The Birmingham age-herald. [volume] (Birmingham, Ala.) 1902-1950, 1910-06-21
ALLEN SUES FOR
RECOVERY OF STOCK
Claims Fake Representation on
Part of DR.. Grove
STATEMENT BY GROVE
says When He Took Charge of Proyi-
dencc OIL and Gas Company 1t Was
Understood Watered Stock
Would BE Called In
STATEMENT BY GROVE

Would BE Called In
J. v. Allen yesterday filed a bill in the
chancery court seeking to get possession
of 45,1s7 shares of stock in the Providence
Oil and Gas company. Mr.. Allen claims
that the stock was transferred to Turner
R. Weakley as trustee under false repre-
sensations made by DR.. G.. B. Grove,
who afterward became president of the
company. Among other things the bill
of Mr. Allen alleges the following:
THAT up to the time of the making of
the agreement. December %, 1909, it
was not known to the defendant that
oil or gas in merchantable quantities had
been discovered on any of said lands;
in fact, complainant had no reason to
believe then of the existence of gas In
merchantable or paying quantities on any
of said lands, until after the signing and
delivery of said agreement, and, In fact,
he was induced to believe by the said
/ G. B. Grove that merchantable or pay
ing gas had not been discovered on any
of said lands.
"As matter of fact, however, about
three days before the date of said agree
ment, the said Grove had discovered gas
in paying quantities on the southwest
quarter of the southwest quarter of sec
ton 8, township 16. range II. west, which
was part of the 5OO-acre tract of land
comprised in the agreement between
Grove and the said corporation"
He alleges that between December 20
and December % DR.. Grove led him to
believe that neither oil nor gas had been
found on the property up to that time,
adding: Grove claimed to be acting in
the interest of the company as one of its
large stockholders, but In fact his real
purpose was to eliminate complainant and
others as controlling stockholders and
put himself and associates in control of
the company.
DR.. g. B. Grove, president of the Provi-
dence OIL and Gas company, after seeing
the bill filed by Mr.. Allen, made the fol-
lowing statement last night:
I'm 1908, in the fall of the year. Mr. s..
A. Hobson, the geologist and myself.
after many discussions as to the posi-
bilities of opening a new coal field, we
decided that we would option the terri
tory near Fayette, and by having the
field thoroughly prospected we felt sure
we could open new field for extensive
operations. Mr.. Hobson did the field
work and l was to raise or secure the
money to pay for same. I succeeded in
interesting another party, who Joined me,
and this party and myself paid the bills
and Mr. Hobson did the work.
I'VE secured options on a large acreage
and then Mr.. Hobson secured the aid and
cooperation of Mr.. Brennan, the ablest
and most experienced diamond drlTler
know Of in the United States. Mr.. Bren-
nan put down a core drill hole in the
field near Sipsey river on the north side
of the Southern railroad track. At a
depth of something more than 800 feet he
secured core of a sandstone that he
(Mr. Brennan) said at a glance was
charged with oil and was true oil bear
ing sand or sand stone. Mr.. Hobson also
saw and recognized the value of the find.
subsequent to this find I approached
Mr.. Allen, who was general manager of
the Providence Oil and Gas company and
proposed to him to give the Providence
Oil and Gas company lease on 500 acres
of land If he would drill same within six
months and develop oil In paying guam
ties, and / further offered to put $1,000 In
cash into the company for which they
would give me stock at a low price, and
that | would guarantee that the drill
would pass through this oil bearing strata
If 1t was drilled. Acting on this offer, the
Providence Oil and Gas company made a
contract with myself and associates and
then bought a keystone drill and COM
menced drilling in June.
"ln September I saw they were not pro-
crossing as we'll as I thought they could
or should. I resigned as director In the
company and organized the Eureka Oh
and Gas company and raised $4,000 and
bought four drills and In October began
drilling in this field and in we'll No.
| found the gas at 1412 feet and since then
have brought In three more gas wells.
I'm August or September the Provi-
dence Oil and Gas company and Its OIL
GERS ceased active work and In November
It was proposed to me to take the COM
pany and do something to revive It, 1t
was shown to me that over $4,000 was ow-
ing by the company and that 1t could not
raise any money to work with. After
thinking over the matter / concluded to
trv and save the company and the friends
| Of mine who had bought stock at my sug-
gestion and I said to the promoters VINO
held the majority of the stock that II all
the Watered stock or promoters STOCK
| was given UP by the holders that would
accept the presidency of the company and
try to pull 1t through. The proposition
/ was accepted and the stock was trans
ferred and l was elected president. Sew
eral months after this the providence
company bought. the Eureka company
taking over the Eureka stock.
IT was very much surprised TO see
lin yesterdays papers that l was
\ charged with being guilty OF fraud ana
conspiracy in the suit brought by Capt
IT, " Allen, and I sincerely regret the
latitude of Captain Allen. When ne
says have Intentionally deceived him
Into putting back mis- stock he s'mp-
lily is mistaken. l refused absolutely to
take charge of the company until the
stock that was water pure and simple
was put back into the hands of Turner
R. Weakley, trustee, for the use and
this was done 1 went ahead and the
results speak for themselves.
1.-THE p o. & G. Co. stock was all
issued to Mr.. w. s. Allen, and Mr.. w
o. N. Scott. and as it was repY esented
to me, Turner R. Weakley, truatee, had
500, 900 shares turned over to him OF
which a large amount was sold al
10 cents, or for less, per share.
This suit does not in any way af-
feet the treasury stock of the COM
pany excepting that turned back by
Captain Allen. And / was in no wise
personally benefited by the transaction
land as a matter of fact either Captain
Allen or his brother or associates first
made the suggestion to me and only
after careful confederation did de.