Evening star., 1933-09-19
GOLD MINE STOCK
SALE BAN SOUGHT
Former Salesman for Curtis
Organization Files Suit
for Injunction.

An injunction to prevent the sale OF
stock In the New Mexico Gold Pro-
ducers Association, headed by former
Vice President Charles Curtis, is asked
in a suit filed yesterday In the District
Supreme Court.
The petition. filed by Charles Tay-
lor of the Kennedy-Warren Apartments,
says approximately 100000 shares of
stock have been sold to many confiding
stockholders for about $500 900 and that
q very small portion of this sum has
been used in the exploitation of the
mining project for which the corpora
ton was organized" A considerable
portion of the stock is said to have been
sold to investors in Washington.
Taylor. through Attorney Frank E.
Elder, Identifies himself as a former
salesman for the corporation.
Other Defendants.
Other defendants named are Repre-
sentative James A. Freer of Wisconsin:
his son, Philip Frear; Leslie Harris Of
Kansas City, Mo-, and the Munsey
Trust Co.
, The suit recites that in March. 1881,
Harris and several associates took over
q lease of certain desert lands in New
Mexico said to contain gold in paying
quantities. The gold supposedly was
obtainable through dredging operations.
Taylor said that on July is, 1881. he
was engaged by Harris to sell stock in
the corporation, which was to be or
ganized later.
Under the terms of the agreement,
the suit says. Harris was to give Tay-
lor 10 shares of stock for each share
sold by him. It was understood. the
suit alleges. that Taylor might offer
any portion Of the 10 bonus shares to
prospective purchasers OF one share as
an inducement to effect the sale. Tay-
lor says that under this agreement he
sold 10000 shares of stock, giving the
purchasers an additional $4,000 shares.
He says he IS entitled to the other
$4,000 shares of bonus stock, but has
been unable to secure them.
!; Raised Other Funds.
Taylor says the corporation was or
the stock he sold and that he continued
the sale Of stock under the original
agreement
After the corporation had been
formed, the suit continues. part Of the
funds derived from the sale OF stock
were dissipated by Harris" who con-
tinued as promoter Of the corpora
ton. His suit says 1t thereby became
necessary to have other funds to con-
duct the business Of the corporation
and that he produced these funds
through the further sale of stock on
purely commission basis. Taylor says
he acted in good faith in all sales.
! Subsequently, the suit says, Harris
! and Philip Frear entered into an ar
rangement to raise additional funds
: through the sale of stock so sufficient
{ progress In the work Of extracting gold
from the property might be made to
meet the requirements OF lease to
(: the property held by Harris. Taylor
asserts on information and belief that
this lease was conditionally assigned 10
the defendent corporation.
. Charges Secret AgreemehA,
+. On August is, 1898. the suit alleges.
Philip Ftear, in Taylor's presence, sald
Harris was "a crook and that he had
: "a strangle hold on the corporation
but that the officers and directors OF
the corporation had been kept IN the
: dark. ~" Taylor asserts in his suit, how
ever, that there is a secret understand
: lIlR DCtWSSu x1dIl 10 d1lo imp ASS~.
which Is "inimical to the interests OF
the CORPORATION and its legitimate stock
holders"
Taylor says Harris assigned the lease
to the corporation in exchange Tor l.
100000 shares Of stock. part OF which
was to be sold and the money used IN
the purchase Of equipment.
! The plaintiff asserts the stock re-
served by Harris was placed In trust
under q trust agreement, with James
|. A. Frear as trustee.
Taylor says he believes soc, 900 shares
OF this stock, under the terms OF the
trust agreement, were to be turned over
to Harris and his associates upon the
completion Of certain stages Of work
in the mining project. He alleges,
however, that notwithstanding the pro-
.. visions Of the trust agreement, Harris
and his associates already have come
into possession Of the 100000 shares
: of stock. The plaintiff says that one Of
. Harris associates already has sold 100,-
: 900 shares Of the stock to Philip Frear,
and that this stock Is now being offered
to present stockholders at $3.50 share,
Asks for Accounting.
= The suit asks that the shares of stock
now held by James A. Frear as trustee
be declared to be held in trust for the
benefit Of Taylor and other parties hav-
ing legitimate claim to 1t. The court
also Is asked to remove James A. Frear
as trustee for the reason that he has
IN inconsistent interest in the trust
estate.
It Is requested that Philip Frear and
his associates, if any, be required to
trender complete accounting Of all
stock sold, the price at which it was
sold and the disposition made Of the
proceeds from the sale. It is further
asked that Philip Frear and his asso-
'ciates be enjoined from selling or Offer
ing for sale any of the stock Of the
corporation pending q final hearing In
thiS case.
Likewise, 1t Is asked that all officers
OF the corporation be enjoined from
transferring, selling or otherwise dis
posing Of any stock pending an audit
OF the books Of the corporation
Although the Munsey Trust Co. was
not involved in the transactions, the
suit asks that the bank be enjoined
from uttering any checks drawn against
an account 1t is said to carry in the
name of Philip Frear. The caption of
the suit directed that a copy be served
on Mr.. Curtis, as president Of the cor
poratton. His address was given as the
6horeham Building
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