued more than the
capital stock, and that there are now
outstanding, because Of such issue by
them, at least 100000 shares Of the stock.
while its capital stock is limited 10
100000 shares.
It is then charged that under a reso-
ton passed by the executive committee
in February, 1894 authorizing the bor-
rowing Of 100000; that Davis & Bryan
/ borrowed $4,000. no part of which went
/ into the treasury, but has been retained
| by them. and that when the certificates
Of Indebtedness given to the lenders ma
/ tured many of them were acquired by
Davis & Bryan and are now held by
them as claims against the company.
II Is charged that among the certif-
Gates so issued Is one for 500, issued 10
/ W, r. Redman. November q, 1904. and
also another for 500, issued 10 St
Joseph's Catholic Church. November 2,
1894, and that both Of these loans We're
1 due February l, 1906 and that while the
holders have demanded payment, It has
been refused
The officers of the company are also
charged with failing to make annual re-
ports as required by law until January,
1906, and that report. and that made
January ], 1907, were false. in that at the
time each was signed, the said company
was indebted IN the sum of 100000 which
represented the certificates Of indebted
ness mentioned above.
Vice President Bryan is also accused
OF repeatedly refusing to let the stock
/ holders of the company see the books.
and Of repeatedly refusing to make trans
Ter Of stocks on the books Of the company
by stockholders.
Alleges Illegal Board.
The district attorney also charges that
the board OF trustees of the company
elected November 26, 1906 is Illegal. in
that majority Of them are not resi-
dents of the district. as required by the
code.
The officers of the company are ex-Sen-
ator John P. Jones. OF Nevada, president.
now citizen of New York; Eugene
Davis, Of Baltimore. vice president: and
Edward C. Bryan. secretary and treas
urer. The board Of trustees elected last
November consist of these officers. and
Charles Evans, OF New Jersey; F. w.