The obviously intended effect of this letter was to discourage other prospective subscribers to the fund; because, Smith and Davol refusing to extend their notes, other contributors to the fund were thereby warned that Smith and Davol might use their overdue notes as a means of forcing payment out of money contributed by their cocreditors. But this scheme was really worse than it then appeared to the other directors; for Smith's conditions, if accepted, would have put the entire fund into the hands of Browne, who would have used it, first, to pay the amount claimed to be due him and to the small creditors at Hart, Cal., and, second, to improve the property which subject to his contract was then owned, not by the Fosters and McCluskeys as the other directors supposed, but by Smith, Carroll, and Davol. As Smith and Davol required the entire fund to go into Browne's possession to be used only for the payment of overdue bills and for the starting and operation of the property, payments under the Foster-McCluskey contract would be defaulted, grounding a forfeiture on thirty days' notice.

Otherwise stated: If the other creditors and stockholders in this enterprise accepted the proposition of Smith and Davol, put up through director and attorney Carroll, of raising a substantial sum of money for further development of the enterprise, Smith, Davol, Browne, and Carroll were almost certain to get the entire benefit of it. If, irritated as they naturally would be by the refusal of Smith and Davol (there is some dispute as to what Carroll's apparent and disclosed attitude was), the other parties in interest refused to raise any additional money, then the situation was ripe for Smith, Carroll, Browne, and Davol to declare a forfeiture of the Foster-McCluskey contract and for Browne to bring suit on his claim for salary, buying up also, as he did with money furnished by Smith and Davol (one or both), other small claims amounting to about $1,000. Smith and Davol also agreed to furnish Browne money necessary for his litigation expenses.

In late September, 1914, Browne returned to Hart, Cal. The success or failure of the financing plan had not then been determined. On October 1st, Smith, in Providence, writes Browne in California, stating, among other things:

"In conversation with Carroll yesterday he thought it was best for you not to put on the attachment until after we find out what they are going to do. Then there will be no fault found about the three of us, but I understood that you were to see Mr. Parsons and follow out his instructions. Of course, Carroll is not familiar with the California laws and, of course, Mr. Parsons is. Carroll is going to see Welch in regard to the payment which is in default and follow it up."

This, and much more bearing in the same direction, shows that before Browne left for California definite plans had been made to use Browne's claim, through attachment proceedings, to get early possession of the mill and other removable property, and contemporaneously declare a forfeiture of the Foster-McCluskey contract.

On October 15, 1914, Carroll writes Smith, then at Webster, Mass., a letter which we quote in full:

"Providence, R. I., October 15, 1914. "Mr. Fred L. Smith, Webster, Mass.-My dear Fred: I received a copy of the letter which was mailed to you from your office last evening, setting forth the condition of affairs at Hart, California. Just as I was about to write you concerning this letter Mr. Welch came in and informed me that payment of $450.00 on the contract had been sent to the bank some time ago, the date not given, and that either yesterday or to-day, he had sent the second payment, which would be due to-day, taking the full limit of thirty days for payment. This consequently heals any breach of the contract, even though notice had been given under the provisions of the contract. I asked him where he got the money or rather, if the money sent to make these installment payments was money which would later be deducted from the subscription $12,500, and he said some of it was. He said that subscriptions or agreements to subscribe had reached something like $13,000.00 although some of the subscribers were not in a position to pay it all in immediately, but could pay it in three installments, and that further than that some of the large stockholders were willing to make their subscription 11⁄2 cents per share rather than 1 cent, as originally set forth in the subscription claim itself. I told him that the subscriptions which I knew anything about were conditioned on the whole of the sum being raised and that unless it was, he could not figure in your subscription or that of Charlie, except on the express terms of your letter which I had shown to the directors.

"He has some man in two [tow] whose name I think is Holbrook, who is working with him in the raising of $10,000.00 and, as usual, is optimistic about getting the money on the debenture note proposition. I asked him if he realized that the payment of the Jumbo contract installments did not get the company out of difficulty and if he had considered the probabilities of Mr. Browne taking any action, reminding him of Browne's statement to the directors the day before he left here. He seemed to talk as if that was not a pressing and immediate trouble, but I reminded him that Mr. Browne had stated he would consult Mr. Parsons, his attorney, on his way back and if ne was advised to protect himself by suit, that he would do so. Welch said while he did not think Browne would do it, that if he did so he felt sure that enough money could be raised to pay Browne, the Searchlight Company and other bills so as to prevent loss of the property.

"The fact of the Jumbo contract payments being made leaves the situation depending entirely on Browne's attachment, and if his severance of his connection with the company has not already been made known here, or his papers filed, it might be important for him to change his plan, and in any event, if he does not know that the payments have been made, he certainly should know by wire immediately. It does not seem probable that under the laws of any state that he can (get) a judgment immediately and without notice to the defendant, and when the writ is serve, if the company has a resident attorney for the acceptance of service, it is his duty to send a notice of that fact to the proper officers of the company and who would be obliged to engage counsel to appear for them in the ordinary travel of the case, and to conduct the trial, if there were any to be had.

"If, therefore, the matter comes up to the board, it will be necessary to select some attorney in that section, and should he be one selected by Welch, Everson or Shaw, complications might arise immediately that would delay getting possession by execution for quite a little while.

"Naturally, I presume that Senator Carr, being a stockholder and formerly transacting some business for the company will be retained and if he has been displaced by Judge Carpenter through Mr. Browne, of course his interest will be for the company and against Mr. Browne. The latter speaks of getting judgment and execution and then negotiating the same and that is something which I do not approve of.

"In the hands of some one else who might not be bound by any agreements verbal or otherwise, to which Mr. Browne is a party, their interest might be jeopardized and I would suggest therefore, that if this claim goes to judgment and there is to be any negotiation or transfer of the judgment that it be turned over to the interests here and not to some Western third party. I

believe that Everson and others, if face to face with the payment of Browne's claim or lose their interest in the property would see that it was paid, taking notes and stock, of course, for their protection. Of course, every time they do this it increases their claim as a creditor against the company, and also increases their stockholdings which might in time give them absolute control at any stockholders' meeting to elect such a board as will do their bidding.

"I am still of the opinion that when Welch tries to gather in the subscriptions that he will fail to do so, as without the subscriptions that you control he will be unable to get the requisite amount. I went over the matter of the Davol transaction with him and he still insists that he stands by the letter sent to with reference to the delivery of this stock and that Davol's failure to notify him at the expiration of four months releases this stock from the escrow. 1 told him if he persisted in this course and antagonized Mr. Davol that if anything happened to his holdings, or to the stock in this company he could charge it to this attempt to grab stock which did not belong to him. Of course, he repudiates the grab part of it, claiming it belongs to him, but I thought it was best to let him know that if he had any run in with Mr. Davol later that he himself would be to blame for tumbling the house of cards upon himself.

"One thing is very certain and that is Browne's attachment if brought to the point of the directors engaging counsel, will probably disclose the fact of the transfer of the Foster interest, but inasmuch as you will probably be here before any writ can be sent from California here I can go over that phase of the matter with you more at length and in detail. "This is all I have time to write you tonight concerning this matter. "Yours truly, Thomas A. Carroll."

This letter, apart from the abundant other evidence, compels to the conclusion that Smith, Davol, Carroll, and Browne were then in concert planning to take from the creditors and stockholders of this company all its assets, by declaring a forfeiture under the Foster and McCluskey contract and through the use of Browne's attachment proceedings based upon his claim for salary and the assignment of the Searchlight Company claim for $665.05 and the Adams claim for $290.50. Carroll, then attorney and director of the company, was also secretly advising the other conspirators as to how a speedy judgment and execution could be obtained in order to get without delay and effectually full title to all the assets of the bankrupt.

To their surprise and disappointment, the directors succeeded in raising money enough to make payments under the contract.

On October 20th, Smith telegraphed Browne that payments on the contract had been made, and that the directors were not aware of Browne's resignation or of any contemplated suit against the company. Meantime, Browne, in California, had arranged with the sheriff to attach the mill and other attachable property. Having completed his attachment, on October 21, 1914, he telegraphed President Allen that he had "terminated his services with the company on October 1st," that the Searchlight Company and the Allen Company had assigned their claims to him, and that he had attached all the personal property for $5,006. "Sheriff took possession to-day. You had better have Attorney Carr enter appearance in your behalf and save expense to company."

Browne testified that he sent this telegram on October 21st, saying that he had withdrawn as manager on October 1st, and:

"I didn't care about advising them of my plans, but I engaged the sheriff up there to attach the property. The day he arrived there I told them."

In order to keep up the pretense of being a bona fide creditor enforcing long-postponed rights, on November 2, 1914, Browne sent the directors of the company circular letter stating that he had terminated his services on October 1st and been forced to institute an attachment in order to secure the unpaid account of the Searchlight Company, George Adams, and himself.

Further light is thrown upon the relations of the parties to each other and to the corporation of which they were all creditors and of which Carroll was director and attorney and Browne general manager, by the admitted fact that about the middle of September, 1914, while Browne was in Providence, an agreement was made that Smith and Davol should pay Browne approximately ten per cent. of the profits they should make out of the Foster-McCluskey purchase after getting back the sums paid the Fosters and McCluskeys for those interests. Probably the actual agreement was made long before. But the date is immaterial; for counsel admits the agreement to have been made for dividing up the bankrupt's property while Browne was still manager and Carroll director and attorney. It thus related back to the beginning of the scheme. This arrangement was put in definite, written form in the spring or summer of 1915, after Carroll's death. After Browne's attachment there was much urgency on his part for judgment by default so that he could get immediate possession of the property. On November 19, 1914, he urged upon President Allen the uselessness of an inventory by the sheriff, "for," as he says, "unless the Big Chief Company settles my attachment suit the property will all be mine and, speaking for myself, it will be unnecessary for me. to have the inventory."

Meantime, on October 26th, at a meeting of the board of directors, Carroll, who was secretly advising Browne as to his attachment was, as attorney of the company, "instructed to communicate with Carr (the California attorney) so that the interests of the company should. be protected in any proceedings instituted by Browne."

On November 24, 1914, Smith, in Providence, writes Browne, in California, saying, inter alia:

"I saw Charley (Davol) yesterday at luncheon and he wanted to know about the payments. He, of course, is anxious to have something doing, and. of course, understands as long as the payments are met we cannot do anything as far as he and I are concerned. At the same time, I want to see Tom (Carroll) in regard to having Hooker send a telegram to the company giving them the thirty days notice and I can see no reason why these matters should be delayed. As soon as I see him I will write you in regard to what he has to say in reference to your matters."

On November 15, 1914, Browne, at Hart, writes Smith, at Providence, of the difficulties he is having in getting immediate judgment because of the fact that he (Browne) is statutory agent and cannot acknowledge service when he is party plaintiff. That he "did not think that Mr. Carroll would adopt the stalling tactics now being pursued by Attorney Carr of Los Angeles. * I am curious to know if Welch and Allen know that Charlie and you own the Jumbo group. If they do know it and do not approach Charlie and you and tell you that they are favorable to a reorganization, with an assess

* *

ment on the stock, I will be forced to conclude that they are not in their right minds."

On December 7, 1914, Smith, in Providence, acknowledges this letter. He refers to his intention to get a conveyance from Fay of the Foster interest, which Fay was still holding; that he has just come from Carroll's office and showed him (Carroll) Browne's letter of the 15th; that Carroll stated that, when the Browne matter was brought to the attention of the board of directors, he was instructed to communicate with Carr, an attorney in Los Angeles, and that he stated to Carr that "your claim was entirely just and should be paid. * * * You will see, therefore, that there is no stalling tactics being pursued so far as Mr. Carroll is concerned in this case, and, as he says, he did not select Carr as the attorney for the company nor has he advised him what procedure to adopt at that end. He further stated that if it was his case he would go ahead and get service, if not through the appearance of the local counsel, in whatever other method is prescribed by law in that State, and that is my advice to you." After further discussion as to the best method of getting immediate judgment on Browne's claim, Smith adds:

"I am asking Carroll to resign from the board of directors at the next meeting and, of course, after he has resigned, he then will be able to take up outside affairs, such as mine and others as individuals, but you must appreciate the position he has held as a director and also attorney for the company.

"I hope that you will soon be settled in Los Angeles and that things again will be going along nicely with you, but Charlie and I will have to wait until things come to a head whereby we can get possession, that is, if the payments are not made as, of course, if the payments are made we do not expect anything to happen."

There is much more in the voluminous correspondence which passed between the parties during the winter of 1914 and 1915, showing that the four were acting in constant concert in their plans to get title to the mining property and the mill thereon, using Browne's claim for salary and Carroll's influence as attorney and director as part of the means relied upon.

On January 12, 1915, Smith in Providence writes Browne in Los Angeles, saying, inter alia:

"Do not think that Davol's and my transactions have come before the bunch here as Everson was in to see Tom (Carroll) a few days ago and he is thoroughly disgusted and discouraged with the management that has been in existence for the last six months and wants to withdraw and organize a new company. I thought best to wait until after the payments were made and let the thing take its natural course. If they are default (sic) in paying, then we get possession. At the same time, of course, your hold on the property fixes you. Thought possibly that might be a good way to get a bad matter straightened out by co-operation.

"Saw Charley (Davol) last night and he always asks if I have heard anything from you. He is anxious to do something as soon as we are in power to do it. Do not get discouraged because we are not as, of course, we have to let things take their course. You will certainly hear from me just as soon as there is anything doing."

On January 18, 1915, Browne, in Los Angeles, writes Smith a long letter, in which he states that he has confidence in the property and "know we will all profit by the enterprise." He also states: