Scan 18
Musical Courier 1891-05-20: Vol 22 Iss 587, 1891
166 lines. Read by computer on 19 September 2026. No printed page number was found. See the scan on archive.org.
1The Freund Case.
3JOHN C. FREUND came near running Lawyer Benno Loewy off the track at the continuation of the hearing in the case of J. Travis Quigg against him before Police Justice Meade, at the Essex Market Police Court, last Thursday, on the charge of misappropriating $1,000 of the funds of the "American Musician" Publishing Company. This came about when Lawyer David M. Newburger put in evidence a lot of Freund's checks of June 28, 1890, the day on which Freund raised the $1,000 loan on the 100 shares of "American Musician" Publishing Company treasury stock. Freund grew so excited that he tried to run the case through Lawyer Loewy, until the latter exclaimed: "John, for heaven's sake if you don't stop I shall have to give up the case." But even this did not cure Freund's very perceptible nervousness.
5J. Travis Quigg was the first witness. Mr. Loewy interrogated him. Called on to produce the company's books Mr. Quigg said that they were in his counsel's keeping. When Freund "retired" on December 6, 1890, he had taken away four or five large bags of documents.
7Q. Did you try to prevent that? A. I had no authority to stop him.
9Q. Did you protest? A. I did not. It would have done no good. No, he did not take any checks or vouchers, so far as I know. I saw him take only one bag myself. My brother, Mr. Maxwell, Mr. Lloyd and the office boy saw him take the others.
11JUSTICE MEADE—The charge here is the misappropriation of $1,000. Confine the examination to that. Now (to the witness), who raised that money and what was done with it?
13MR. LOEWY (enthusiastically)—That's just what we are trying to get at. There is no proof of it.
15MR. NEWBURGER—We'll see about that before we get through.
17Lawyer Loewy then called aloud for the production of the check and bank deposit book for June, 1890. The check book was on the Fourteenth Street Bank. Mr. Loewy offered in evidence an entry in the deposit book of a check of $1,067 on June 28, 1890. Mr. Quigg swore he knew nothing about this, as "Freund handled the book and never asked his [Quigg's] advice unless to raise money."
19Mr. Loewy then made a dead set on a fishing excursion to ascertain what moneys Mr. Quigg received from outside sources in June, 1890, but Mr. Newburger's objection that this could not be gone into unless connection with the $1,000 was shown was sustained. Then Mr. Newburger graciously withdrew his objection and the witness acknowledged having received a letter of credit in May, 1890, for $970 when he went to Europe to write up articles for the "American Musician." When asked if he did not get pay for articles in the "American Musician" from outside sources Mr. Quigg replied sardonically: "If you go into that subject Freund is up to his elbows for articles he wrote in the 'American Musician,' for which he turned in nothing to that paper."
21Mr. Quigg said he gave his personal note for the $970, with some of his own stock in the "American Musician" company as collateral. He received $500 additional while in Europe, against which he put up more of his stock.
23Q. What payments did Freund make for you while in Europe? A. Only trifling ones.
25Q. Wasn't it $400 to $500? A. No. I swear it.
27Q. Did not Freund, in 1890, receive $3,000 from one source alone for the paper? A. I heard Freund say so.
29Q. Did he not work off $2,000 of that? A. I heard him say he did; that's all I know about it. The books don't show that any of the $3,000 went into the books. A gentleman who has been examining the books so reports to me.
31Mr. Loewy then produced a cash book and asked Mr. Quigg if he recognized it. Mr. Quigg—That is the book Freund kept in his own hands and from which all others were manufactured.
33Q. Is it Freund's handwriting? A. It looks like Mrs. Brooks' handwriting. Freund would go to her every morning and tell her what to enter and she would enter it.
35On one of the pages of the book was a space 3 or 4 inches deep at the bottom; sandwiched in there was an entry in a hand different from that on the rest of the page.
37Q. Did Freund work that off by individual labor? A. I know nothing about it. From the time Freund had control I was wiped aside. When I made any objection Freund would threaten to resign from the paper. I was an older man than he and I was not prepared to make the struggle.
39Q. What he did was done openly? A. You are asking too much; I don't think so.
41Q. You see that the $1,000 went into the account of the "American Musician." A. I know that Maxwell told me that the next day Freund paid $550 of Mrs. Freund's debts. I know that that entry [of $1,067] is on no other book than the one Freund kept himself.
43By JUSTICE MEADE—Mr. Quigg, you were the treasurer. Why did you not do your duty? A. Whenever I attempted to act Freund threatened to resign.
45Q. Do you know what became of the $1,000 after it went into the bank? A. I do not.
47Q. Freund had the power to make an entry in any account? A. Yes.
49Q. Did the board of directors object? A. No.
51Q. Did any board of audit look into the accounts? A. No. They let him do as he pleased.
53Q. Suppose Freund had refused to do anything but editorial work? A. We had a bookkeeper after the New Jersey incorporation. I did not know the true condition of things until Freund's statement to me [in December, 1890]. I only knew what he told me. Maxwell told me of the $550.
55Q. Who is Maxwell? A. He was on the staff of the paper.
57Q. When you made your report showing confidence in Freund you believed in him? A. Yes. That report was drawn up about a year ago by General King.
59By MR. LOEWY—You had a chance to verify that report?
61A. Yes.
63Mr. Loewy then tried to examine the witness as to a letter written by witness to Freund on November 20, 1890, but Mr. Newburger objected unless its connection with the $1,000 was shown. Thereupon Mr. Loewy waxed warm and declared that he had traced the $1,067 check to the bank, and it rested with Mr. Newburger to take the matter up.
65MR. NEWBURGER—Yes, we will take the matter up. If your honor please, the check and note are dated June 28, but the check was not deposited till June 29. Thereupon Mr. Loewy pointed to the back of the check and triumphantly cried aloud: "The bank's stamp on the back is June 28."
67MR. NEWBURGER—We charge the larceny of the $1,000. I now ask your honor to have the books of this bank produced, or a transcript covering the period in question. I have the right to present the evidence in the manner I think proper. I propose to show by the bank books—which were not kept, as shown here in this book—that a different state of affairs existed from what this book purports to convey. I suggest that an abstract of the bank's books be produced.
69MR. LOEWY—This is an attempt to waste time.
71MR. NEWBURGER—I am not wasting time. But I don't propose to be shut off in this way.
73MR. LOEWY—Here are two books [bank and cash books] which have been in the custody of the prosecution. They have not been in our hands since the settlement on December 6. The bank book is in the handwriting of bank officials, and on its face shows what is shown in Freund's handwriting on the other. The case must be desperate when it is conceded that a check of June 28 was deposited, although counsel finds it there on June 29. The stamp of the Fourteenth Street Bank shows the deposit June 28. That could only be drawn out on the check of John C. Freund, as manager of the "American Musician." They say that $550 of this money was drawn out the next day to pay Mr. Freund's debts. The stubs show the number of checks out. The case of the people has gone to smash.
75MR. NEWBURGER—Oh, no it hasn't. You want to stop where it is. I don't. I say now that that check book is not the voucher of that account. (To Mr. Quigg)—Have you ever seen the return slips issued by the Fourteenth Street Bank? A. No. There are no such papers in my possession.
77MR. LOEWY—Are the return checks in the hands of the "American Musician" Publishing Company?
79MR. NEWBURGER (drily)—Not all of them. The object of this defense is to muddle the whole thing up. Does your honor want those slips produced?
81JUSTICE MEADE—Have you return checks showing where the $1,000 went?
83MR. NEWBURGER—Yes, several of them.
85To Mr. Newburger the witness said that while in Europe he received no money from Freund, except what Freund paid to a building society for him.
87By MR. NEWBURGER—Did you ever make any entries in these books [check and cash books]? A. No.
89Mr. Newburger then offered in evidence the certificate of incorporation of the company.
91MR. LOEWY—I object to characterizing it as a certificate of incorporation. What it is will hereafter appear.
93William Henry Lloyd, bookkeeper of the "American Musician" Publishing Company, was the next witness. He identified the cash book and said there was no account of John C. Freund in it.
95By MR. NEWBURGER—Is there any entry there showing the receipt of $1,000?
97The WITNESS—I made an entry of it on Freund's dictation.
99Q. When? A. From seven to ten days after the company failed on December 6. Freund came into the office, and as he came in he asked me to look at the cash book and said: "You just put that down there and post it." I said "All right," and put it in the cash book.
101Q. Did you enter it in the ledger? A. I did not.
103Q. Had you ever, before been directed to make such an entry? A. No. At the same time that morning Freund requested me to make another entry. He told me to credit him with $540. I entered it in the cash book, but not in the ledger.
105Q. Had you seen Freund since June? A. Every day.
107Q. And he never before requested you to make the entry? A. No, sir.
109Q. Have you compared the return checks with the stubs? A. Yes.
111Q. Do they agree? A. They do not.
113Mr. Loewy jumped up, while Freund grasped his elbow in trepidation and endeavored to pour advice into his ear, whereupon the lawyer shook his client off and begged "John" to leave him alone and not "mix him all up." "John" subsided a moment while Benno Loewy asked the witness to state in what particular the stubs and return checks did not agree.
115The WITNESS—The books have been in expert hands and that is the report. I can't point out any particular number where the discrepancy is. I should think that from 50 to 60 did not agree. Since June 1, 1890, I should think half a dozen did not agree.
117By MR. LOEWY—How many checks can you swear to as not agreeing with the stubs? A.—I can swear to 50. There are checks missing which cannot be explained. There are 50 missing or ones that no one can make out what they are.
119MR. LOEWY—You don't mean missing? Only can't be understood?
121The WITNESS—Yes, missing. There are nine missing without some kind of entry in the stubs, but there have been erasures.
123MR. LOEWY—This witness is using language which I do not understand.
125The WITNESS—You know English so well that you ought to be able to understand.
127Mr. Lloyd gave Mr. Loewy an idea of what he meant by pointing out a memorandum entered between Nos. 2103 and 2104, on the stubs, as a sample of the hocus-pocus that had been played.
129By MR. LOEWY—Were there not frequent exchanges of checks between parties at the "American Musician?" A. Yes.
131Q. You knew it all along? A. Not until we went through the books recently.
133Q. Did you make ledger entries of the Fourteenth Street Bank checks? A. No, sir. I don't know where the Fourteenth Street Bank moneys came from. Mrs. Brooks kept this cash book.
135Q. Were you ever employed as bookkeeper before? A. Yes, sir, in two or three places. I can show you my credentials if you wish.
137Q. Name one place. A. I was with Daniel Stephenson. Yes, he kept posted accounts of entries in his cash book, as any decent concern would. Freund would give such entries as he pleased to Mrs. Brooks to enter. He kept his own account of entries in his own private book.
139Q. Where was that book kept? A. In his private desk.
141Q. Was it not known to everybody there [this question was the result of Freund's prompting]? A. No; I never knew of it until lately.
143Q. Wasn't his check book kept in the safe of the "American Musician" Publishing Company? A. No, sir.
145Q. Wasn't it on top of the desk? A. No, sir; it was kept inside the desk.
147These questions were the result of Freund's own promptings of his lawyer.
149Q. How many exchange checks ran there since June 1, 1890? A. Oh, Lord, every two or three are exchange checks.
151Q. Wasn't that the way the paper was kept along? A. I don't know.
153Q. As a matter of fact are not fully one-half the entries here in your book in consequence of the kiting of checks? A. I suppose so.
155JUSTICE MEADE—The concern was run by Freund, and the president and directors left the paper to be run until such time as it should be a success, when they could come in and enjoy it; isn't that about it?
157MR. LOEWY—That is precisely it, and if your honor had allowed me to state the case I could not have done it so well.
159Q. Did you compare the accounts with the return slips? A. No, I never saw them. I took the check book and stubs, and where there were discrepancies I asked Freund about them.
161Q. Were the original vouchers handed to you immediately after they came from the bank? A. I do not know, nor whether they were all handed to me.
163Mr. Newburger here proposed to offer the bank records, in order to show the discrepancies between them and the entries ordered made by Freund, but a clerk of the bank stated that he could not produce the books; he could bring an abstract, however, but it would take two days to make it. The court ordered the production of the abstract at the next hearing.
165Mr. Newburger then made the proceedings extremely lively and Freund very uneasy and seemingly uncomfortable by offering a series of checks dated June 27 and 28, 1890, which showed that coincident with receiving the $1,000 Freund had been "diffusing" checks liberally. The first check offered in evidence by Mr. Newburger was one of June 28, drawn by Freund to the order of John D. Townsend, the lawyer, for $50. Another one of the same kind
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