This affiant D. G. Scofield being first duly sworn says:

I am one the Directors of the said debt corporation, and I acted for and on behalf of F. B. Taylor in purchase herein after named of the premises mentioned in the complaint. As I allege on information and belief, the premises mentioned in the complaint were on the day [blank] 1865, unsurveyed lands belonging to the United States and more valuable for mineral than for agricultural purposes, that on said day the said lands together with others adjoining were located on mineral lands in the name of the plaintiff herein and Sanford Lyon, Juan Forster and Pio Pico, the plaintiffs, being entitled together under said locations to an undivided 3/7 and the others each to a like interest of 1/7 in said premises. That prior to the execution of this agreement made with Denton and described in the complaint, the said Lyon conveyed ¼ of his interest in said premises to debt Leaming and that on and prior to the [blank] day of October 1876 the said Taylor purchased and then was conveyed to him the interests of said Lyon, Leaming, Juan Forster and F.P. Forster, and also the equitable interest of Pio Pico as well as their interest in and under said agreement. That in this way said Beale and Baker became the owners of an undivided interest of 3/7 of said property, said Taylor of a like interest of 3/7, and also the equitable interest in the remaining 1/7 which interest of the said Taylor extended not only the premises but also to the agreement.

I further state that said Taylor has assented to the said agreement and has given his consent and permission that said Corporation continue in possession, but has notified in to render to him his proportion of the oil reserved in said agreement, namely 4/7 of 1/8 of the total product of the four wells mentioned in said agreement, and has notified said Corporation not to deliver any part of said 4/7 to the plaintiffs herein.

I state further that no conspiracy whatever ever existed between said Corporation and said Taylor that said Taylor simply purchased the interests of certain tenants in common in said property as I am advised he had a perfect right to do.

In 1864 I went to the oil regions of Pennsylvania and engaged actively in the oil business for two years and giving my entire time to the business. During this time I owned interests in wells and operated and managed the same and was extensively engaged in the management and operation of oil and oil property. In 1870, I came to the State of California and since then have been continually engaged with the exception of seven months to wit: from January 1876 to September 1876, and very extensively in the oil trade on the Pacific Coast and I believe I am as conversant with the oil trade as any person in the State of California.

Shortly after the organization of said Corporation, its superintendant of wells, Mr. Mentry, furnished a list of articles and machinery which he deemed necessary for the proper operation of the oil wells mentioned in said complaint. This list embraced all the tools which was supposed to meet every contingency and which I deemed complete for all purposes. Under the direction of said Company, I proceeded to the Eastern States and purchased all the articles on said list and the company entered vigorously upon the prosecution of the work under said agreement.

The said Mentry had been recommended very highly to said company and when I went to the Eastern States, I made special inquiries concerning his reputation and character and found that they were in every respect first class, and that he had a reputation in the oil regions in Pennsylvania as an unusually careful and skillful locator, driller, and general operator of oil wells and the handling of the products of the same. In fact, I was informed by some of the leading firms throughout Pennsylvania, to wit: Stewart Oils of Titusville, Taylor Oils of Petrolia, and Vandergrift & Donnay of Oil City, that they regarded said Mentry as one of the best men for drilling and operating oil wells and handling oil that had ever been in Pennsylvania, and that they did not believe any other person of his qualifications in those respects ever came to the Pacific Coast.

I have been actively engaged in the management of the affairs of said company since September 1876 and have been its medium of communications with and I know that said company having full confidence in the ability and integrity of said Mentry have wholly entrusted the management and control of the oil wells of the Pico Claim to him and instructed him to operate the same under and in accordance with said agreement.

Since said September 1876, I have visited said oil wells frequently being there nearly every month and frequently visiting them daily and have given them great personal attention as said corporation relied on my judgment in the management of their affairs and I have been an active manager thereof.

I am convinced that said premises and oil wells have been at all time by said corporation operated and used in a workmanlike and skillful manner and that nothing has been done to injure said wells or property, or to check, lessen or suppress the flow of oil of either of them. Said company has always furnished said Mentry all the appliances he asked for in the operation of said wells and in fact, have spent large sums of money in the development of said property.

I am connected with the firm, dealing most extensively in oil matters on the Pacific Coast and am fully acquainted with the oil trade on the Pacific Coast and in the United States. The market for crude oil is exceedingly limited in California and on the Pacific Coast and I do not believe outside the consumption by the refineries of said defendant’s corporation the amount of crude petroleum sold in market of all the country west of the Rocky Mountains exceeds 50 barrels per month. These use but two oil refineries on the Pacific Coast. Both of these belong to said defendant corporation and a refinery of sufficient capacity to refine the product of said Pico wells could not be constructed without the expenditure of thousands of dollars.

The competition of the trade on the Pacific Coast in refined oils is very great owing to the low price of oil in the Easter States. Said Defendant Corporation has been compelled to close the refinery in Ventura County and will be compelled to close the one at Andrew’s Station unless permitted to work under said agreement, said refinery being constructed with special reference to work under said agreement. If a receiver be appointed, the only way as I verily believe that the oil produced at said wells over and above the amount of crude oil consumed in the market, say 50 barrels per month, can be preserved will be to tank it. As there is no market above said 50 barrels on the Pacific Coast as above stated and the cost of transporting it to a market outside such coast would be greater than the oil is worth at such market.

I have read the affidavit of C. A. Mentry herein and fully concur with him in his statements respecting costs of tankage and deterioration of oil tanked and I state this from practical tests I have made with the oil and the costs of tanks actually constructed for the company and I state positively that I would not tank said oil in the vicinity of the Pico wells and hold it for four months if said oil were presented to me without cost. The great deterioration of oil in this climate is abundantly proven by instances which have come under my observation in Ventura and Los Angeles Counties. From this it will be seen, and I verily believe, that the result of placing this property in the hands of a receiver will be either to entirely waste and destroy the product of the wells and greatly injure them or to tank the oil at a cost of $50 or $75 per day and if said oil be tanked for two months or more, would be worth less than the production of the oil and tankage cost.

The said corporation has property in the state of California subject to execution more than sufficient to satisfy any judgments claimed against them in this suit or in the action at law mentioned in the complaint herein and in addition to this, the stockholders of said company who would be responsible for such claims have property in this state subject to execution exceeding in value $1,000,000 one million of dollars.

D. G. Scofield

June 11, 1878