The indictment of the defendant for grand larceny in the first degree was found at'the January term, 1909, of the Erie County Court, and was subsequently transferred to the. Supreme Court. The trial was soon had, resulting in a verdict of guilty on the fifth of March.
The grand larceny charged in the indictment is that defined in subdivision 2 of section 528 of the Penal Code, and formerly known as embezzlement. In more specific terms, the charge is that the defendant, as the servant, agent or bailee of one William- Silverthorne, had in his custody and possession $72,012.50 belonging to said Silverthorne, and with the intent to deprive or defraud said Silverthorne “did then and there feloniously steal” said money.
In May, 1908, and since 1903, the firm of Meadows, Williams & Co. was engaged on quite an extensive scale in a general brokerage *228business, with offices in the Fidelity and Trust Company building in the city of Buffalo.- The defendant Meadows was in charge of the business. Mr. Williams, the other Buffalo partner, took no ' active part in the affairs of the company; and Mr. De Witt, the remaining partner,-resided in Mew York, and his contribution to the copartnership assets was a seat in the Mew York Stock Exchange. The Mew York brokerage correspondents of Meadows, Williams & Co. were Post & Flagg, with-whom the defendant’s firm had pri.vate telegraph wire connection, and Mr.. De Witt had desk room in their office. Mr. Silverthorne, the complainant, was a resident of Buffalo and- evidently a man of means and an acquaintance and friend of the defendant. He had purchased stocks of the defendant’s firm two or three times, paying cash therefor, and the certificates of stock were- made payable to himself .or his wife, as he directed, and Were delivered to him.' He made no purchases on' margins, but each stock purchase was intended as an investment.
On the 20th of May, 1908,-he called at the defendant’s office, asking for quotations on United States Steel Preferred, saying he wished to purchase 700 shares for an investment. The defendant immediately communicated with Post & Flagg of Mew York and, after two or three telegrams passing,. Silverthorne .directed the defendant to buy 700 shares át 102£, and the defendant shortly after advisedhim that the purchase had been made. On the twenty-second of May, Silverthorne received the following memorandum, excepting the receipt, relative to the transaction :
‘ MEMORANDUM
“ Mr. W. E. Silverthorne,
“ From Meadows, Williams & Co., ■Fidelity Building, Buffalo, May 21, 1908.
Bought 700 U. S. Steel pfd. at
102¾................................ 71925.
“Com........................87.50
“72012.450
“Deceived Payment,
“.MEADOWS, WILLIAMS & CO.,
“ Per Wm. H. Coughran.”.
*229Accompanying the same xvas the folloxving statement:
“ Meadows, Williams & Co.,
Bankers and Brokers,
Fidelity Building.
“ Telephones :
“ Bell, Seneca 2768.
“ Frontier 2768.
“ Buffalo, May 21, 1908.
“ Mr. W. E. Silverthorne,
“ No. Tonawanda, N. Y.
“ Deab Sir.— We have this day BOUGHT for your account and risk, 700 Steel Pfd. @ 102¾.
“ This account received by telegraph from NEW YORK. Hames of Parties from xvhom purchase was made will be given, if desired, as soon as advices are received by mail.
“Very truly yours,
“ MEADOWS, WILLIAMS & CO.
“By C.”
On the same day Silverthorne .mailed a check on the Columbia Hational Bank of Buffalo for the full amount stated, to the order of Meadows, Williams & Co., returning the bill or memorandum, which was receipted by that firm and returned to Silverthorne. The check was indorsed by said payees and deposited in their general account in the Bank of Buffalo. Silverthorne two or three times within the next week or ten days inquired of the defendant if his stock had arrived, and each time was advised that it had not been received, the defendant explaining the delay with the statement that it was because of the transfer of the stock in Hew York. Silverthorne expected to start for Europe early in June, as the defendant knew, and lie first directed that the stock be made out in his name and left with Davenport, his clerk, to be deposited in his safe deposit vault in the Manufacturers and Traders’ Bank of Buffalo. Later he told the defendant to keep the certificates in the safe of Meadows, Williams & Co. until his return from Europe, which Meadows agreed to do. . ,
Silverthorne did not know the brokers who were the Hew York correspondents of Meadoxvs, Williams & Co., nor did he know any*230thing of the stock-dealing arrangements existing between Meadows, Williams & Co. and Post & Flagg, or of the manner in" which his direction to buy the stock had been carried out. There was nothing in his direction suggesting a purchase on a margin. He expected to pay the full "purchase price of the stock immediately upon the "presentation of the statement to him, as he had done in his previous transactions with the defendant. He supposed the avails of the check were to-be uséd in paying for the 700" shares of the United States Steel Preferred, which orally and by the statement rendered to him he was advised had been purchased in pursuance of his order to Meadows, Williams & Co.
At the time the avails of the check were deposited in the Bank o.f Buffalo to the credit of Meadows, Williams & Co., their credit balance in-the bank was about $1,500. Before the first of" June the greater part of the funds to their credit, including the avails of the check, were paid out.by checks to creditors of the firm or to meet the individual’ obligations of the defendant. A considerable portion was applied, on the general indebtedness owing Post & Flagg, although no part was specifically to be applied on the purchase of the700 shares of the United States Steel Preferred.
Silverthorne left for Europe on the fourth of June, returning early in September. On the twenty-fourth of August Meadows Williams & Co. were adjudged bankrupts with liabilities aggregating $600,000, and assets amounting to about $85,000, and it is obvious that the firm was hopelessly insolvent at the time it received and deposited to its credit the check of Silverthorne. ¿Nothing was paid by the defendant to Post & Flagg for the 700 shares of United" States Steel Preferred purchased in pursuance of the order of Silverthorne and the stock was never delivered to him. Post & Flagg had a-list of stocks which'it had purchased on the order of Meadows, Williams & Co. By their course of dealing stock purchased was held as security for the general indebtedness of ¿Meadows, Williams & Có., and whenever the New York brokers desired the margins increased they so-advised the Buffalo brokers, or drew on- them by draft. On the twenty-third of May their draft for $28,000 was honored by ¿Meadows, Williams & Co. and paid mainly from the avails of the Silverthorne check.: Post & Flagg did not know that the United States Steel Preferred had been purchased by Silver*231thorne. They recognized the orders of- Meadows, Williams. & Co., without any- inquiry or knowledge as to the customers who authorized the purchase to be made.
. If the transaction was-entirely as evidenced by the memorandum,, statement and receipt there might be some plausibility in the argument that the stock belonged to Silverthorne. They do. not, however, disclose the true transaction. The stock was not in fact deliverable to Silverthorne. He could not have obtained it upon demand and payment of the full purchase price to Meadows,. Williams & Co. Title in no, way was assured to him by payment to them. The purchase by Meadows, Williams & Co. was. a fiction, or at best a mere option, and full payment to Post & Flagg was essential before the title became vested in Meadows, Williams & Co. or their principal, Silverthorne. Meadows knew this; Silverthorne did not. He expected payment of the purchase price to Meadows, Williams & Co. assured title in him. Such was not the. effect, of the payment, and- the defendant understood it. Meadows as the agent of Silverthorne knew it was his duty in the evolution of the agency relation to send the check to Post & Flagg, or the avails thereof, and have the certificate of stock made payable and delivered to Silverthorne. In no other way could the purchase and delivery of the property be consummated. The transaction is no. different than if Silverthorne had before any attempt to purchase, the stock delivered the check to Meadows, Williams & Co., directing them to purchase 700 shares of stock; and, instead of executing the commission with which they were charged, they- had diverted the money to their own use. .In that case the transaction would be more bald and direct, but in effect the same. In the one case there would be no attempt to execute the trust; and in the other a purchase as a-mere matter of bookkeeping without any actual transfer or capability of transfer until full payment. In each case the direction to purchase and deliver the stock was thwarted by the actual diversion of the money by the agent. Silverthorne rglied upon the defendant and believed him when he said the books,pf .the steel, company would be closed until June first. He was explicit, however’, according to his testimony, in requiring the stock to.be taken in his name and held until his return from Europe. The postponement of the delivery did not alter the legal relations of the parties. The agency *232of Meadows still continued until the transaction culminated in the delivery of the stock in the manner directed by Silverthorne.
' When Silverthorne delivered the check he had the right to assume either that the payees named had.already purchased the stock and paid for it and had it ready to deliver, or that it was purchased, to be paid for by the check or its avails, which he delivered to them. The defendant knew the exact situation in regard to the stock.' Silverthorne did not. If Meadows had informed Silverthorne that nothing had in fact been paid on the 700 shares ; that the avails of the check would be placed in the bank to the credit óf Meadows, Williams & Co. and checked out in the payment of their general obligations and that at some future time they would procure the stock, very evidently the check would not have been delivered.
The fallacy of the appellant’s- position is that lie assumes the defendant had purchased 700 shares of stock w.hicli- belonged to Silverthorne upon the payment .of the purchase price or even before. Such was not the true status of the transaction. The stock had been purchased or obtained by Post & Flagg, but it was not deliverable until they had received payment in full. .
The'following illustration may elucidate the status of the .parties. A wishes to buy a black mare, Hambletoriian breed, seven years old and twelve hands high. He engages B, a horse dealer, to find a mare of that description. B, after a day ■ or two, advises him he can purchase such a mare of another dealer for $2,000, and A orders the purchase to be made. B writes him he has bought the mare and sends a memorandum or bill for $2,000 and $50 commissions, for which A sends his check inpayment and which B puts in the. bank to his own credit and- afterwards pays out on his own obligations. How if the mare is ready to be delivered to A, poséibly the money paid by him belongs to B, and A is entitled to the mare. If, however, as B knew when the money was paid the mare had not been paid for, but has been turned loose with twenty others which B ordered purchased and which have not been paid for, and all of which are by agreement held as security for the whole indebtedness, then the appropriation of the money by B is an embezzlement. A has received no equivalent for his check. There never was an actual purchase made.
The chief features of the transaction are undisputed, and, it seems *233to me, they clearly show that Meadows was employed at a fixed compensation by Silverthorne to purchase the United States Steel stock preferred at a definite price. The money or its equivalent was delivered by tlie principal to the agent for the specific purpose of paying for the stock which the agent reported he had purchased in compliance with the directions of his principal. The money received in this fiduciary capacity instead, of being used as Silverthorne intended, and as Meadows realized was necessary in order to fulfill his obligation to his principal, was commingled with the funds of the defendant and appropriated by him to his own use.
Section 528 of the Penal Code provides: “ A person who, with the intent to deprive or defraud the true owner of his property, or of the use and benefit thereof, or to appropriate the same to the use of the taker, or of any other person ; either •* * * 2. Having in his possession, custody or control, as a bailee, servant, attorney, agent,, clerk, trustee, or officer of any person, association or corporation, or as a public officer, or as a person authorized by agreement, or by competent authority, to hold or take such possession, custody or control, any money, property, evidence of debtor contract, article of value of any nature, or thing in action or possession', appropriates the same to his own use, or that of any other person other than the true owner or person entitled to the benefit thereof; steals such property, and is guilty of larceny.”
The elements constituting the crime defined in the statute quoted were proved. (People v. Hazard, 28 App. Div. 304; affd., 158 N. Y. 727; People v. Kellogg, 105 App. Div. 505, 514 et seq. ; People v. Birnbaum, 114 id. 480; People v. Civille, 44 Hun, 497; People v. Miller, 169 N. Y. 339 ; Commonwealth v. Cooper, 130 Mass. 285.)
The gravamen of the crime is the appropriation of the money or property with intent to defraud, etc., by one lawfully in possession of the same, but as .the agent, bailee or servant of another. The jury have found that the defendant came rightfully'into possession of the check from Silverthorne and as his agent or bailee to consummate the purchase of the stock in order that title to the same-should become vested in Silverthorne; that “ with the intent to deprive or defraud ” Silverthorne of his money he embezzled the same by appropriating it to his own use.
*234’ Tlie". learned ."counsel "for "the defendant claim's "that after" the receipt and, usé of the check,'the. relation of debtor and. creditor' existed between the payees and drawer of the check. The propo-' sition of necessity implies that the United States Steel stock became the property of Silverthorne instantly upon its purchase.. The evidence is undisputed that it was the invariable-practice of "Post & Flagg to hold aiiy stock which they purchased on the order of. Meadows,. Williams & Co. until payment therefor was made. . Pay-. merit to the’Buffalo broker's" was not' payment to them. The dealings of the Hew York correspondents were" entirely with Meadows, Williams & Co.-, and hot with the clients of patrons of that firm, nor was the defendant’s firm recognized’ as: the agent-of the Hew York firm to receive.' payments óf stock. Possibly Silverthorne as an undisclosed principal might by tendering the purchase price, of the stock to Post & Flagg liavé been entitled to its transfer to him. If so, the defendant" is not relieved from the charge of embezzling •the money of Silverthorne" which was intended to pay for this stock.
"Again, the debtor and-creditor argument involves the proposition that "the defendant might lawfully and properly mingle the avails of the check with his own funds and use them as lie did in the payment of his own debts and in every respect like money" paid to him for goods' purchased arid delivered, or salary earned, or acquired in any other manner unquestionably his ówn. The transaction is not susceptible of that construction; Meadows, Williams & Co. were the agents of Silverthorne to purchase this stock for a fixed compensation, and the money was paid to them to carry out the arrangement.. 1
•It- is claimed.that"Silverthorne relied upon the integrity of Meadows.' Undoubtedly. He believed implicitly in his honesty as a mail,- and also had .unquestioning faith in his financial standing. This suggestion is fortified by the fact that just before Silverthorne' left'for Europe he authorized Meádows'to sell TOO .shares of the capital stock of .tlie Columbia Hational Bank of Buffalo for the sum of $30,000, and told him he might retain the money ás á loan.' The "stock was sold for $20,000, and the defendant, used the money, all of which denotes the high regard in which Silverthorne held the defendant. "• ■ . ,
The'implicit trust and confidence placed in tlie defendant cannot' *235extenuate its abuse by the latter. His conduct, in view of this faith in him, is the more to be condemned.
The essence of the crime of larceny involving embezzlement is breach of confidence, and the present case apparently is no departure from the general trend of cases of this kind.
' The learned counsel argue strenuously that there was no sufficient evidence of any criminal intent to defraud Silverthorne by the appropriation of the avails of the check. In the first place it is contended that the defendant acted openly, and not secretly, in depositing and paying out the money. It of course was distributed upon checks delivered in the usual way. Silverthorne did not know it was being used to pay the debts of Meadows, Williams & Co., or of the defendant. The bank depositary was not advised as to the purpose for which the brokers received the money. Hone, of O the payees of the checks by which it was distributed were cognizant of the transaction with Silverthorne.- So far as Silverthorne, the only person entitled to know, was concerned, the disbursement of the money was secret.
The counsel rely upon People ex rel. Perkins v. Moss (187 N. Y. 410). In that case Perkins, under the direction of the president of an insurance company, contributed to the presidential campaign fund the sum, of $50,000 upon the promise that he was to be reimbursed from the funds of the insurance company. It appeared that the president of the companyliad been in the habit of making such disbursements; that he conferred with the finance committee of the company, and all the members agreed -that Perkins should be reimbursed for the moneys advanced, and the president, in the execution of the authority with which he had in fact always been endowed, paid Perkins for the moneys advanced. The court held that, while the payment of the money was illegal, there was no criminal intent disclosed and that the transaction was open, and Perkins honestly believed he was advancing the money properly as directed by the president and no benefit inured to him. I find" no parallel in the two cases.
In the present Case the defendant, as the jury have found, knew tlie money did not belong to him and he was benefited by its appropriation. Criminal intent must be gathered from the facts connected -with the chief transaction, and ordinarily a man intends *236what his acts indicate. The defendant must have realized- he was in great financial stress at the time Silverthorne delivered the check to his firm. On that very day his partner, Williams, withdrew from the firm, and the only part of the assets which he received was one dollar and certain securities of little, if any, value. And yet, if the avails of this check belonged to the firm there were more than $70,000 in cash to be taken into account. In about three months without any untoward or sudden catastrophe the firm was found to be insolvent, owing- $600,000, and with assets of $85,000. The defendant swiftly paid out .the avails of the check. Most of it had disappeared in three or four days, and the pressing obligations varied from .bills for milk and flowers to large sums to right up the marginal stock account with Post & Flagg. The jury, therefore, had abundant evidence to authorize them to find that the defendant knew he was on the verge of bankruptcy vyhen he appropriated the money of Silverthorne.
■ Again, .the defendant knew that Silverthorne expected to start for Europe early in June and would be absent for three months. The defendant might have expected that a favorable turn in his stock transactions would, enable him to replace the money appropriated before Silverthorne returned. The agent or trustee generally takes this optimistic view of the outcome of his speculation when he converts the money intrusted .to him. The offense of embezzlement is in the initial act of misappropriation, and the fact that the defendant intended to restore or return the property embezzled is no defense where restoration has' not been made. (Penal Code, § 549.)
The intent to misappropriate the money may not have existed at the time the' deposit was made to the credit of Meadows, Williams & Co. The.firm may lawfully have held the money as trustee, bailee or agent, although in their general account. When it was used and appropriated for their benefit and in violation of their fiduciary relation the intentional misappropriation may first have been made, and that constitutes the crime. (Peoples v. Civille, 44 Hun, 497, 500, supra.)
In People v. Thomas (83 App. Div. 226), relied upon by the appellant, the money which the complainant claimed was embezzled wa.s paid over to the defendant to be used in stock speculations on. *237marginal accounts. The money was not to be deposited in a special account as the money of the complainant. The court held that the money was not received in a fiduciary capacity, but by the defendant as a broker for general use in the purchase of stocks on margins as his judgment dictated.
We think the verdict was justified by the evidence.
The defendant seeks for a reversal of the judgment for alleged errors committed on the trial, only one of which calls for independent discussion. The defendant had been sworn as a witness in the bankruptcy proceeding before the referee in bankruptcy, and acting on the advice of his counsel availed himself of the privilege to which he was entitled, and declined to answer certain questions involving the transactions with Silverthorne on the ground they would tend to incriminate him. On. the trial of this action he testified on his own behalf, detailing with particularity all the transactions upon which the charge of embezzlement was framed, and also testifying that he did not intend to defraud Silverthorne or deprive, him of his property.
Upon the cross-exaznination he was iziterrogated sharply upon the question of his intent, and among other, tilings was examined in regard to the testimony izi the bankruptcy proceeding already referred to. He was also asked what induced hizn to avail himself of his privilege in the bankruptcy proceeding, and answered that he was advised to do so by his counsel. There were two objects, I assume, in this line of cross-exaznination. In the first place, Silverthorne and the defezzdant disagreed izi some material aspects, and the questiozi of their credibility was an iznportant one for the jury to consider. Izi the second place, the district attorney was endeavoring to break the force of the defendant’s testimony that he did not intend to commit any crime when he accepted the check and used the avails. If he was protecting himself by his privilege in the bankruptcy proceeding the claim might be made that such course was incompatible with the one taken on the trial that he did not intend to defraud Silverthorne. The defendant by testifying to his own intent opened the door to any cross-examination' legitimately bearing upon that subject. (People v. Hinksman, 192 N. Y. 421; People v. Webster, 139 id. 73, 84; People v. Tice, 131 id. 651, 656 et seq.)
*238The defendant was. not obliged to testify. His omission to do so could not be. commented upon. When, however, he elected to take the stand in liis.own behalf he was subject to cross-examination the-same as any other witness. The extent to which disparaging questions are permitted is in the discretion of the trial court, and unless the, discretion, is abused, his" rulings are not reviewable on appeal. (People v. Webster, 139 N. Y. 73, 84, supra).
In reply to the. questions put to him by the district attorney the defendant freely and fully stated the reasons which induced him to avail liiznself of his constitutional privilege in the bankruptcy proceeding, and even if the questions were. improper when ■ taken in connection with the explanations made they are not of sufficient gravity to call for a-reversal of the judgment.
We have examined the-other questions discussed upon the brief of the appellant’s attorneys, but do not deem it necessary to consider them separately, as in our judgment they were not errors, or, if so, not harmful or material.
The judgment and orders should be affirmed.
All concurred, except Iíruse, J., who dissented, in a memorandum.