New Britain herald., 1929-05-29
PARkER.SMITH C0.
 1RUSTEESHlp GIVEN | BANK BY OFFICERS
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(Continued from First Pase) cause why a receiver should not be appointed"
 Judge Schatz replied: There is no reason why q receiver should not bo appointed" MT. Dateett said that the bank was in readiness to 60 into the case as trustee.
 Judge Schatz explained to the court that the Parker Smith Conl- pany had vacated Its own trust eeship and was willing to have the bank take it over. Then began argument as to a receiver, Judge Ells ex- pressing belief that it should be ay, institution in good standing in the city.
 Mr. Dagsett said the Second Ma tional bank could act and he was seconded by Frederick c. Russell also of the banks legal staff.
 MT. Allins objected to the bank serving as he said that the duties of trustee and receiver might conflict. He suggested that the Union & New Haven Trust Company be appointed. Recess was taken to give time for Q conference. Mir. Daggett said he was agreeable to the trust company serving.
 New Haven, May 29 R-Attor- neys for the Pdrker-smith Company which has been doing an annual business of teO. 900, 900 in mort4aEes and mortgage notes, were preparing an answer today to the states charges that the firm defrauded the public through misuse of funds. fall ure to sesregate its assets and to foreclose on mortgages long in de- fault and through payments of i'm terest out of assets.
 The answer was to be filed in civil superior court here by p. m. today. The charges were made in com- plaint filed by Attorney General Benjamin w. Allink at the behcst of Bank Commissioner Lester E. Shippee. yesterday. The complaint asks that temporary and permanent receivers should be appointed and that the company be dissolved. its trusteeships be transferred to a H. censed and reputable financial house. The order to show cause why receiver should not be appointed was made returnable by Judge Ar thur F. Ells on September ,. Amonk the charges are that the company. though ordered and warned by the bank commissioner, failed to take out license to operate, that it lent money to persons upon whose prop erty it holds mortgages. and de frauded the public of about s1 1.o0o.- 0O0," and 'is likely to continue to defraud the public" unless dissolved and relieved of its trusteeships.
 License Was Refused
 The license to operate was event. ualy refused by the commissioner. Bank Commissioner Shippee said that over-valuation of property in Hartford, New Haven. Meriden and New Britain among other places was the chief cause of the concerns dif- ficulties. He also said that it oper- ated through a dummy corporation. the Homestead Realty Corporation, but this is not named In the com- plaint. The Second National banl: New Haven. according to the com plaint was. by agreement with Park er-Smith. succeeding trustee.
 It was pointed out that f the state petition is granted the Parker Smith Company will be removed as trustee of S20.00O, 900 of mortgage notes and the receiver will be sub stituted, the Second National bank of New Haven will succeed aa trus- tee and there will be widespread foreclosure of mortgages on exten- sive and valuable properties in the principal cities of the state. and possible losses to subsequent holders of mortgages.
 Scok Lawyer Receiver
 It is understood Attorney General filling and Commissioner Shippee will seek to have a prominent New Haven attorney appointed receiver. Assistant Attorney General Raymond A. Johnson of Massa achusetts will prosecute the case for the state.
 Judge Nathan A. Schatx of Hart ford. Parker-Smith attorney. was in conference with the three officers of the concern until an early hour this morning. He said they had not yet decided on . course to pursue. It was thought probably the concern would not oppose the appointment of q receiver.
 Bank Commissioner Ghippee made known part of the results of the in- Nestisation on which he based his re- fusal of a license to the concern in 1928 and cn which the com plaint was filed. He said the Homestead Realty Corporation was brought to light as the dummy corporation through an investigation of land records in New Britain and New Haven. where it's name appeared frequently in proper.