The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-03-04
STATE ASKS RECEIVER
FOR REALTY CONCERN
Suit Against Mutual Profit
Company a Step to Stop
Bond Selling.
SEEKS TO REVOKE CHARTER
Profit Dividing Certificates
Said to BE Banking i'm
Violation of Law.
SEEKS TO REVOKE CHARTER

Attorney-General Carmody filed suit in
the Supreme Court yesterday against the
Mutual Proht Realty Company of 1ll
West Thirtyslxth street to revoke the
company's charter and for the appoint
ment Of II receiver to lquidate the COM
pany's business The Acknowledgement
took action after Supreme Court Justice
Cohalan had signed An order permitting
the suit to be brought.
The suit Is IA direct result OF the recent
decision Of the Appellate Division that
many real estate concerns which sell profit
sharing bonds or certificates to investors
and use the money realized on the securi-
ties to speculate in real estate are doing
a banking business In violation OF the
law.
The complaint states that the company
was Incorporated on December 81. 1908.
by John W. Paris. Nicholas w. Haaren
and Ida Milliken, under a charter which
permits II to deal In real estate. receive
deposits. buy foreign coin. bills OF ex-
change. &c, and to conduct an engineer
ing and general promotion business. The
complaint states the defendants chief
business Is the issuing and selling OF So
called profit sharing bonds.
The Attorney-GeneIal alleges that the
company has Offended against the business
corporation law under which IL was char
tered In that the acts now perfos med by
the company may be performed only by "A
company Incorporated under the banking
law.
1t is alleged that the defendant is doing
straight banking business and hash [
been authorized to do such business 10y
the Superintendent OF Banks. on this
ground the Attorney-General contends
that the company Is liable to dissolution
for an abuse Of corporate powers and that
public interest requires that an action be
brought to aHnul its charter.
In October last the company was denied
a renewal Of its license to do business In
Connecticut, where II had sold 100000
of bonds. The Connecticut Building and
Loan Commissioner declined to state the
grounds on which he has refused to renew
the company's license. An action was be-
gun. but there has been no decision.
The Mutual rrott Realty Company s
last report. dated June. 1913, represented
that 1t owned reas estate worth s975.75O
OF which $530.500 Is In vacant property,
S326,000 is In vacant improved real estate
and Sb9,250 in improved real estate and
buildings The company owns only one
parcel In Manhattan, a vacant lot ap-
praised at $4,000.
John w. Paris, who organized the COM
pany. was arrested In Indiana, his native
State, In 1898 on the ground that as an
officer of bank he accepted deposits
after the bank was inso!vent He was
convicted. but got new trial and on the
second trial was acquitted. At that time
he was partner In IA firm which owned a
chain OF eight banks and was In the bus!-
ness Of establishing banks.
After he was acquitted Mr.. Paris came
to New York and became associated in
Queens real estate operations with Ed
ward A. MacDougal and william r..
Hencken. They bought up a lot OF land
formed the Kissena Park Corporation and
sold the bulk of the land to the city for a
park. The circumstances under which
this property was sold developed Into a
scandal. which was partly responsible for
the removal OF Borough President Bermel
Of Queens by Gov. Hughes.