The sun. [volume] (New York [N.Y.]) 1833-1916, 1905-05-10
OBSERVATION-DISCLOSURES
RECEIVERS IN CHARGE AND BANK
ACCOUNTS SEIZED.

A receiver was appointed In this city and
In Boston yesterday by the United States
oourte to take charge Of the Office Of the
Haight & Freese Company. The conoein
Il supposed to deal In stocks and Krain.~
j. D. Colt was named as the Boston re-
ceiver and W. d. Edmonds, a lawyer Of 81
Nassau strest was appointed to take charge
here. In the applications in both cities
It was alleged by customers Of the concern
that It's business was purely fictitious and
fraudulent and that its officers were pre-
pairing to depart With the asses Injunc-
tions we're granted 10 consequence restr rain
ing any one connected with the concern
from removing any Of its assets and re-
st raining all banks and trust companies
from paying them over to any one.
similar injunct ion was obi aimed in Phila-
delphis, where a receiver will be appointed
to-day.
1t was said yesterday by Roger Foster,
counsel for the receivers, and William p.
Moloney. representing the petitioners. that
the concerns liabilities would run into
the millions. Under recent decision Of
Justice Bowling OF tho Supreme Court
before whom the Officers OF the concern
recently explained In a customers suit
their method Of doing business. il was
held hat the business was fraudulent and
fictitious and that a customer who had
deposited money with the concern was
entitled to recover all be had put in with
interest. Despite this decision rendered
on March last in an action brought by a
man named Haight for an accounting.
the concern has since gone on doing bust
ness, no one being the wiser for the de-
cision except the persons directly interested.
All day yesterday liz Offices at 90 Broad
way, where It occupies a whole floor, were
crowded with customers. When these
heard Of the neceivership proceedings
begun in Boston there was a rush to close
out accounts. Harvey Watson, secretary
OF the company and IN charge ofthe Office
here, was kept very busy until the New York
receiver walked in at O'Clock and took
charge Then Mr.. Watson walked out.
So did most Of the clerks and stenogra pliers.
Mr.. Watson said the whole trouble was due
TO a strike suit and that the injunctions
would be vacated in the morning.
According TO its own officers. when they
we're examined before Justice Bowling
/ recently, the Haight 4 Freese Company,
as il has been called in recent years, has
! done an enormous business. It's principal
Offices have been in New York. Boston.
Buffalo and Philadelphia, but il has seventy
Offices besides these and 20 900 customers
| Charles @. Turner, the assistant treasurer,
testified that the business amounted to 10000
shares Of stock a day. According 10 The
Bowling decision, The purchases and sales
were a matter OF bookmAkinR and balRnc-
ing beta. AcoordinktO neWafidavits upon
which the reoeiverShip proceedings are
| based, the concern hasn't even been keeping
| books
1t was started fifteen years ago as a part
nership by F. c. Haikht and William Freess.
They were suspended and then expelled
from the Consolidated Stock Exchange.
Freese, Il is alleged, retired and is living now
| in London, a rich man. His partner,
| Haight, has been lately a clerk earning a
small salary in the Philadelphia Offices Of
the company. The company was formed
in 1900 with ". B. Summerville as presi-
dent Summerville, II is said, was hotel
clerk in Birmingham, Ala, and was put into
the business by l.. A. May Summerville
retired about a year ago. Then Charles
G. Turner and William II. Hills took the
concern, increasing It's capital TO $500. 900.
Hills il now vios-president. There il no
president
In lS27 William, Haight Of this city sued
for an accounting after the concern had told
him he had been sold out on a rising market.
1t was this suit that came before Justice
Bowling recently. Turner swore that ~ ~at
OF the orders received were filled by Of
setting accounts. When there was nothing
on hand with VII Oh 10 offset buy ing order
Turner said, the stock was actually
bought from brokers He produced book
purporting 10 show transactions in stock
for the Haight account through C X. Burt
broker" member Of the Consolidated
Stock Exchange OF Philadelphia, now in a
receivers hands.
Justice Bowling gave judgment for
HaiEht for his entire deposit with interest
In his decision he sAld that the Burt book
had teen introduced in a vain attempt 10
show legitimate stock dealings. IAN in
erection Of the took, he said, will more
than demonst rate ito suspicious character
He held that in the irst place the concern
had been charging commissions to both
buyer and ~ Her in one transaction. which
In itself was Illegal. In addition IL charged
per cent. interest on the amount alleged
to be loaned TO a customer. trading on
margin when there was no loan.
The transa ctions, Aaid the decision
were fictitious sales and bogus purchases,
and were bookkeeping entries with no
solid foundation Of fact"
The company bae served notice Of an
| appeal from this decision.
RidEWay Bowker Of Camden had the
receiver appointed here yesterday and
accompanying his afidavit was one by
Albert j. johnson formerly a director
ofthe company, and the aifidavit Of a former
employee named Warwick, confirming
what johnson says.
johnson sWears that when Haight brought
his suit the company had no Books, only
sheets showing the trades each day. No
orders, he sayb, were executed al all, except
/ whore a ctiStomer paid for his stocks In
full. johnson says he was ordered to draw
up for use In the court proceedings what
purported TO be Haight's account and to
make lot OF blotterA, which were exhibited
In the Supreme Court This was done in
Buffalo last August. For the trades Of
/ Haight for which no cross transactions
were found says johnson, Turner got
hles Of the newspapers showing quotations
and made up new sheets showing purchases
and sales at the quotations Of those days
! to Offset Haight'e account.
when the sheets thus made I'D were
finished says johnson, he turned them
over TO me and had Y. X. Mart in Of Phila.
delphia copy them into a book called the
c. n. Blut book, which puTpoted to he
trades with c. II. Burt.