
    SUPREME COURT—APPELLATE DIVISION—FIRST DEPARTMENT,
    July 1915.
    THE PEOPLE v. HYMAN FISH.
    (169 App. Div. 22.)
    Forgery —Alteration of books by employee.
    A bookkeeper who, without profit or gain or the expectation thereof on her part, by direction and approval of a member of the firm by whom she is employed and a proposed assignee of 'the firm’s property, alters a book of the firm so that the proposed assignee will not appear thereon as a creditor, is not guilty of forgery within the meaning of subdivision 1 of section 889 or within the meaning of subdivision 4 of the second portion of said section.
    Appeal by the defendant, Hyman Fish, from a judgment of the Court of General Sessions of the Peace in and for the county of New York, rendered against him on the 29th day of January, 1915, convicting him of the crime of forgery in the third degree, and also from two orders denying his motions for an arrest of judgment and for a new trial.
    
      William Travers Jerome, for the appellant.
    
      Robert C. Taylor, for the respondent.
    
      
      
        See Note, Vol. 24, 361.
    
   Hotchkiss, J.:

The indictment charged defendant with forgery in the third degree in that he aided and abetted one Gertrude Gutman, an employee of Moses Gutman and Harry Gutman, copartners in trade, in corruptly altering a certain account book appertaining to the business of the firm. It is apparent, therefore, that whether defendant was guilty of a crime must depend upon whether the act of Gertrude Gutman was a criminal act. Briefly, the salient facts of the alleged crime, as proven by the witnesses for the People, were as follows: The two Gutmans were copartners under the firm name of M. Gutman & Son, and Gertrude Gutman was a bookkeeper in their employ. Among the regular books of entry kept by the firm was one called a deposit book, in which it was the custom to enter the firm’s bank deposits, and to record in such book, among other things, the name of the person from whom the check was received, the date of the deposit, and the bank in which such deposit was made. On or about November 7, 1912, the firm, being then in embarrassed circumstances, borrowed from the defendant $1,000, the proceeds of which loan, amounting to $982.50, was represented by defendant’s check, and thereupon the following entry was made in said deposit book: “ Germania; Nov. 7; H. Fish; $982.50,” meaning that on that day they had received from defendant his check for $982.50 and had deposited the same in the Germania Bank. Thereafter defendant and Moses Gutman had a number of interviews at which the business and affairs of the firm were discussed. From information obtained at these interviews, it came to defendant’s knowledge that the firm was insolvent, and he advised the members thereof to make a general assignment for the benefit of creditors, and also procure certain friendly creditors to thereafter file a petition in bankruptcy against the firm, the purpose of the assignment being to lay a foundation for an application to thé Bankruptcy Court to appoint the assignee the receiver of the firm in bankruptcy. In pursuance of this advice, it was arranged that the defendant should become the assignee of the firm, and on December 16, 1912, the firm executed and delivered to defendant an instrument of assignment which was duly filed, and shortly thereafter and on the same day an involuntary petition in bankruptcy was filed against the firm, in pursuance of which it was adjudicated a bankrupt. Early on the morning of December sixteenth, and some two hours before the execution of the assignment, as the result of an arrangement with Moses Gutman and on the statement of defendant—who was about to become assignee of the firm—that it was desirable that he should not appear to be a creditor thereof, Moses Gutman delivered to the defendant checks and notes, representing receivables of the firm, of the face value of $1,000, in payment of defendant’s said loan, which was not then due. Defendant then asked if his name appeared on the firm books, and having been told that it appeared in the deposit book, defendant said that the entry must be gotten rid of, and under the defendant’s instructions Gertrude erased from such entry the name H. Fish ” and substituted 66 S. Katz ” therefor, the defendant being present while the act of erasing took place and expressing his approval of the result when the alteration was completed. It appeared beyond dispute that Moses Gutman was present and took part in the above conversation. With respect to the instructions under which Gertrude acted, Moses swore as follows: “ We went into the office and we found out that the name did appear in the deposit book * * * so he [defendant] told my daughter there in the office to mark it. She asked me and I said, 6 Well, I am not the boss any more, Mr. Fish is the boss, he is going to take the business over, and you got to listen to him now. I am not the boss any more. Well, if he tells you, do it, he is the boss,’ ” whereupon Gertrude proceeded to make the alteration. It is manifest from the foregoing that at the time the act of altering the book took place the firm of M. Gutman & Son was still in possession and control of its business and of the books appertaining thereto, and that Gertrude was the servant of the firm and subject to the control of the members thereof. Whatever she did in the matter of altering the deposit book was done by the direction of Moses Gutman. Conceding that the defendant also instructed Gertrude to make the alteration and that he aided and abetted her in making the same, nevertheless Gertrude’s authority was derived from Moses, who was necessarily the principal, and whatever defandant did must be taken to have been done as the agent of or with the acquiescence of Moses.

The learned district attorney asserts that the defendant was indicted and convicted under the 1st subdivision of section 889 of the Penal Law, which he argues is sufficient in itself to sustain the conviction, but if this be not so, then that the 1st subdivision of section 889 read in conjunction with the 4th subdivision of the second portion of section 889 (as added by Laws of 1912, chap. 342), affords ample foundation for the judgment under review. Section 889 bears the title “ Forgery in third degree.” Subdivision 1 of the first portion of the section is as follows: “A person who: 1. Being an officer or in the employment of a corporation, association, partnership or individuals falsifies, or unlawfully and corruptly alters, erases, obliterates or destroys any accounts, books of accounts, records, or other writing, belonging to or appertaining to the business of the corporation, association or partnership. * * * Is guilty of forgery in the third degree.” It was settled by the decision in People ex rel. Isaacson v. Fallon (202 N. Y. 456; 26 N. Y. Crim. 367) that the above subdivision was intended to protect employers against the acts of their own employees or others having a duty to keep true books of account of the business of the employer and who sought to defraud by means of false entries or alterations; that it 6 was intended to be a protection against domestic or internal attack, against treachery and betrayal from within.’ ” It is apparent, therefore, that an employee who by the direction of or with the approbation or concurrence of his employer makes an alteration in the account books of the latter is not guilty of a crime- within the meaning of the above subdivision, and that we must look further for authority to sustain the conviction of this defendant. Subdivision 4 of the second portion of section 889 to which I have referred provides that “ the altering, erasing, obliterating or •destruction of any account, book of account * * * by any person whether by his own hand or the hand of another, if made with intent to defraud creditors or to conceal a crime, or to conceal from creditors or stockholders or other persons interested matters materially affecting the financial condition of any individual, corporation, association or partnership * * * shall render such person guilty of forgery in the third degree, within the meaning of this section; but this provision shall not apply to any clerk, bookkeeper or other employee who, without personal profit or gain, merely executes the orders of his employer.” There is no claim on the part of the People that the act of Gertrude Gutman in making the erasure in question involved any “ personal profit or gain ” or the expectation thereof on her part. As I have shown, the proof was that she did no more than execute the order of her employer. Under these circumstances the evidence wholly failed to show the commission of any crime on her part, and for this reason the conviction of the defendant was without evidence to sustain it.

The judgment should be reversed and the defendant discharged.

Ingraham, P. J., Scott and Dowling, JJ., concurred.

Clarke, J.:

I concur. Defendant was indicted under one clause of a section of the Penal Law, and the conviction is sought to be sustained under another which is not applicable.

Judgment reversed and defendant discharged. Order to be settled on notice.  