Agnew v. Daugherty

SHAW, C. J.

The applicant has filed a petition for a writ of prohibition directed to Edwin M. Daugherty, Commissioner of Corporations of the State of California, to prohibit and enjoin him from proceeding in the matter of the trust, described in the petition, and to require the petitioner to discontinue the sale or negotiation of the trust certificates and other securities mentioned in the trust set forth in the petition, until he has received a certificate of the corporation commissioner authorizing him to do so.

The petition sets forth that he has acquired a lease and option of certain mining property and that he has conveyed

[447]

the same to certain persons as trustees under a contract in writing with them defining the trust.

The terms of the trust are not set forth, as such, but in his declaration, which is made a part of his petition, he states that he has created a trust, designating it as the “La Plata Smelting Company,” and has appointed William H. Test, H. E. Williams and W. C. Randall as trustees thereof, and has empowered them as such trustees to receive all payments that may be due to him for interests in the lease, and to hold the same and all funds received from the sale of the product or the operation of said lease, as a trust fund for the holders of the several interest certificates, and disburse, use and manage the same as such trustees.

When they have received a sufficient amount from the sale of interests they shall start operations, including the work and development of the mines on the property. The “interests” are 3000 in number. When 1500, or so many of that number as may be necessary, are sold he is to execute to the said trustees a proper assignment of said lease. The remaining 1500 of the “interests” are to be retained, and the petitioner reserves the right to hold them for himself and his associates as a consideration for the transfer of the property to be conveyed in trust, namely, of the lease and option aforesaid. Share certificates conveying to "the holder thereof l/3000ths part of the said property and assets of said trust are to be issued by the petitioner to each purchaser of an “interest” and they shall have equal rights to the profits of the enterprise and are to be entitled to equal benefits therein. Certificates may be transferred only upon the books of the said Agnew until enough of the “interests” are sold to justify him in conveying to said trustees the lease and options and the proper license to operate under certain letters patent in connection with said lease. Thereafter the trustees agree to keep such transfer books.