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SENSATIONAL PLEAS FILED IN THE SUIT OF THE COUNTY upon the wrongful act which depleted Defeuse Declares Fraud Markthe treasury, but upon the amount of money which the Treasurer still had on ed Bond Transaction. hand. The statement of the proposition shows that it can not be the law. 'Now, then, we have a suit brought by the county on an admitted cause of acSays the County's Securities Were tion against an individual, the fruits of which, when recovered, must go into Knowingly Paid for With a the pockets of the county treasurer, and not into the pocket of the individual Check Which Was WorthCochran. What reason can there be for denying a right of action, if the less-Jury to Try money when collected, on judgment against the individual Cochran, will go the Case. into the county treasury as the property of the county, because Cochran the debtor, in another capacity, is entitled as an official to receive and hold the The legal controversy between the money? The treasurer's possession is County of Montgomery on the one side, the possession of the county. He holds and its Treasurer, J. J. Cochran and his and keeps for its benefit, as a mere public surety, the Fidelity and Deposit Comcustodian of money, the legal and equitapany of Maryland, on the other, develble title to which belongs to the county. oped sensational phases yesterday, when The result of the suit is to put back into lawyers representing the Treasurer and the treasury of the county, the money the bond compan filed pleadings in the which was unlawfully taken out of It United States Circuit Court, alleging In that respect the judgment but works fraudulent transactions in the sale of the the performance of a duty, which it is bonds upon which the suit turns: incumbent upon the treasurer to perform The County is suing to recover about voluntarily, and a like obligation rests on $110,000 which was on deposit in the bankCochran as an individual. When the ing house of Josiah Morris & Co., at the money goes into the pocket of the treasutime of its failure in January, 1901. rer, the treasurer's bondsmen become County Treasurer Cochran is made the liable for it. There is quite a difference defendant. His bond for $120,000 having between the pocket of the county been made by the Fidelity and Deposit treasurer, and the pocket of the individCompany of Maryland that company is ual Cochran. The fact that the individual made a co-defendant. who may be coerced to pay the judgment For several, days the lawyers interested in another capacity, happens to be in the case have been doing preliminary the county treasurer, is no reason why legal sparring in the Federal Court, and that the individual against whom the it was said yesterday that the case will county has a plain cause of action shall probably go to trial on its merits Monnot meet his liability to the county. day or Tuesday, when a jury will be orThere is no foundation in reason or auganized and much testimony be taken. thority for holding that the county shall Judge Jones yesterday morning, in an not maintain its right of action. merely oral opinion, overruled the demurrers filed because the law provides that when the by the defendants, in which they contendjudgment is satisfied, the fruits shall go ed that Mr. Cochran was still acting as into the hands of the country treasurer, Treasurer of the County, and if the Counfrom whose custody no county authority ty secured a judgment, the money would can take it except in payment of warhave to be paid into his hands. rants drawn on the fund. Allowing the Having been overruled by the Court on county to prosecute its suit to judgment this contention, the lawyers representing settles the fact of conversion and the Mr. Cochran and the bond company imdisputed liability for it, and stops the mediately filed a large number of pleas running of the statute of limitation: and making sensational allegations which the coercing of satisfaction by an executhey claim they will be able to show by tion the fruits of which go into the chantestimony. nels prescribed by law, to be held for the The money which was In the banking benefit of the county, redresses the wrong house of Josiah Morris & Co., at the time and puts the money where the law reof its failure. was the proceeds of a quires it to be placed and kept as the County bond issue of $100,000 which was property of the county, and does not authorized by the Legislature a few weeks violate any right of the individual Cochprior to the failure of the bank. The ran. There is no reason why the county pleas allege that notwithstanding the act should not prosecute its suit and have authorizing the bond issue required that judgment and execution against him, if, the bonds be paid for in cash, they were upon the facts developed in the trial, it delivered by Charles A. Allen, Clerk of be found that the county is entitled to the County Board of Revenue to John recover. P. Kohn in exchange for a check upon At the conclusion of the opinion the Josiah Morris & Co., for $111,109.58, which lawyers representing Mr. Cochran and the pleas contend Mr. Kohn knew at the the bond company filed the sensational time was worthless, and that Mr. Kohn pleas. knew at the time of extending the check These pleas set up in the first place thatt he bank had less than $40,000 on that the Fidelity and Deposit Company of Maryland did not execute the bond of hand. Mr. Cochran at all, and consequently the The startling statement is made by the county cannot recover anything. They pleas that the Fidelity and Deposit Com. contend if this be true, which they say pany of Maryland did not execute the they will be able to prove, It will defeat bond of Mr. Cochran, and consequently the whole suit. there is no ground for a suit. It is furAnother batch of pleas were filed which contend in substance that Mr. Cochran ther contended that Mr. Coohran was was County Treasurer at the commencewholly without knowledge of the transment of the suit, and is now under bond. action between the Clerk of the Board and is the sole custodian of the money of Revenue and Mr. Kohn, hence he is of the county with the right to hold it; not liable for the transaction: that Josiah that the county has no right to receive Morris & Co., acted as an agent for the or recover it. Board of Revenue in disposing of the The sensational allegations upon which the defendants largely rest their case bonds and Mr. Cochran repudiated the are contained in the third series of pleas transaction as soon as he learned of it. submitted to the court. These pieas When the court met yesterday mornare in substance that the law authorizing ing Judge Jones heard the lawyers on the county of Montgomery to issue $100.both sides on questions which had been 000 of bonds required that they be sold for submitted to the Wednesday afternoon. cash and that the money resulting thereThe attorneys for the defendants were from be paid to the County Treasurer; that the bonds were sold under an agreefrank in their answers and seemed to ment, that they were to be paid for in concede that the answer to the questions cash and that the bonds were not paid put by Judge Jones would probably refor in cash; that no money 8.8 the prosuilt in overruling the demurrers. ceeds of the bonds was ever received by Judge Jones then delivered an oral Mr. Cochran as County Treasurer or by any one acting for him. opinion stating his reason for overruling Continuing, the pleas contend that inthe demurrers filed by the lawyers represtead of selling the bonds for cash as resenting Mr. Cochran and the bond comquired by the law authorizing their ispany. suance, Charles A. Alien, Clerk of the On overruling the demurrers, Judge Board of Revenue, delivered the bonds to Jones said in part: "The embarrassment John P. Kohn in exchange for "a worthin this case arises from the peculiar proless check that John P. Kohn was visions of our statutes, which give the acting in the dual capacity in the transaction as clerk of Josiah Morris & Co., County Treasurer the right to receive and and as deputy for Mr. Cochran with keep the County money which may be authority as such deputy to receive collected in this suit, until called on to money only, all of which it is alleged pay it out on warrants, or it is lawfully Mr. Allen knew at the time of the dedemanded of him by some successor in livery of the bonds and the acceptance office. It is unquestionably the law, if of the check. It is further alleged by the pleas that John P. Kohn in exchange judgment be recovered here and satisfacfor the check gave a receipt signed in the tion made, that the County Treasurer name of Mr. Cochran as though he had must receive the money and keep it, that received money; tat this worthless check no one else is entitled to its custody and was for $111,109 58 and that Mr Kohn possession, and that the Board of Reveknew at the time he drew the check upon Josiah Morris & Co., for the bonds and nue could not give a receipt for the received it as deputy of the County money paid in satisfaction of the judgTreasurer that there was less than $40,000 ment in favor of the County, since the in the bank and that the check could not law requires the money to be turned over be paid. to the Treasurer and kept by him and The pleas contend further that Mr. no one else has authority to receive or Cochran knew nothing about the transkeep the money. action from beginning to end until after the failure of the banking house of Jo"This being the law. does it follow that siah Morris & Co., about two weeks later, the case comes within the principle arand that as soon as Mr. Cochran learned gued in support of the demurrers, that about the transaction he repudiated the Cochran's duty being to receive and keep contract. this money, and he being also the debtor Counsel for the county announced that who is to pay the judgment, that it is they would be ready to file demurrers and answers to the pleas this morning Judge in legal effect a suit by Cochran against Jones called attention to the fact that himself, in which it is his duty to retoday is a national holiday, saying, howceive with one hand and pay over with ever, that he was willing to hold his the other, and, therefore, although there court open today if it better suited the be an admitted conversion, yet the Counparties concerned. After a consultation. the lawyers for the county announced ty is not entitled to sue and have judgthat they could not prepare their demurment? The demurrers necessarily admit rers for submission this moning, and the a conversion, and, therefore, a cause of court adjourned until Saturday morning action in favor of the County on this at 9:30 'clock. bond. Meanwhile, upon the suggestion of "While appreciating the ability of the Capt. John G. Finley, County Attorney and Hon. Jesse F. Stallings, who repreargument in support of the demurrers, I sents the county in the suit, a special feel quite convinced that it is untenable. meeting of the Board of Revenue was Is Cochran suing himself? Certainly not. called at the County Court House. It is Action is brought against him by the said that as a result of the phases of County to recover for a conversion of the case which have developed, It was money which belongs to it, and not to suggested by the lawyers that the suit Cochran. The judgment will be the propmight be compromised. A member of the Board of Revenue said last night that erty of the County, and Its fruits will be the Board unanimously rejected any the property of the County. proposition looking to a compromise of "Is Cochran the Treasurer, and the inthe suit and directed the lawyers to fight dividual Cochran the same person in the to it finish. a Mr. Whelan of Baltimore, President of eye of the law? It is essential to bear the bond company, who is in the city in mind the legal difference between assisting in the defense of the suit, said Cochran the individual, and the County last night that his company had at no Treasurer. The suit here is against the time suggested compromise and that individual and not against the County no such proposition had come from him his from or Treasurer, on a cause of action created company Hon. Thomas H. Watts, who, with Mr. by a general deposit of the County's Gans, a Baltimore lawyer, is representing money in a bank, which was a conversion Mr. Cochran and the bond company said by Cochran the individual It could not in an interview last night that the be the official act of the Treasurer, or a would be tried on its merits He said conversion as Treasurer because that was probable a jury would be drawn in
