Section 305 of the Penal Law fadded by Laws of 1913, chap. 102), so far as applicable, reads as follows: “ Any officer, director, trustee, employee or agent of any corporation to which the, Banldng Law is applicable, who abstracts or wilfully misapplies any of the money, funds or property of such corporation, or wilfully misapplies its credit, is guilty of a felony.”
The defendants Marcus and Saul Singer were directors of the Municipal. Safe Deposit Company, a subsidiary of the Bank of United States, and the defendant Herbert Singer was an attorney in the office of Isidor J. Kresel, the general counsel of the Bank of United States and its subsidiaries.
The indictment upon which these defendants were tried charged that the defendants Marcus and Saul Singer, “ feloniously did abstract and wilfully misapply the money, funds and property of the said corporation called Municipal Safe Deposit Company by wilfully and feloniously procuring and causing and wilfully and feloniously concurring in procuring and causing the said corporation called Municipal Safe Deposit Company to pay to a certain other corporation called Bolivar Development Corporation the sum of $2,009,518.45 to enable the said corporation called Municipal Safe Deposit Company to purchase, acquire and hold for its own, twenty-five shares of the stock of another corporation called Premier Development Corporation.” The defendant Herbert Singer was charged in the indictment with aiding and abetting the crime of the defendants Marcus and Saul Singer.
The sufficiency of the indictment has been challenged upon this appeal. The substantial basis of the attack upon it is that, while the opening part charges a violation of section 305 in the language of the statute, the statement of the facts constituting the violation of the section does not establish the crime charged and does not contain “ a plain and concise statement of the act constituting the crime * * *,” as required by section 275 of the Code of Criminal Procedure. The specific objection made is that the only facts stated are that the defendants caused the Municipal Safe Deposit Company to purchase stock of the Premier Development *399Corporation and pay therefor the sum of $2,009,518.45. This, it is said, states no crime, because the Municipal Safe Deposit Company did have the right to purchase stock in another corporation for corporate purposes. Further facts necessary to make such purchase a violation of section 305 of the Penal Law, it is urged, must be stated.
At common law a corporation had no right to purchase and deal in stocks of another corporation unless expressly authorized by law. (Holmes & Griggs Mfg. Co. v. Holmes & Wessell Metal Co., 127 N. Y. 252, 257.) The Municipal Safe Deposit Company was subject to the provisions of the Banking Law and as such had no power to purchase the stock of another corporation except for its own corporate purposes. (Gen. Corp. Law, § 14, subd. 3; Stock Corp. Law, § 18, as amd. by Laws of 1929, chap. 326.) There was considerable controversy on the trial as to the rights of this company to purchase the stock of another corporation, the People contending that it had no power to purchase stock under any circumstances, and the defendants that it .had general power to make such purchase. Upon this appeal, however, it is conceded by the People that this corporation had the power under section 14, subdivision 3, of the General Corporation Law to purchase stock for its corporate purposes.
The indictment charges in terms that the defendants misapplied the funds of the Municipal Safe Deposit Company in making such purchase. This is the equivalent of an allegation that the purchase was not made for corporate purposes. The indictment thus sufficiently states, in the language of the statute, the charge made against the defendants, and also identifies the transaction upon which the charge is based.
The defendants never had, and never claimed to have, any uncertainty as to the offense with which they were charged. Nearly a hundred pages of this record are taken up by discussion and argument in connection with the motion made to dismiss the indictment after a jury had been impanelled. The court made no express ruling upon the motion until the conclusion of the case and the trial went on without confusion and without indication of any uncertainty as to the charge upon which the defendants were being tried. The criticism of this indictment made upon the trial and repeated on this appeal is highly technical and of a character which the Court of Appeals has frequently held would not justify the reversal of a judgment of conviction except upon proof of definite prejudice to the defendants resulting therefrom. The test to be applied in determining the sufficiency of an indictment was recently stated by the Court of Appeals in People v. Farson *400(244 N. Y. 413). The court in its opinion said: “ The indictment is sufficient if it identifies the charge against the defendant so that his conviction or acquittal may prevent a subsequent charge for the same offense; notifies him of the nature and character of the crime charged against him to the end that he may prepare his defense; and enables the court upon conviction to pronounce judgment according to the right of the case.” This test was again stated in People v. Bogdanoff (254 N. Y. 16, 32). The court said, speaking of the common-law form and short form of indictments: “ Whatever form is used, an indictment must still remain a written accusation of a crime by the grand jury. Reasonably precise formulation should render it unnecessary to resort to extraneous proof, yet a faulty formulation of an indictment cannot require a reversal of a conviction unless there is doubt as to the meaning of the indictment.”
.The indictment in this case clearly meets all of the requirements as stated in the above cited cases. . The trial of the case was very protracted, occupying approximately ten weeks of the court’s time. The record on appeal contains many thousand pages of testimony. To allow a highly technical objection to the indictment to destroy the results of such a trial would be to sacrifice substance to form, and abandon much that has been accomplished to simplify procedure upon criminal trials. We are convinced that this indictment sufficiently informed the defendants and the court of the charge made and that no substantial prejudice resulted from its form.
The second error assigned by the appellants is that the trial justice misinterpreted the meaning of section 305 of the Penal Law. The court ruled that “ wilfully misapplies ” was equivalent to voluntarily doing the act charged and, therefore, permitted no defense to the effect that the act charged was done in good faith. It is contended that the word “ misapply ” implies an improper intention. Accordingly, it is said that a criminal intent must be proven as an essential element in the crime. This section of the Penal Law is copied in part from section 5209 of the United States Revised Statutes (U. S. C. A. tit. 12, § 592). Section 5209, however, contains the words: “ who embezzles, abstracts, or wilfully misapplies any of the moneys, funds, or credits of such Federal reserve bank or member bank * * * with intent * * * to injure or defraud such Federal reserve bank or member bank, or any other company, body politic or corporate, or any individual person * * *.”
The Legislature in formulating section 305 left out the word “ embezzles ” and the phrase " with intent * * * to injure or defraud,” and changed the penalty from that of a misdemeanor *401to a felony. This distinction makes the cases in the Federal court cited by appellants in construing section 5209 of the United States Revised Statutes inapplicable. The purpose of the Legislature in passing section 305 is clear. They intended to make the prohibition against misapplication of corporation funds absolute, provided it was willfully done. They did not intend that the good or the bad motives of the officers concerned in such misapplication should be an element of the crime. To read into this section the necessity of establishing criminal intent in the ordinary accepted sense would destroy in a large measure the efficiency of the statute by permitting the answer of good faith completely to excuse those involved in such misapplication. Thé Court of Appeals (People v. Harrison, 238 N. Y. 348), in construing section 751, subdivision 12, of the Penal Law, which makes it a crime for an election officer to willfully make “ a false statement of the result of a canvass of the ballots cast thereat,” in its opinion (at p. 351) said: “ Penal Law, section 751, subdivision 12, clearly uses the word ‘ wilfully ’ in connection with all the acts therein made criminal. The word ‘ wilfully ’ as used in that connection, alone and not in connection with the word ' maliciously ’ as in Wass v. Stephens (128 N. Y. 123, 128), means ' intentionally and by design ’ as distinguished from ‘ maliciously or wantonly.’ (People v. Marrin, 205 N. Y. 275, 279; People v. Foster, 204 App. Div. 295; affd., 236 N. Y. 610.) The lack of a bad motive or of a design to injure some one is no defense under the statute, but the burden is on the People to show that the act of making a false statement was intentional.” The trial court in this case applied this definition of “ willful ” consistently throughout the trial and in its charge.
It is claimed that the court, in spite of the construction placed upon this statute by it, permitted the introduction of a great mass of testimony which could be material only on the question of intent and which was most prejudicial to the defendants. This testimony was not received by the trial court upon the question of intent in the sense of showing criminal intent as commonly understood. This evidence was expressly restricted to the question of whether or not the act of the defendants constituted a willful misapplication of the funds of the safe deposit company. The complicated character of the transactions int the purchase of the stock justified a full investigation of the entire transaction. This necessarily •included an examination of the financial ventures of the defendants which are claimed to have been responsible for the indebtedness sought to be concealed by the transactions involved herein. The proof was not only proper but necessary in order to negative the *402possibility that this purchase of stock was undertaken for the corporate purposes of the safe deposit company. The court in its charge expressly limited the application of the testimony to that purpose. It not only so stated in its original charge, but restated it when the jury returned for further instructions. Its attitude on this subject was consistent and clear throughout the entire trial. The complaint made by the defendants that testimony was received to prove the existence of bad faith on their part, and that they were deprived of their opportunity to show their good intention and advice of counsel is baseless considered in the light of the true theory of the case.
Defendants Marcus and Saul Singer had been interested in a syndicate operating for their personal profit to maintain the price of units of bank stock and Bankus Corporation stock. The syndicate became involved and through the control which Marcus and Saul Singer exercised over the subsidiaries of the Bank of United States, the obligations of the syndicate in part were transferred to three finance companies. These finance companies were affiliated subsidiaries, the stock of which was almost entirely owned by the Bank of United States. Six months prior to the transaction complained of, the indebtedness of these finance companies to the Bank of United States amounted to less than $4,000,000, but the Superintendent of Banks had none the less criticised the loans as being too high. In the following six months, however, in spite of this criticism, the indebtedness of the finance companies to the Bank of United States had been increased through the assumption of syndicate obligations to $12,000,000. To make an apparent reduction in these loans, defendants arranged to transfer them to three safe deposit companies, also subsidiaries of the bank, one of which was the Municipal Safe Deposit Company. To carry out this arrangement, two corporations which had been incorporated by counsel for the bank and which had no assets were used. These corporations were the Premier Development Corporation and the Bolivar Development Corporation.
The form which the transaction took was as follows: The finance companies sold assets having a book value of approximately $5,000,000 to the' Premier Development Corporation and received in exchange all of the capital stock of that company. They then sold this stock to the Bolivar Development Corporation for $5,000,000. The Bolivar Development Corporation reappraised the" stock, divided it into three parcels, and sold them to the three safe deposit companies for a total of $8,000,000. The safe deposit companies simultaneously borrowed $8,000,000 from the Bank of United States and paid it to the Bolivar Development Corporation *403for this stock. The Bolivar Development Corporation paid $5,000,000 to the finance companies for the Premier stock and loaned Bankus Corporation, one of the finance companies, the remaining $3,000,000 on its unsecured note. The three finance companies then paid the $8,000,000 back to the Bank of United States in reduction of their loans.
The purely arbitrary appraisal of this stock by the defendants, in which its value was increased from $5,000,000 to $8,000,000, resulted in the Bolivar Development Corporation realizing a profit of $3,000,000. The Bolivar Development Corporation was wholly owned by the defendant Herbert Singer. While this $3,000,000 had been loaned to the Bankus Corporation and the entire transaction might have been rescinded within one year, the fact remains that if it were not rescinded the Bolivar Development Corporation could collect $3,000,000 from the Bankus Corporation. The control of this loan by the defendant Herbert Singer created a situation of grave danger to the stockholders of the Bank of United States and exposed these defendants to considerable temptation.
As its share in this transaction, the Municipal Safe Deposit Company borrowed from the Bank of United States $2,009,518.45, for which it had no use in the exercise of its ordinary corporate business. The defendants had moreover caused it to pay this sum for stock which, under these circumstances, it had no power to buy and which had been arbitrarily raised in value that very day by the defendants. The entire transaction was carried out after business hours. No meetings of the corporations involved were actually held. The officers of some of the corporations refused to sign the papers. The check of the Colonial Safe Deposit Company for $3,000,000 was put through with the single signature of Marcus contrary to the by-laws because the treasurer of that company refused to sign it. It would be difficult to imagine a clearer case of misapplication of corporate funds. No one can defend this transaction and no one has seriously undertaken to do so. It is said, however, that the act of the Municipal Safe Deposit Company was merely ultra vires and not criminal. Ultra vires it undoubtedly was, but section 305 of the Penal Law also makes it a crime.
There are many alleged errors claimed to have occurred during the course of this trial. These errors, however, are immaterial and may be disregarded in view of the fact that the transaction pleaded in the indictment was admitted. The only issues of fact attempted to be litigated by the defendants were with regard to the alleged refusal to disapprove of the project on the part of the Superintendent of Banks and the advice which defendants said *404they had received from counsel as to the legality and propriety of the transaction. Under the statute as we construe it neither of these questions is material either as a defense or in mitigation of the crime charged. (People v. Weed, 29 Hun, 628; affd., 96 N. Y. 625.) Any error committed in connection with either of these immaterial issues is to be disregarded under section 542 of the Code of Criminal Procedure. (See, also, People v. Montforte, 256 N. Y. 159, 162; People v. Warder, 231 App. Div. 215; Williams v. B. E. R. R. Co., 126 N. Y. 96,103.) This disposes of the questions arising on the cross-examination of Mr. Kresel, on the examination of the Superintendent of Banks, on the Egbert memorandum, and on the references to the refusals of Marcus and Saul Singer to testify before the grand jury and other minor points. A more detailed discussion of these errors would extend this opinion beyond reasonable limits and would serve no useful purpose.
A special plea is made on behalf of the defendant Herbert Singer who was charged with aiding and abetting the commission of this crime. While in one sense he was merely the law clerk of the general counsel and as such only carried out his orders, he did claim to have at least in part invented this scheme and he lent himself to its practical carrying out by personally purchasing all the stock in Bolivar Development Corporation. His participation in the transaction, therefore, cannot fairly be considered to have been that of a passive employee either of the bank or of Mr. Kresel. The question of his guilt or innocence was properly left to the jury and the jury was sufficiently instructed concerning the evidence relating specially to him.
The judgment of conviction against all three defendants should be affirmed.
Finch, P. J., Merrell and McAvoy, JJ., concur; Martin, J., dissents and votes for reversal and dismissal of the indictment.