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[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 378 As a suggestion is made in relation to the right of the defendant to appeal we will dismiss the subject by saying that the legislature in providing against delay through preliminary appeals by the defendant, did not intend that the sufficiency of an indictment should be passed upon in sections, a part before and a part after final judgment. When the People appealed from the entire judgment rendered by the Trial Term and later from a part of the judgment rendered by the Appellate Division, the defendant was expressly authorized by statute to appeal from the remainder so that the soundness of the indictment could be determined as an entirety after one argument by a single judgment. (Code Cr. Pro. § 519, subd. 2.)
The first count of the indictment must fall because there is no statute which requires the directors of a trust *Page 380 company to diligently and honestly administer its affairs. The common law requires it, but this count is for the alleged violation of a statute and it cannot be upheld unless facts are set forth showing that a statute has been violated. Mindful of this necessity the People try to make a statutory command out of the promise made by a director in the oath of office which he is required to take and file before entering upon his duties. As said by the learned Appellate Division: "The defendant is charged with the commission of a crime because he willfully omitted to do what he said he would do when he took his oath of office as director." A promise through an official oath to diligently and honestly administer the affairs of a corporation is not a command by the legislature to thus administer them, so as to meet the requirements of section 297 of the Penal Law. A promise to do or omit is not a command by the legislature to do or omit, even when the form of the promise is prescribed by statute. Although it is the duty of directors to so administer, the duty is not created by statute but springs from the common law. The duty of taking an oath was prescribed by statute but that duty the defendant performed. The duty of honest administration was not prescribed. The question is not whether the defendant violated his oath, but whether he willfully did an act expressly forbidden by law or willfully omitted to perform a duty imposed upon him by law, which means an act required or an omission forbidden by statute. (Brinckerhoff v. Bostwick, 99 N.Y. 185, 190.) The wrong done was the failure to obey the common law while the wrong charged was the failure to obey some statute when no statute commanded obedience.
There is a distinction between negligence for which a person is civilly liable and that for which he is criminally liable. According to the Penal Law no act or omission is a crime except as prescribed by statute. (Penal Law, § 22; Penal Code, § 2.) There is no longer any common-law crime in this state. The bare neglect of a legal duty *Page 381 is not a crime unless some statute so prescribes, although if such negligence caused special injury to an individual he would have his common-law action for the recovery of damages. Formerly whenever a legal duty of a public nature was imposed either by statute or common law a neglect of that duty was indictable, but this has not been the law, except where specially prescribed by statute, since the enactment of section 22 of the Penal Code. Where any duty is enjoined by law upon any public officer, a willful omission to perform such duty is punishable as a misdemeanor, unless made punishable otherwise by some special provision of statute. (Penal Law, § 1857; Penal Code, § 154.) The defendant, however, was not a public officer and was not indicted for neglect of duty as such. The count under consideration was for neglect of duty as director of a trust company and there is no statute making such neglect a crime.
As to the remaining counts the defendant insists that the command that a corporation shall not do a certain act is not a command that the directors shall not do the act. A corporation, however, is a mere conception of the legislative mind. It exists only on paper through the command of the legislature that its mental conception shall be clothed with power. All its power resides in the directors. Inanimate and incapable of thought, action or neglect, it cannot hear or obey the voice of the legislature except through its directors. It can neither act nor omit to act except through them. Hence a command addressed to a corporation would be idle and vain unless the legislature in directing the corporate body, acting wholly by its directors, to do a thing required or not to do a thing prohibited, meant that the directors should not make or cause the corporation to do what was forbidden, or omit to do what was directed. We think, as the Appellate Division held, that when the corporation itself is forbidden to do an act, the prohibition extends to the board of directors and to each director, separately and individually. *Page 382
The defendant further claims that the loan was not made to a director of the trust company but to a firm of which he was a member, and that the firm was a separate entity. This position overlooks the nature and effect of the obligations of copartners to their creditors. As was recently said by Judge CHASE: "The acts performed in the name of a partnership cannot ordinarily be considered apart from the persons composing it. A partnership is not like a corporation, which is a legal entity having certain rights and subject to defined liabilities. It has no independent existence. It has a name by which individuals conduct a joint business and in which there are accounts as such kept, and through which certain established equitable rights in marshalling assets are acquired. This court in Jones v. Blum (145 N.Y. 333), referring to a partnership, say: `It has been often pointed out that a partnership cannot properly be regarded as a legal entity separate and distinct from the several partners therein. For certain purposes this fiction may be very properly indulged. In keeping partnership accounts and in marshalling the assets of an insolvent or liquidated firm this is constantly done.'" (Matter of Peck, 206 N.Y. 55, 60.) The promise of a copartnership is joint as to all the members and several as to each. As between the partners themselves the assets are marshalled in equity so that joint assets are first used in the payment of joint debts and several assets in the payment of several debts. This rule, however, does not bind creditors who may select any partner and collect their claims wholly from the property of that partner. Therefore, when the trust company made a loan to the firm of Knapp Brothers all the members of the firm became liable jointly and each member thereof became liable severally to pay the debt. Regardless of the form of the transaction the loan was made to all and to each in the theory of law. The Banking Law should be construed in accordance with the obvious intention of the legislature so as to permit flexibility and to prevent looseness *Page 383 in doing business. The prime object is to protect the public, including depositors, and after that to enable the stockholders to secure a fair return from their investment. Banking institutions are not created for the benefit of the directors. While directors have great powers as directors, they have no special privileges as individuals. They cannot use the assets of the bank for their own benefit except as permitted by law. Stringent restrictions are placed about them so that when acting both for the bank and for one of themselves at the same time, they must keep within certain prescribed lines regarded by the legislature as essential to safety in the banking business. Hence, when the legislature commanded that loans exceeding in the aggregate one-tenth of its capital stock should not be made by any trust company to any director, "directly or indirectly," it intended to include such transactions as the one here involved. It did not mean to limit the prohibition to a director borrowing in his own name simply and not as a member of a firm. As was said by Chancellor WALWORTH under different but somewhat similar circumstances: "If a loan or discount is knowingly made for the benefit of a director, or of a firm with which he is connected in interest or as a copartner, it is a loan or discount to him, within the intent and meaning of the legislature, although the name of the director of this firm does not appear upon the discounted paper, or he does not guaranty the payment of the loan." (Bank Comrs. v. Bank of Buffalo, 6 Paige, 497, 506.)
The indictment does not charge more than one crime within the meaning of sections 278 and 279 of the Code of Criminal Procedure. It charged but one act, the making of a single loan of $2,500 to the firm of Knapp Brothers, composed of the defendant and others, but the crime was alleged in different counts to have been "committed in a different manner or by different means." The single act complained of constituted different crimes and "such crimes may be charged in separate counts" as expressly *Page 384 permitted by section 279, "so as to meet the evidence which might be presented on the trial." (People v. Rugg, 98 N.Y. 537,549; People v. Wilson, 151 N.Y. 403, 408.)
The indictment was sufficient in form to satisfy the requirements of sections 275 and 276 of the Code of Criminal Procedure. It does not charge that the defendant permitted or procured the act to be done, but that he permitted the act to be done by allowing and procuring it to be done. A person permits an act when he does not prevent it, although within his power and duty, or by actually doing it himself. Nor was it necessary to allege specifically in what precise manner he willfully permitted the act which was prohibited. According to the indictment he willfully permitted a certain loan, by allowing and procuring the loan to be made, but it does not allege how he procured it, whether by voting for it, or by influencing others to vote for it. The particulars constituting the offense are matter of evidence which need not be set forth. In an indictment for burglary it is sufficient to allege that the defendant "did break and enter" a certain building without alleging that he broke down the front door with a sledge hammer and thus went in, or that he climbed up to a window on a ladder, pried up the window with a jimmy, and thereby effected an entrance. (2 Bishop's Cr. Pro. §§ 129, 140.)
The order appealed from should be affirmed.
CULLEN, Ch. J., HAIGHT, HISCOCK, CHASE and COLLIN, JJ., concur; WILLARD BARTLETT, J., not voting.
Order affirmed. *Page 385