F. B. Taylor being first duly sworn deposes and says:

I am the F.B. Taylor the defendant in this action. The premises mentioned in the complaint are petroleum lands more valuable for mineral than agricultural purposes, and situated in the San Fernando Petroleum Mining District.

That as I allege on information and belief in 1865 a mining claim embracing the premises described in the complaint and other lands and being about 140 acres in extent, was located, under the mining laws, the said lands being then mineral land belonging to the United States and such location being made in the name of plaintiffs Baker and Beale, Sanford Lyon, Juan Forster, F.P. Forster, and Pio Pico; the said Baker and Beale owning an undivided interest of 60 acres out of the 140.

That in 18 [not finished on affidavit] the defendant Leaming having before that time acquired an interest of ¼ of said Lyon’s interest, which interest of said Lyon being an undivided interest of 20 acres in said premises. The said Beale and Baker and Lyon and Leaming undertook to lease to Reuben Denton the premises mentioned in the complaint under the agreement mentioned in the complaint and undertook to contract with respect to such premises as if the same belonged solely to them and, in fact, as plaintiff alleges on information and belief, at the time represented that said premises did actually belong to them.

On the [] day of 18 [not filled in on affidavit], the corporation defendant was organized, this defendant at the time having nothing to do with it, and all the right title and interest of said Denton was, by a certain conveyance and lease, conveyed and assigned to, and vested in said company. Said company thereupon took possession of the said premises under the belief (as affiant believes and states) that said premises were owned entirely by the party of the first part.

Afterwards on the [blank] day of [blank] 18[blank], the defendant purchased, and there was conveyed to him by them, all the interest of Lyon and Leaming in said premises, being an undivided interest of ¼ or 20 acres of the whole 140 acres.

This defendant has since said time purchased, and is the owner of, and there has been conveyed to him, the interest of Juan Forster and F.P. Forster, and he also owns an equitable interest of said Pio Pico, and in this way affiant is now the owner, and was long before the institution of this suit, of an undivided interest of 3/7 of said property, to which he held the legal title, and an equitable interest of one undivided 1/7 and the said Beale and Baker of the remaining 3/7.

Affiant further states on information and belief that shortly prior to the institution of this suit, the said Beale conveyed his said 1/7 interest to the said Baker.

Affiant says it is not true that he ever entered into any conspiracy with said defendant corporation for the purpose of fraudulently acquiring any property or for any purpose whatever, or in pursuance of any conspiracy, the said defendant ever acquired any interest.

He says that it is not true that he ever entered into any conspiracy or any fraudulent arrangement with said defendant corporation, nor with anyone else, but that in fact, finding that said parties held the legal title as aforesaid, he purchased the same, but that the fact that he made such purchase in no way interfered with the rights or interest of said corporation or of the plaintiff.

Affiant further states that he has, so far as is in his power, ratified the said lease and agreement described in the complaint, and has notified said defendant corporation of his willingness to permit them to continue in possession under said agreement until the expiration of the term therein mentioned, but has demanded that they render to him his proportion of the 1/8 of the oil reserved to the owners of the land.

Affiant further states that he has been since about the time he purchased said interest as stockholder and director in said company, but has never held or controlled the majority of the capital stock of said company.

That no notice or demand so far as he knows or believes requiring said company to deliver to plaintiff, and to said Sanford Lyon and Christopher Leaming the 1/8 of the oil produced from the wells described in the complaint, was ever given or made, nor was any demand for an accounting ever made upon said company, except the demand made of A.J. Bryant, President of said company, as stated in said Bryant’s affidavit, verified the seventh day of June 1878, and also a demand made upon this affiant on or about the [blank] day of [blank] 18[blank], by E. F. Beale, which demand was made as follows:

The said Beale came into affiants office and demanded a statement of the oil produced, in the name of himself and Baker, which statement was then and there furnished him, and he said Beale then and there refused to accept said statement unless the same was made out to, and in the name of said Beale and Baker alone, and exclusive of Lyon and Leaming and the other owners. The said Beale then explicitly stated that he did not care for the oil, but desired the statement made out in said form to wit: in the form of an acknowledgment that the premises were held by defendant corporation for Beale and Baker alone, and that defendant refused to make one for the company, or procure the company to make a statement in that form, such not being the fact as the company was advised that it had no right to ignore the other owners and especially the other parties to the agreement.

Affiant at that time expressly stated to said Beale that the company had always been willing, and would be willing to deliver to him and Baker, their (3/7) three sevenths of said (1/8) one eighth of the oil produced, and that the company had been notified by him as owner of the other interest, not to deliver any more oil than three sevenths (3/7) in the said one eighth (1/8) to them said Beale and Baker.

I know that said company has always been ready and willing to deliver to said Beale and Baker said three sevenths (3/7) interest of the whole one eighth.

The said corporation defendant owns 2 refineries in the state of California and other property subject to execution which are worth a large sum of money and are and will be at all time amply able to fully account to, and pay to, said Beale and Baker and each and all of them all the amounts which could be determined in any action to be due thereon. In addition to this, the stockholders of said company and who have been stockholders during the last two years last past, are men of property, the aggregate amount of their property being, as affiant verily believes, worth over one million dollars, and there can be no question about the entire responsibility of said company and stockholders to pay all demand which can be legally or equitably brought against them by said Beale or Baker.

Affiant further states that he has been an extensive oil dealer on the Pacific coast for a number of years, being engaged in the same more or less and sometimes very extensively since 1852; that he is well acquainted with the market for petroleum on this coast, and also throughout the United States; that the consumption of crude petroleum outside the refineries owned by the said defendant corporation, does not, as he verily believes, exceed on the Pacific Coast of North America fifty barrels per month; that all the crude petroleum produced in California over and above said fifty barrels, if unrefined, is practically of no value on this coast as the cost of transporting it from said wells to a place where it could be marketed would be greater than the value of the oil at said market, and that therefore independent of the refineries owned by said corporation, and without their aid, the product of the wells exceeding said fifty barrels per month would be practically worthless and really of no market value. That it would be utterly impracticable to preserve the oil now being produced at said wells in barrels, for the reason among others that the cost of the barrels would be vastly in excess of the value of the oil and the oil could not be contained in the same for any length of time; and that the only practical way to preserve said oil as it comes from the wells would be by tankage in the vicinity of the wells, or at some point where it could be conveyed to the tanks by pipes: that said tanks could not be constructed for less than seventy cents to one dollar per barrel and that said oil when placed in such tanks would rapidly deteriorate in value and within the next six months in the climate in the vicinity of the wells would become of little or no value as it would become so heavy by evaporation that it could not be refined for illuminating purposes, and could only be used for lubricating and gas purposes and there is but little or no demand for oils for lubricating and gas purposes on this coast and that in fact plaintiff would not now erect tanks and own and keep said oil for six months if said oil was given to him free of cost, as the oil at the end of that time would not be worth anything like as much as the cost of the tanks, and the tanks would be utterly valueless for any purpose except firewood, as a large amount of tanking is not necessary in operating said mines because the refinery is so close, and the oil is immediately carried down into the refinery and worked up.

That the tankage on said premises while sufficient for working the oils when the same can be carried to the refinery does not exceed 1500 barrels and that said tanks are now and have been at all times kept nearly full of oil. Affiant further states that he knows about the management of said company and that he knows that it has endeavored in all cases to work the premises and wells in a good, faithful, and workmanlike and proper manner, it being to their interest so to do as said company had seven eighths (7/8) of the total product.

The said company has endeavored to, and as affiant verily believes, has purchased the best and most suitable machinery and have also employed the most skillful and competent workman and operators that could be procured and have in fact taken every precaution and used every means in their power to have the wells operated in a careful, skillful, and workmanlike manner and that no attempt has been made by said company so far as affiant knows or believes to check, hinder, or in any way interfere with, the flow of oil or to injure in any respect whatever the wells or the production of oil therefrom; and that no motive so far as affiant knows existed or could have existed on the part of said company or any of its manager to injure or lessen or interfere with the productions of said wells or to injure or lessen the value of the property in any respect.

F. B. Taylor

June 8, 1878