The Montgomery advertiser., 1902-07-04
DefeuSe Declares Fraud Mark
 cd Bond Transaction.
Says the County's Securities Were Knowingly Paid for With Cheek Which Was Worth
 less-Jury to Try
 the Case.


 panv of Maryland, sn the other devel- oped sensational phases yesterday, when lawyers representing the Treasurer ana the bond compan filed pleadings in the United States Circuit Court, alleging fraudulent transactions in the sale Of the bonds upon which the suit turns:
 The Couf&y is suing to recover about $11O, 900 which was on deposit in the bank ing; house of Josiah Morris & Co., at the time of its failure in January lsoi' County Treasurer Cochran is made the defendant. His bond for $120,000 having been made by the Fidelity and Deposit Company of Maryland that company is made co-defendant
 For several, days the lawyers interested in the case have been doing preliminary legal sparring in the Federal Court and if was said yesterday that the case VIII probably go to trial on its merits Mon- day or Tuesday, when jury Will De or eanized and much testimony be taken.
 Judge Jones yesterday morning, Tn an oral opinion, overruled the demurrers nled Inv inc defendants, in which they contend ed that Mir Cochran was still acting as Treasurer of the County, and if the Coun- ty secured a judgment, the money would have to be paid into his hands.
 Having been overruled by the Court on this contention, the lawyers representing Mir Cochran and the bond company inn nediately filed a large number of pleas | IT aking sensational allegations wnlch they claim they will be able to show by | testimony.
 The money which was in the banking house of Josiah Morris & Co.,. at the time 1 of it's failure, was the proceeds or 1 County bond issue of $100.00O which was authorized by the Legislature a few weeks | nrior to the failure of the bank. The pleas allege that notwithstanding the act | authorizing the bond issue required that | the bonds be paid for in cash, they were delivered by Charles A. Allen, Clerk Of inc County Board of Revenue to John p. Kehn in exchange for check upon Josiah Morris & Co.,, for ll,lOs5S, whlen the pleas contend MT. Kohn knew at tne
 time was worthless. and that MT honn | knew at the time of extending the cnecK | thatt he bank had less than S4V'V" on hand.
 l The startling statement is made by the 1 nleas that the Fidelity and Deposit Com pany of Maryland did not execute tne bond of MT. Cochran, and consequently l there is no ground for suit. 1t Is fur'
 ther contended that MT. Cochran was
 wholly without knowledge of the trans- 1 action between the Clerk Of the Boaro of Revenue and MT. Kohn, hence ne is | nAnlA | Morris & Co, acted as an agent TOT the | Board of Revenue in disposing Of the
 bonds and Mr. Cochran repudtated ths i transaction as soon as he learned Of II.
 When the court met yesterday morn | inc Judge Jones heard the lawyers or
 hotb sides on questions which had beer
 s,brottted to the Wednesday afternoon
 Tie attorneys for the defendants Wef'
 frank in their answers and seemed U
 concede that the answer 10 the quest'oii' nut by Judge Jones would probaply re
 suiIt in oyerruling the demurrers.
 Judge Jones then delivered an ora
 opinion stating his reason for overruhni the dernurrers filed by the lawyers repre-
 senting MT. Cochran and the bond com
 pany.
 On everything the demurrers, Jndg'
 Jones said in part: ''The embarrassment
 in this cas-, arises from the peculiar pro
 visions of our statutes, which give th'
 County Treasurer the right to receive an'
 keep the County money which may D'
 collected in this suit, until called on t'
 pay it out on warrants, OF 1t is lawtuii!
 demanded of him by some successor II
 office. It is unquestionably the law, l
 judgment be recovered here and satisfac tion made that the County Treasure | must receive the money and keep IL, Una
 no one else is entitled to It's custody an'
 possessien, and that the Board Of heve
 me could not give receipt Tor th'
 money paid in satisfaction of the JudS
 ment in favor of the County, since III law requires the money to be turned ove
 to the Treasurer and kept by him ant no one else has authority 10 receive v keep the money.
 .Srhis being the law, does it follow tha
 the case comes within the principle ar gued in support of the demurrers, Una
 Cochran's duty being to receive and Keel this money, and he being also the debto who is to pay the judgment that 1t l in legal effect a suit by Cochran agains
 himself, in which it Is his duty to re
 ceive with one hand and pay over Witi
 the other and, therefore, although ther he an admitted conversion, yet the Coun } tv Is not entitled to sue and have luds ment? The demurFers necessarily aunl' a conversion, and. therefore, cause O
 action In favor of the County on thi bond.
 t "While appreciating the ability of tn a,eument in support of the demurrers, } feel quite convinced that it Is untenable Is Cochran suing himself? Certainly moi f Action is brought against him by tn . County to recover for conversion O ] money which belongs to 1t, and not | ? Cochran. The judgment will be the prop  the property of the County.
 "Is Cochran the Treasurer, and the Tn 2 dividual Cochran the same person in tn eve of the law? It Is essential to bea g in mind the legal difference betwee l Cochran the individual, and the Count , Treasurer The suit here is against tn | individual and not against the Count 2 Treasurer, on a cause of action create t hv q general deposit of the County 3 money in 8 bank, which was a conversion 3 bv Cochran the individual Ii could no
 he the official act of the Treasurer. or conversion as Treasurer because tha
 was forbidden by law, which stripped c any authority as Treasurer to make general deposit of County funds. Tn act was certainly a breach of the bono for if was a violation of the Treasurer
 dutv the observance of which IS th
 condition of the bond. On demurrer
 must he held that this breach or out
 whereby the County's money was cor l verted. caused a corresponding JOSS
 the County. Why, then, on prlheipI may not the County maintain It's acnon
 The failure to pay over the money 1varrants duly drawn when surncler
 money had been put in the Treasury 7 roaet them. would, of course. be not onl , breach of the bond but evidence c tbet breach. Is it the law that tn , traacb can not be proved in any othe nav or by any other legal evidence?
 if he held that there can be no proof c
 a conversion except by a refusal to pa
 warrant, the result would be tha f nroof of the breach would depend upo 7 1 tha condition of the Treasury, and nc ! 1 upon the wrongful act of the Treasurer