Los Angeles herald., 1909-11-16
PHELPS DEFENDS
STOCK PURCHASE
SUIT FOR RECOVERY MAKES
HIM ANGRY
Declares There Was No Collision and
That the Stock Was Bought by
Himself After Being Of
fered Public

According to all accounts there will
be lively doings over the suit which
three of the directors of the Silver Tin
Oil company have brought against
three other directors for the recovery
of large sum of money said to be the
difference between the price received
for a block of 1000 shares of treasury
stock of the company and the present
market value of the same. Zed Phelps,
one of the directors against whom the
suit was brought, left San Francisco m
a hurry when he learned of the action
and is hopping mad. He is quoted by
the Coalinga Oil Record as follows:
z. l.. Phelps came down from San
Francisco this morning, having cut his
trip to the Bay city short on account
of the suit filed against him and the
other directors and officers OF the
Silver Tip Oil company by j. w. Rags
dale of Fresno. Phelps had not yet
been served with the complaint in the
suit, but he had been apprised of the
allegations set forth in the document
Before leaving san Francisco he had
secured the services of one Of the best
known firms of attorneys there to de-
fend him and his associates.
phelps came to the oil Record Of
flee on his arrival in town this morn
ing and gave us his account of the
transaction that is made the basis OF
the Ragsdale suit. According TO Mr.
Phelps the action of the board of direc
tors in fixing the price of the stock
was made public at the time and II
was offered freely about town for SL25
a share, but it found no buyers at that
figure. Even some Of the directors
themselves claimed the price was toe
high with the showing then made on
the property,
When Phelps took up the block of
1000 shares at Sl.25 it was with the
understanding that the money was to
be used as needed in the development
work then going on, and he actually
made arrangements at the bank to
have the note paid on demand, placing
with the bank collateral securities fan
beyond the amount Of the note. The
bank officials where these securities
were placed verify this statement OF
Phelps.
"Phelps makes denial of many OF
the allegations in the complaint filed
by Ragsdalc, claiming that they are
false. He says that the action of the
directors was ratified, and that the
giving of the notes was matter OF
knowledge to every one of them.
phelps says that so far as he is
concerned there was absolutely moth
ing done under cover and that it was
with the knONleuSc, CONSENT anu dp-
proVal of all of the directors and of
many of the stockholders, and was
done in the interest Of the company, as
he then believed and still believes.
mot only is Phelps going to defend
his action in this matter, but he says
he is going to come back at his de-
tractors with a suit for damages for
bringing this suit and that he will
push it to a finish, as he considers he
has been damaged to the extent Of
$780, 900 in this matter and that he will
bring suit against Ragsdale for that
amount.
Speaking further of the offer of the
stock publicly at the time the direc-
tors fixed the price at $1.25, Phelps says
he publicly canVassed the town for
buyers and that he only succeeded in
finding one man outside of the board
of directors at that time who would
pay the price asked for the stock, and
that man was Copeley, the rig builder.