Weekly journal-miner., 1918-02-20
FRAME IS LOSER IN B|G JEROME
 PORTLANDSU|T
DECREE OF JUDGE LYMAN PROVIDES THAT DE- PENDANT MUST RETURN 469,OOO SHARES OF STOCK TO THE TREASURY.
(From Sundays Daily)


 pai Superior court during the trial of the suit which the stockholders of the Jerome-Portland Copper Com pany had instituted against A. B.
 Frame, yesterday afternoon handed down a decision canceling the 469, ,96L shares of treasury stock which the defendant held in the J.-P. organiza- ton, and directing local banking
 firm, which is holding the shares in ] escrow, to deliver the shares over to the receiver of the copper company | Tor restoration to the company's treasury.
 Judge Lyman's decision of ycstcr- | day terminated one of the hardest
 fought and most spectacular mining
 suits ever threshcd out in the local
 courts, and has the effect of practical
 ly putting the financial affairs of the | Jerome Portland back on the same plane as existed before Mir. Frame.
 the promoter, succeeded in getting the
 company almost hopelcssly snarled
 in a tanglc of legal controversy.
 Frame organized the company dur
 ing the carly days of the Jerome
 Loom, and received large block of
 the organizations stock for his scr
 vices. Later he secured possession of II mining claims in the Verde district and upon representations that the claims were of unusual value, he
 succeeded in getting his directorate
 tt issue him about 70O,OOO shares of
 stock in exchange for the claims
 Later, the stockholders raised a "howl", alleging that the claims were worthless and that Frame had bun
 coed the company when he put the
 deal over. In order to allay some oi ! the discontcnt, Frame later return ] ed about 250,O0O shares to the treas
 ury, but thrs was not sufficient to set ! tie the matter, and the suit was filed ! ir May by the minority stockholdcr. l to compel a complete restitution. ] The case came to trial month or so
 ago, being heard by Judge Lyman | Shortly after the action was tried, Frame quit his job as superintendent
 of the Jerome Portland, pulled out
 the pumps, paid off the miners and | skipped out of the State, taking with ! him the company's safe. The affairs ! of the J.-P. were in such bad shape 1 tl.at d number of the stockholders asked the court for a receiver, and r. 1 II. Dyer of Jerome was named in that capacity. It Is Mir. Dyer who will rc. ccivc the shares now held by the
 bank and restore them to the com- 1 pany's treasury.
 ! In his decision, Judge Lyman di-
 rcctcd the receiver to rcconvcy to l Mir. Frame the title to the II mining ! claims. The court held that the claims were worthless, yet owing to
 the fact that Frame had once owned them, he should have them back again ] IT, exchange for his stock, regardless 1 oi their value or merit.
 i The decision of yesterday will go ! far toward clearing up the question as to how far d promoter may go in i the matter of securing stock in the company he represents. It is' said
 Judge Lyman's ruling will have the
 effect of stopping the common prac- ticc of promoters securing large blocks of the stock through the ma
 ohinations of dummy dircctoratcS, by
 voting the shares to themselves for | some imaginary services or for some other consideration oi doubtful value i This was the first case of its kind to be brought under the provision of ' the State constitution, which express | ly prohibits a corporation disposing of its stock to anyone except bona ! fidc subscribers who pay for the shares either by cash or through the performance of some legitimate ser. vices. The Hull case, which is said l tc be somewhat similar in issues in yolvcd, grew out of actions which
 tianspircd in the old Territorial days,
 and for this reason will not be sub- ] feet 70 exactly the same treatment al
 the hands of the court when it is call i cd for trial.
 The order of Judge Lyman directed
 ;,.at the company appropriate sum | equal to onc-tcnth of the value of the ] shares recovered, as payment for the attorneys who represented the plain tiffs. This will bring the fees ot ! Mcssrs O'Sullivan, Morgan and Fa-
 your to somthing like S23,000 figur-
 irg the valuation of the stock at 5O cents per share. The attorneys fec
 can be paid in either cash or stock, according to the courts ruling.
 Judgment Against Nilsson.
 Judge Sweeney yesterday afternoon entered a judgment in favor of the . San Francisco Securities Company
 against \. R. Nilsson of this city, in
 the sum of S297 and costs The coast i firm sued to collect this amount, said
 to be duo on an automobile which
 Nilsson had purchased on the install ncnt plan.
 Pleads Not Guilty