The San Francisco Call. Newspaper, August 4, 1895, Page 12

12 THE SAN RRANCISCO CALL, SUNDAY, AUGUST 4, 1895. THE HALE AND NORCROSS SUIT DECIDED. Supreme Court’s Opin~ jon in the Famous Mining Case. NEW TRIAL MAYFOLLOW. Hayward, Hobart and Levyb Found Guilty of Conspiracy as Charged. ALLEGATIONS OF FRAUD TRUE. Three Defendants Must Pay Over $200,000—The Others to Be Retrled. Fhe famous Hale & Norcross mining suit, by which M. W. Fox for the stockholders of the company sought to recover millions from the directors and managers of the concern, was decided by the Supreme Court yesterday. The findings are partly favorable to the plaintiff and partly to the defendants. The main point of the decision is that | the court finds tbe accusations of fraud | against the defendants—Hayward, Hobart | and Levy—sustained, and they are denied a new trial and ordered to pay $210,197 50 to the plaintiff. Just as important is the grantingof a new trial to the other defendants except the Nevada Mill and Milling Company, and the degision that the further claim for $§789,618 cannot be determined to be correct from the testimony taken. or seven years ago a number of stockholders of the Hale & Norcross mine began to suspect, from rumors that floated down from the mine from time to time, that all was not going as it should and an investigation was set on foot. The stockholders ~were soon convinced | that a tematic plan to Tob | the mine w being carried out, and | in order to make a determined effort to | gain what they considered their rights an association was formed and money raised for the purpose. Agents were sent to the mine and a mass of evidence regarding the manner in which car sample and pulp assays had been juggled was gathered. In August, 1890, M, W. Fox having been chosen by the association to begin suit wrote to the directors stating that he was in possession of information that proved conclusively that for three years prior to that time the stockholders had been sys- tematically robbed by a ring composed of men in control of thé minesand those in the management of the mills where the ores were reduced. He said that over $2,000,000 had been taken from the mine from which the stock- | holders had derived no benefit. He de- manded restitution in that amount, and threatened suit if an accounting was not given at once. was expected the directors refused to | give up the funds, and some time later the | great suit was filed. To say that itcreated | a sensation in the mining stock world of | Pine and Leidesdorff streets would be put- ting it mildly. A flurry in the market was the immediate result, the stock of the Hale & Norcross gaining more strength than it had for some time previous. As the case dragged along through the courts, how- ever, the excitement died out, and Nor- cross took its old place in the line of de- pressed shares. W. T. Baggett, an attorney who wasa member of the association, was chosen to fight the case. He began a stubborn legal battle with the talent employed by the de- fendants. The case was contested point | by point in the Superior Court and every | effort made by the defense to have the case thrown out of court on technical grounds. The plans of the association at- torney had been well laid, however, and a verdict was finally secured in Judge Heb- bard’s court for the full amount asked. On a new trial being denied by the lower court the matter was carried into the Supreme Court. Owing to the magni- tude and importance of the case and the immense volume of technical testimony to be gone through the case rested with the higher court for some time, though the decision has been expected for many weeks. The aecision throws the bulk of the case back into the lower court, where the larger portion of the battle will be waged over again. The defendants who are denied a new trial are expected to carry their case to the highest tribunal in the land. THE DECISION RENDERED. A Lengthy Document Written by Chief Justice Beatty—A Concurrent Opinion. STATEMENT OF THE CASE. The decision -is, entitled “M. W. Fox, respondent, vs. the Hale & Norcross Silver Mining Company (a corporation), defend- ant, and others, appellants,” and in the beginning sets forth that the Hale & Nor- cross Mining Company is a corporation organized under the laws of California, with its principal piace of business in San Francisco. Itisthe owner of one of the mining claims of the Comstock lode in Nevada, where for many years it has been engaged in the business of mining gold and silver bearing ores. The plaintiff, M. ‘W. Fox, since 1887 has been a stockholder in the corporation. In August, 1890, he addressed a communication to the directors charging, in substance, that for three years tiie stockholders had been systematically plundered and their property: stolen to the amount of more than $2,000,- 000 by fraudulent conspiracy between these directors.and the owners or lesseeg of the mills employed in reducing the.ore extracted from the Hale & Norcross mines. The devices, so the decision reads, resorted to in furtherance of the object of this con- spiracy were the mixture of worthless rock with high-grade ores, so as to obscure | their value, and at the same increase the quantity of material to be put through the mills: also the concealment from stock- holders of the average value of ores'as thus reduced; a frandulent system of milling by which only a small portion of the pre- clous metals contained in the ores-was re- turned to the company, and a disposition of the stolen bullion in’a manner intended to conceal theft. He further claimed that he was prepared to furnish evidence of the truth of his charges, and demanded that the directors should institute an action in the proper courtin the name of the company to re- cover from the conspirators the full amount of its losses. THE PLAINTIFF BEGAN SUIT. . The proceeding are then reviewed. Noth- ing was done by the directors, so the plain- tiff commenced action against all the di- rectors who had served from 1887 to 1890 in- clusi¥e and the owners of the several mills in which the ores were reduced. The sum- mons was not served on the mill-owners, | trial November 13, 1891. him and’ the ‘other directors. and the other defendants filed their answer &nd on the issues the cause was brought to trial During th lition the complaint wasamended by the a 1 of some new allegations, and on March G, 1892, the close of the trial, a final amended complaint was filed for.the purpose of con- forming the proceeding to the proofs. All the material allegations of- these amended complaints were denied or treated by the court as denicd. Orn June 11, 1892, the Superior Court filed its findings and entered 1ts decree in favor of plaintiff for the benefit of the corpo- ration and against the other defendants, except Hobart, a mill-owner, who died June 2. As against Alvinza Heyward and the Nevada mill and the Nevada Miil and Mining Company and Levy, who had been president of the Hale & Norcross Com- pany during the whole period from 1887 90" inclusive, there were several judg- ments for the entire amount of the com- pany’s losses estimated at $1,011,835. Exe- cution was directed to issue upon these judgments. After further reviewing the history of the celebrated case in detail and at great length, noting that ths aggre- gate losses claimed amounted to $2,100,000, which was mostly divided among the di- rectors, the decision recites the various findings of the Superior Court: That $4 50 a ton was the reasonable price for milling ore and $7 was fraudulent, and in gen- eral terms it was found that the defend- ants, including the directors of the Hale & Norcross Company, received and appropri- the | alleged is not sustained, except so -far as the; were made participants by a culpable negli- genee which enabled others to consummate such frauds, The next fins . attacked is that in which it is found that’ Hayward, Hobart and. the Nevada Mill and Mining Comfu\ny controlled and managed the Mcxican mill. The evidénce ‘on this point is conflicting, and I think the fact—clearly - proyed—that ~ Hayward and Hobart paid'to Levy one-eighth share of the profits on the ¢rishing at;the Mexican mill in the same manner and at the same time that they paid him on_sccount of the crushing at the Nevada mill is sufficient to sustain the | finding as to them. Their payments, however, are not evidence against ‘the mill company, and T cannot sec that there s any evidence to sustain the finding as against it. X LEVY DID AS HE PLEASED. The claim that there is no evidence to sustain the finding that Hayward, Hobart and the Nevada mill controlled and ope- rated the Vivian mill is sustained. The finding as to the control of the Vivian mill is held as contrary to the evidence and un- warranted by the complaint. The finding that Hayward, Hobart and the Nevada Mill Company, in conjunction with the other defendants, controlled all the business of the Hale & Norcross Com- pany is sustained, inasmuch as the evi- | dence fully warrants the conclusion that a | majority of the directors were simply pas- sive and Leyy did as he pleased. The de- cision continues: The finding, therefore, as to participation by the mill-owners in the control of the mining company may be legitimately drawn from the | existence of an unlawful contract for a divis- ion of the profits of the milling, or from the manner in which the ore was milled, or from any inadequacy of returhs of bullion, or neglect of proper precautions in behalf of the mining comslny, is to be considered as a fact proved. Undoubiedly the existence of the con- M, W. FOX, LEADING PLAINTIFF IN THE HALE & NORCROSS SUIT [From a photograph.) ated the entire amount of which the cor- poration and its stockbolders were de- frauded, namely, $1,011,835. The decision continues: HAYWARD'S LIABILITY ESTABLISHED. In some particulars the findings go beyond the allegations of the complaint. It isnot al- leged, but is found that Hayward and Hobart and the other coaspirators controlled and di- rected the business and affairs of the Vivian mill, as_well as of the Nevada and Mexican mills. The defendants, in support of their ap- peal from the judgment, contend that they are erroneous in form and substence, and in sup- port of their appeal from the order denying a new trial, contend that the findings of the Su- perior Court are against the evidence, and are vitiated by numerous errors committed in the course of the trial in ruling upon opjections to the evidence and upon other matters. The most important questions which we are | thus called upon to determine relate to certain legal propositions as to which our decision must become & precedent in future contro- versies, but the questions which have been most_elaborately discussed by counsel, and which go most ectly to the merits of this case, relate to the sufficiency of the evidence to sustain the findings of the Superior Court. It is contended that there is no evidence to support the findings as to the alleged conspir: acy to defraud the Hale & Norcross Company. So far as the defendants Hayward and the other mill-owners are concerned, it does not seem to be of much consequence whether these find- ings can be sustained in their full extent or not, since their liability is sufficiently estab- lished by other and independent findings. But with respect to the liability of the directors of the Hale & Norcross Company, the findings as to their active participation in the conspiracy are very material. Upon this point, the decision goes on to say, the evidence which most nearly affects the directors is that which relates to the@ election. They were elected by the ma- i‘onty vote held by stockbrokers in San ‘rancisco n{:parem y as trustees for owners of the stock, but Justice Beatty remarks that it is not necessary for him to decide who bad the strict legal right to vote the stock so held.- When the election of 1887 was approaching. Havward, Hobart and other stockholders of the Nevada Mill and Mining Company, who were considerable owners of the stock in the Hale & Norcross Company, determined to -contest: with Levy for the control of the board. .A com- | promise was, however, effected, resulting in the election off a board-acceptable to both. parties and the retention of Levy in the office of president. LEVY'S SECRET PERCENTAGE.. Levy was to receive one-eighth of the profit on the crushing of‘all Hale & Nor- cross -ores milled by.them. This agree- ment was secret, except to Levy and his partner, Hoeflich. Sell and Bridge, who ceased to be directors in March, 1888, knew of it after that time, but there is no direct evidence that they had such knowledge while in office. - _ None of the directors had any substan- tial interest in the corporation. A ma- jority of them owned about five or ten shares, respectively, out of a total of 112,- 000 shares, and these trifling amounts of stock had, in several instances, been trans- ferred to them by Levy or the mill-owners, for the express purpose of qualifying to serve. They seem, one and all, to have intrusted the management of the entire business to Levy and tothe superintendent of the mine, and, continues the decision: 1f these officers by abuse of their.trust caused the loss and damage to the mining company which the court has found, the engence WAar- rants the conclusion that the directors were at least gumlxolflgmu negligence. But, except as to Levy, Hoeflich, Sell and Bridge, I do not think there is any evidence that the directors knew of the unlawful agreement between Levy and the mill-owners, or, that they were active participants in the conspiracy and frauds al- leged in the complaint. That this: was the view of the Judge of the Superior Cofirt seems to follow, not only from his decision- upon the separate motion of the defendant Wheeler for a new trial, but from the : amount of the several judgments rendered . against In_denying Wheeler's motion, the Judge declared in effect that he did not beliéve him- to have any share in the frauds upon the compeny, but he was held reironllhle for the consequence of his gross negligence—that is, he was held Jiable for the excessive price of $2 50 per ton paid for milling the ore reduced while he was a direc- tor. The same judgment was rendered against all the other directors except Levy, against whom there was a several judgment for the cntire loss found to have been sustained by the Hale & Norcross Company. Thisdiscrimination shows that notwithstand- ing the sweeping language of some of the find. ings, the Superior Judge did not really intend to convict the other directors of the fraudulent conspiracy charged, for if he had found them equally guilty, they would have been liable to the same extent as Levy. For these reasons I think it must be held that the finding as to the directors other than Levy that they were participants in the frauds | tract supplied a motive to both parties to in- crease the amount of milling by the extraction of low-grade ores, and it may fairly be argued that it also afforded an inducement to Levy to connive at a careless and inefficient system of milling by which a larger number of tons would be milled at the same cost, &nd consequently at a larger profit. There follows an exhaustive description of mining and milling ores on the Com- stock. Justice Beatty returns to the legal aspect of the case at an interesting point, | where he saysthe evidence shows that the foreman of the Hale & Norcross mine was in effect instructed to mine and send to the mill ore assaying (by car sample) as low as $12 a ton—$14, it was stated at the | trial, was the lowest on which a mine could | be conducted with profit. And this re- | ceives comment a8 follows: i CONSPIRCAY TO MINE WORTHLESS ORE. | _Inview of these facts, which show that the practice and the intention was to send to the | mill all ores assaying as high as $12 per ton, | and in view of the understanding that the | mills were to receive not merely the bare cost | of working the ores, but $2 50 in addition to the “cost for the use of the mills, it cannot be said that the finding of a conspiracy to mine | worthless ore is without any support in the vidence. Upon the whole I think the evi- | dence sufficient to sustain the finding. The next, and by farthe most important ex- ception to the decision of the Superior Court, relates to the various findings to the effect that Hayward, Hobart and Levy and other de- fendants worked the ores of the Hale & Nor- cross Company by & frandulent system of im- perfect milling bv which a large portion of iheir value was left in the slimes, tailings and residues of the mills. The principal evidence in support of this finding consists of the car-sam- Dle assays which, it is contended, is confirmed by proof of certain irregular and suspicious transactions between the managers of the mi! | and the Carson mint, as well as some other cir- cumstances of Jike import. The contention of the appellants that the Superior Court is excessive in its estimate to the extent of $34,427 is found to be right, even when taking the car-sample assays as a criferion of the amount of gold and_silver in the ores and sent to the mills. The appellants, how- ever, contend that the car-sample assays do | not, ‘as found by the court, correctly show the trué value of the ores. We now come to the pivotal point of the case—the value of the car- | sample ‘assay as a criterion of the value of the ore. The testimony is without conflict fhat, a cording to ihe general custom of dealing be- tween the miners on the Comstock lode and the managers and owners of custom-mills, the battery samples are and the car samples are not regarded as the true index of the value of the ores. There is also no conflict in the evi- dence that the car samples always run above the true value of the ore. This fact was clearly proven when the plaintiff closed his case in chief by the testimony of his own witness, Mr. John Mackay, and it wwas much more fully and amply proved by a number of witnesses sworn on behalf of the defendants. THE CONFLICTING EVIDENCE. The conflict in the evidence in regard to the disparity between the average assay of the car samples and the real value of the ore is quite exhaustively analyzed, and after quofln%{l]l the testimony that the value of the Hale & Norcross ores is cor- rectly shown by car-sample assays Justice Beatty continues as follows: 1 have only to repeat that in my opinion it does not raise a substantial conflict with the evidence of the various witnesses who testified that the car-sample assay always exaggerates the value of the ore. It remains only to notice the legitimate ergument of counsel for re- spondent, that, {f the fact is as these witnesses claim, there ought to be some rational explan- ation of it. I quite agree with counsel on this yoinl that there must be some cause of uni- orm operation to bring about the invariable result that the average of the car-sample assay always goes above theé re: lue of the ore; and that if such cause exists some one ought to be able to point it out. I think, however, a perfectly rational and probablg explanation is 10 be found in the evidence. If my views as to the effect of the evidence on this point are correct, it follows that there is no basis left for the estimate of the court as to the amount of damage sustained by the Hale & Noreross ComPlny by reason of fraudulent or imperfect milling. It has already been shown that. even on the theory that those ores act- uaily contained the amount of gold and silver indicated by the car-sample Mll‘\;!, their total value was “overestimated in thefindings by more than $34,000. 1f this is deducted, and a further deduction of $10 a ton _(according to the estimate of ~ Mr. [ackay, the plaintif’s own witness) is made on account of the difference between the car- sample assays and the actubl value of the ores, it reduces the estimate of the Superior Court over $900,000 on_the mgfhnl value of the ores and makes a corresponding reduction in the amount of bullion supposed to have been lost or diverted; or, in other words, since the defendanis were held for about 75 per cent of the gold and silver supposed to have been contained in the ore the judgment would require to_be reduced by nearly $700,000. donot add' the wiiole of the sup] loss at the Vivian mill; because the principal error in lovervnhunon of the ores according to the ca_r-nmglel relates to ores sent to the Vivian mill, and the full reduction on that account has already been made. REASONS FOR A NEW TRIAL. The Justice assumes in all his_estimates that 75 per cent of the assay value of the oresis a proper return in bullion to be made at the mill, and the lower court placed it at 74 6-10 per cent. Probably the result of the assays from the samples selected from the wagonsin those days as testified to by Mr. Mackay is a nearer ap- gmximnuon to the true value of the ores than Y the methods of the present day. But, sup- posing it was not, the ore of greater value would have been correspondingly more valu- able. All that Mr. Mackay’s cvidence proves is that the millers in early (imes felt they could afford to purchase ores of the class then mined upon a chance of getting out 80 per cent of the precious metals. It is not inconsistent with his opinion that 75 per cent of the battery sample is now a fair return. In Mr. Lyman’s evidence he does not regard itas evidence of frand if he got only 75 per cent. Soif the defendants were held for even 65 per cent of the cm'-sum‘ple assay the judg- ment on that basis would be more than $350,000 less than that which was actually Tendcred. It is doubtful if the claim of the other serious error in milling arising out of the disregard by the Superior Court of the discount on silver bullion iz elearly dem- onstrated by evidence. If the court com- puted the 10ss on the missing silver bullion at, its standard value when the actual value was at least 20 per cent below the stand- ard then it was a serious error, for there can be no doubt that a judgment for the conversion of silver bullion payable in coin should be based on coin value. The decision does not find any directevidence that car samples were made on the standard basis, $1.2929 per ounce of silver. But, however, there must be a new trial for other reasons, and itis suflicient to indicate the court’s views on proper allowance in case the assays were upon an assumed value of silver bullion different from its market value. The true method is to ascertain the actual quantity of gold and silver and what percentage should be returned by fair and hon- est milling. The difference is the damage. SEPARATE AND ADDITIONAL DAMAGES. The finding that the 'slimes and concen- trates became the property of a custom mill is like that in regard fo the mining of worthless ores, not made the basis of any award of dam- ages and rests on similar grounds. The eourt’s conclusion that, as 75 per cent of the car-sam- ple assay was & proper return,a large part of the value of these ores was improperly run into tailings, and the tailings did not become the properiy of the mill, was a correct conclu- sion from the premises. But the court gave no separate or additional damages o1 account of the value of the slimes and concentrates be- cause their value was in the 75 per cent. A claim is made on behalf of (ke respondent that the Superior Court was justified in assum- ing that the Hale & Norcross ores were of the value shown by the car-sample assays, but the contention is not supported by the doctrine as expounded in the quotaticns set forth from the celebratea ring case of Armory vs. Delamire (1 Strange, 5047) The facts do not make it applicable the milling of the Hale & Norcross ores was not in itself a wrongful act. The means by which the employment to mill them was obtained was wrongful, but the milling, if properly conduct- ed, was lawful, legitimate and necessary. The usual end only means of establishing the valueof the pulp and settler samples and assays constitute the most direct &nd trusiworthy evidence, while all other means of proof are indirect and secondary. But the evidence is that the car-sam gle assay is invariably and largely in excess of the actual value of the ore, and it is not reasonable to assume that as & basis of computation this is not holding that the respondent is bound by the battery samples or by any definite sum, but that the trial court should (fh‘e proper con- sideration to uncontradicted testimony and make such deduction as is reasonable. ASSERTIONS NOT SUBSTANTIATE! The record does not bear out the assertions of counsel as to the claim that evidence was sup- pressed by refusal to produce the Nevada Mill and Mining Company’s books, as no record was kept in them of the working of concentrates, ete., but kept in the office of the corporation. It may be & loose way of conducting business, but it is not suppression of evidence. No demand having been made upon any rurty 10 this action for the books of the Bul- ion and Exchange Bank of Carson, the officers and emple of the bank cannot be treated as spoliators of testimony. As to the mint transactions urged in the ar- gument as evidence of purloining of bullion any discussion in this opinion of the weight of such evidence as affecting improper —mill- ing in anticipation of a new trial would be out of place. The only law cited in reference to the improper keeping of re- cords of the mint—Section 3506, Revised statutes of the United States—does not make it the duty of the superintendent of the mint to note the place of production of bulifon. But there is probably some later statute requiring something of the kind, but the record also shows that a system was established which was followed by Hofer, who was only acting super- intendent of the mint. It can only be inferrea that parties sometimes deposited purchased bullion the origin of which they did not now. AS 10 the item of exorbitant charges for mill- ing the evidence and findings are so clear that nothing is left for discussion except a pure question of law. SUSTAINED BY THE EVIDENCE. The finding of the Superior Court that the cost of miiling did not exceed $4 30 per ton is fully sustained by the evidence, and it is equally certain that §4 30 was not a fair price for miiling as between miner and miller deal- ing on equal terms, and under circumstances entitling the miller to & fair compensation for the use of his mills. The question, therefore, is whether, in view of the manner in which the contract to mill these ores was obtained and executed, the mill-owners are entitled to receive anything for the use of their mills, If they are, there must be & new trial of this part of the ; if they are not, then so far at least as Levyand the mill-owners are concerned there is no need of & new trial. As to the other directors, against whom there are several judgments, th@case may be to some extent dif- erent. % According to the doctrine cited in St. Panl Distilling Company vs. Pratt, 45 Minn., 215, the fl‘PpEllflnl! contend for $7 per ton for mill- ing Comstock ores. But thiscase cannot be determined by the rule applied to cases which involve no element of misconduct, except an express agreement of a trustee to pay himself more than a reasonable yalue. The court has found that ores which would not pay for the cost of milling were intentionally mined and sent to the mills, involving certain loss to the stockholders if the current price were allowed, but no loss if the millers were limited to the actual cost of milling. Under these cir- umstances it was not inequitable to allow only the actual cost of miiling. It may be argued that the market price should be al- lowed for milling ores that had value to pay a profit on mining and milling at current Tates with a return of 75 per cent of the pulp assay. But tiie courts cannot be expected to go into very nice calculations and estimates to save (mnieu from consequences of wrongdoing. Where the intention of wrongdoing was car- ried out a court of equity is justified in apply- ing to the whole transaction the one measure of compensation, actual cost. A JUDGMENT FULLY WARRANTED. The Superior Court did not err in requiring mill-owners to account for 2 50 per ton for all ores milled, and this part of the judgment— which is erroneous onl{ so far as to the ores ‘worked at the Vivian mill-may be modified in the findingsin the record. The proper sum is 210,197 30 on ore sent to the Nevada and lexican miile. To this extent the judgment against Hayward and Levy is fully warranted. But the fact that the Nevada mill had nothin to do with the ores reduced at the Mexican mil] would require that the judgment be reduced still further. Yet this and all other errors in the proceeding affecting that corporaticn be- cone immaterial, in view of the conclusion that 1t was never brought under the jurisdic- tion of the Superior Court. The service on Eyan Williams, superintendentof the mill at \'hfiinln City, was insufficient. The directors of the Hale & Norcross Com- pany are not contended to be liable, except as to negligence, but they are not charged with negligence. Fraud and negligence, however culpable, are not the same thing. The plain- tiff has no right to demand a conviction for fraud when 1o fraud has been committed. The following provision in section 3, article XII of the constitution it is argued by counsel should be construed literally: The directors or trustees of corporations and Joint stock nssocfations shall be jointly and sever- ally liable to the creditors and stockholders for all moneys embezzled or misappropriated by the officers of such corporation or jolnt stock associa- tion Juring the term of office of such director or rustee. EXTRAVAGANCE NOT A CRIME. According to this construction some large stockholder elected a director, who had to his utmost ability guarded the interests of the compa ,confd %uvo been singled out and compelled to make good the entire loss by willtul misconduct o’n hostile board. Misappropriation means misapplication of funds entrusted to an_officer for a particular Fu?me by devoting them to some unauthor- zed purpose, and does not apply to the pey- ment of extravagant prices for services or ma- terials properly appertaiuing to the business of the corporation. 2 11 the directors had been sued for negligence only in paying too much for milling the ores, thestatute of limitations would have been a complete defense as to some angd partial as to others. The directors, other than Levy, are entitled to a new trial of the whoie issue. In construing the findings, it must be held gn Fox was a stockholder in a substantial nse, The objections to the form of judgment or judgments should have been made t0 the com- aint, s in form the judgments follow the plaint. In view of these conclusions on the main points most of the other assignments of error becom material, and points not herein perienary. disaceed seent Tikely to arise on a new trial. THE FINDINGS OF THE COURT. To summarize the above, my conclusion is :that the record sustains, or fails to sustain, the findings and conclusions of the Superior Court in the following particulars: 1. That the defendants, Hayward, Hobart and Levy, formed a fradulent combination and sgreement for mining and_milling the ores ot the Hale & Norcross Silver Mining Company, but that the other directors of the mining company were not parties to this agreement, but were merely negiigent in the Perfarmnncc of tieir duties, and are, there- ore, chargeable only with such negligence, and are not chargeable with any actual fraud. 2. That the Mexican and Nevada mills were under the control of Hayward, Hobart and the Nevada Mill and Mining Company, but that itis not shown that the Vivian mill was under their control. 3. That Hayward, Hobart and Levy, with the acquiescence and consent of the officers of the Hale & Norcross Company, controled the aifairs of that company. 4. That Hayward, Hobart and Levy, in pur- suance of their agreement aforesaid, caused & quantity of inferior and worthless ores to be extracted from the mineand to be milled, after being mixed with ores of a higher grade. 5. That the Hale & Norcross Company paid $7 per ton for milling said ores; that ihe ac- tual cost of milling the same was but §4 50 per ton; that by reason of their fraud as aforesaid, the said defendants were entitled to receive only the actual cost of milling said ore; that by reason of having been required to pay 7 per ton for milling said ores the Hale & Nor- cross Company had sustained damage to the amount of $210,197 50. 3 6. That the evidence is insufficient to sustain the finding of the court that the Hale & Nor- cross sustained damage by reason of the imper- fect milling of the ores in the amount of $759,- 618, and_that the actual emount of damage sustained thereby cannot be determined from the findings of the court. 7. That the Nevada Mill and Mining Com- pany, not having been served with process, was not before the court as a defendant. THE JUDGMENT OF THE COURT. The cause is, therefore, remanded to the Su- Perior Court’ with the’ following directions, viz.: The judgment appealed from [s set aside, and the Superior Court is directed to enter a judgment as of the date of its former judgment against Alvinza Hay- ward and H. M. Levy for the sum of $210,197 50, with interest from that date, upon the issue presented by the claim for having paid an excessive price for milling the ore in the Mexican and Nevadamiils; and upon that issue the order denying a new trial as to these ap- pellants is affirmed. As to the other appellants, except the Nevada Mill and Mining Company, the order denying a new trial as to this issue is reversed and a new trial thereon ordered. Upon the issue presented by the elaim for damages, sustained by reason of the imperfect and fraudulent milling, the order denying a new trial is sct aside as to all the appellants, and the court is di- rected, upon #he evidence already taken in the case, and such other cvidence s may be presented by either party, to make findings in accordance with the views hereinbefore expressed. Upon the amount, if any, of such damage sustained by the Hale & Norcross Company, in ad- dition to the finding of the value of the ore delivered to the mills, the court is directed to find the amount and value of the bullion that should have been re- turned therefor. The court should also find what amount of this value of the ore delivered to the mills was necessarily lost in work- ing, or would not under fair milling be separated from the baser matter; and also the amount of money, if any, re- ceived by the mills from the working or sale of the tailings or residue of the ores. Until the Nevada Mill and Mining Com- pany has been brought before the court, the court will make no trial of the issues against that company. BEATTY, C. J. ‘We concur: HARRISON, J. VAN FLEET, J. HENSHAW, J. ' TEMPLE, J. M'FARLAND, J. CONCURRING OPINION. Justice Garoutte Hands Down a Much Briefer But Comprehensive Document. Jugiice Garoutte handed down the fol-~ lowing concurring opinion: < I concur in that portion of the judg- ment which is affirmed,. but dissent from the opinion of the court wherein it is held,that the evidence {6 insufiicient to support the find- ing of fact to the effect that74.6 per cent of the car sample assay is a fair_return to the Hale & Norcross Compary. The actnal return to the mining company by the milling' company was but 52 per cent of the car samyle assay. This was not enough. No agreement or citation of fact is necessary to prove it.~ Everybody knows it. uestion is, How much bullion in excess of the 32 ver cent should bave been returned to ‘the mining company under the. evidence found in the recora? There is the rub, . Mr. lo'man. superintendent of the Consoli- dated Virginia and- one.of the principal wit- But the all-important ‘nesses of the defense, stated that he would hope to’get a return of 65 per cent of the car sample assay, and, if I had been -the trial Judge, upon this and ‘other evidence intreduced I should have recognized the justice of a return to the mining company of that amount at least. But the true role to be irivoked by a Justice of this court in determining the sufficiency of:the evi- dence_to support s finding of fact made by a trial court is not what such Justice would have done upon the evidence if sitting:asa trial Judge, but rather is there a.substantial .con- flict in the evidence. And - the ques- tion of & substantial conflict is in no way dependent upon the great number of witnesses on one side and the limited num- ber upon the other, for it is often the case that one shall prevail against the many. For the foregoing reasons and many others nnneces- sary 1o detaii, in a case like this the finding of a fact by a trial court should not be set aside without the soundest and most convineing reasons. The opposite conclusion should be so plain thata mere statement of the evidence would indicate it. It should not be necessary to re- sort to an elaborate and complex analysis of the evidence in detail to prove it. The witness Holden testifies that the mining company should have haa areturn of 85 per cent upon the basis of the pulp sample assay. If we allow a variation of 1 er cent between the car sample assay and the pulp sample assay, then under the testimony there should huve been a return to the mining company of about 76.5 per cent of the car sample assay. It is attempted to reduce their percentage by a claim of allowance or discount for moisture and evaporation. There uEpenrs to have been but little importance attached to this question of moisture during the progress of the trial, and all indications point to it as somewhat of an afterthought. But, however that may be, I think a slight reduction would satisiy its claims; and, in view of this testimony, taken in connection with that of Mr. Mackay and others, I think there is sufficient evidence in the record to support the finding which the majoyity of the court hold to be without support. GAROUTTE, J. A Family Jar. GREAT AMERICAN IMPORTING TEA CO.'S Stores are selling MASON FRUIT JARS At greatly reduced prices. 1 dozen jars, pints, in box . 1 dozen jars, quarts, in box 1 dozen jars, half gailons, in box. Inspect our Improved Jelly Glasses, .50¢ —————— Tacoma Will Weigh Gold. The Tacoma Custom-house will in future weigh all gold coin presented in payment of duties instead of counting it, as hereto- fore. Considerable quantities of gold coin from this and other custom-houses in the district have lately been rejected by the United States depository as being under weight, and it is to guard against lossfrom this cause that the new system has been adopted. In English financial institutions the custom of weighing all gold coin is universal. The coin is never touched by the hand, but is shoveled off the counter into the scales with a metal scoop, and emptied from the scales into bags. Much time is saved in the avoidance of counting, and the scale not only infallibly indicates the number of coins, but also the presence of any counterfeit or lightweight pieces. B The largest tomb in the world is the pyramid of Cheops, which is 461 feet high and covers thirteen acres. ——— Furnrrure moved, stored, packed and shipped at low rates by Morton Special De- livery, 650 Market street (Chronicle build- ing) and 408 Taylor street. P NEW TO-DAY—DRY GOODS. e BLACK GOODSDEPARRMENT! - EFATL.I. NOVELTIES FOR 1895. We take pleasure in announcing the first arrival of BLACK DRESS FABRICS FOR FALL 1895 and direct attention to the choice styles and magnificent assortment now on exhibition, ail of which will be offered at Unusually Low Prices! Priestly’s . Black INovelties! We will offer this week 5 cases PRIEST= LY’S BLACK NOVELTY DRESS FABRICS, in 25 different designs, - 35125 Dress Pattern. Price 100 pieces GENUINE ENGLISH KAISAR CLOTH, full 42 inches wide, ol 50[: per Yard. Write for samples of above goods. Ot . ‘Q_QRPORA by > Y1892, - » ~ 111, 118, 115, 117, 119, 121 POST STREET. WORK OF THE GRANDJURY, Why Police Judge Campbell Was Taken Before the - Tribunal. An Effort to Clear the Sidewalks of Obstructions—The In- heritance Tax. When .the present Grand Jury gets through with City officers, ex-City officers, special privileges, judicial delinquencies ‘and police inefliciencies this town will wonder that the general shake-up was so long delayed. It may please the jury to make no report whatever at the conclusion of the term. Iis action while in power will constitute its record. The plan of campaign is to go ahead and do some- thing—not to tell the public at the end of “four months what ought to be done. Friday last Police Judge Campbell was hauled up.- The jurors wanted to know why he dismissed the case against two men who were arrested last June for as- saulting a girl. There were some grievous circumstances connected with the case. Whether Judge Campbell was able to explain matters to the jury cannot be ascertained at present. He said there was testimony to show that the girl was 24 years of age and must have been a party to the crime. Ex-County Clerk Haley's case will yet be investizgated. He will be called upon to explain the allegations of neglect of his official duties, and will be asked why he did not obey the law relating to the inher- itance ta 1t is said that Haley’s neglect or utter disregard of his official responsi- bilities cost the City $250,000 in two estates. It is declared now that the Grand Jury in- tends to hold him and his bondsmen re- sponsible for official neglect. The condi- tion in _which he left the records of his office will be gone into thoroughly. Charles Sonntag was foreman of the Grand Jury twelve years ago. It is just twelve years since the sidewalks of San Francisco have been thoroughly cleared of signs, obstructions and nuisances. Heisa member of the present Grand Jury, and is accredited with having been the moving spirit in sending to the Board of Super- visors this communication : Gentlemen : The Grand Jury now in session desires to have the laws relative to street ob- structions rigidly enforced by the police, and more especiaily to cause the Temoval of sign- boards, advertising posts, projecting signs from buildings, bootblack nmr fruit stands and other nuisances on the sidewalks, which are g?!\v a disfigurement of and a disgrace to this We find that many special permits have been granted by former Boards of Supervisors to various persons to maintain lgele ob- structions, and in that way appropriate public property for private use. In order to make our work more effective we respectfully request that at your meeting to-day an order be passed revoking all such permits.” Respectfully OLIVER ELDRIDGE, Foreman. J. J. Groow, Secretary. There was a purpose in transmitting this communication early in the session, and the Supervisors probably perceived it. Following is "the text of a resolution drawn yesterday, whica will be introduced at the next regular meeting of the board: WHEREAS, A communication from the Grand Jury was filed in the office of the clerk on July 29, 1895, requesting the passage of an order revoking all permits to maintain sidewalk ob- structions of any kind; therefore Resolved, That all petitions awaiting the ac- tion of the board for the right to erector main- tain wire signs, also for the privilege of erect- ingor meintaining any signs, bulletin-boards, etc., of whatsoever kind, character or descrip- tion, to be placed on or projected over the side- Walk or street, in contravention of section 9 of order 1588, be,and the same are, hereby de- nied; that hereafter all applications for such permits be refused and that all privileges of 1ike character heretofore granted be, and the same are, hereby revoked; further Resolved, That the Chief of Police be, and is hereby, requested to aid in the enforcement of this resolution and the orders of the board. The Grand Jury intends to make this clean-up effective. If the order of re- moval is not fully complied with at once the citizens of the town will again observe the edifying spectacle of police officers chopping down unsightly poles and tear- ing away disfiguring signs. The Grand Jury means that the City shall be made more attractive. Fast driving over the crossings is to re- ceive the attention of the Grand Jury early in the session. If the first measures proposed. to put a stop to. it prove - ineffec- tive other medsures will be adopted before the jury adjourns. The Police Commis- sioners and the Chief of Police will be called upon next week when this subject is taken up. * Police Comrhissioner Moses Gunst. will be requested to tell the Grand Jury of the means employed in the large cities of the East to protect pedestrians from the dangersof reckless driving. Police officers on duty at the chief cross. ings in the City will get new and special instructions. Indue time the Fire Department will receive attention. The observations of the jury will not beembodied in a long_report to ‘be submitted next winter. What is needed will be recommended at once. It is the purpose of the Grand Jury to do.as much ascan be done to make San Francisco a safe and delightful place to dwell in. After Forty-Two Separations. The joys of married life are differently estimated by different people, and it has been allezed that some of the sweetest pleasures come in the “making up” after familv jars. On this ground Mrs. Isaac Brewster of Monroe County, Pa., has been getting a full measure of satisfaction out of her twenty-two yearsof wedded life. In that time she has deserted her husband just forty-two times. She and Isaac would disagree about something and she would romptly go away, first to her parents and atterly to her married children. Forty- one times she was coaxed back by her dis- consolate husband, and everything was lovely for a few months each’time, until the next outbreak. One time, when they parted over a custard pie, it cost Isaac $200 and the deed toa house to get his erratic spouse back. Butnow she refuses to go back again, and the courts have been asked to appoint a guardian for the estate. Each and every pair of Royal Worcester Corsets have the full name stamped inside on the linen tape at the waist. If the full name is not thers they are not geunine Royal Worcesters. The place to buy them is at the fitting-rooms, 10 Geary st., up stairs, corner of Kearny, where they are fittod free. We can fit any form avany price and war- rant every pair. If you have not worn them you should try a pair. CHESTER F. WRIGHT, ' 10 Geary st., cor. Kearny. Interior merchants please address whol Tooms, 35 New Montgomery st., San. !‘nncmm