People v. Chesler
| Decision Date | 01 May 1980 |
| Docket Number | No. 1,1 |
| Citation | 428 N.Y.S.2d 639,50 N.Y.2d 203,406 N.E.2d 455 |
| Parties | , 406 N.E.2d 455 The PEOPLE of the State of New York, Appellant, v. Lawrence D. CHESLER, Respondent. (Appeal) (two cases). |
| Court | New York Court of Appeals Court of Appeals |
On a charge of larceny in violation of section 79-a of the Lien Law, a defense of actual repayment to creditors based on subdivision 2 of that section is an ordinary defense and not an affirmative defense. To the extent that the application of section 155.15 of the Penal Law would classify as an "affirmative defense" the related "good faith" defense based on the contention that, even if the payments in question were not actually made to creditors as required by subdivision 2, defendant nonetheless in good faith believed them to be at the time, such application would be unconstitutional because it would shift the burden of proof to defendant.
In 1969 Local 246 of the Journeymen Barbers' International Union of America of Rochester embarked on the construction of an apartment house project to be located in the Town of Greece in Monroe County. Barbers Realty and Holding Corporation was formed as the corporate vehicle for the project. Vincent A. Verrone, business agent for the union, became the corporate president and Vincent J. Rallo was appointed secretary. After another law firm had been legal counsel for the project for a year and a half, when additional financing was needed the corporation retained the law firm of which defendant Lawrence D. Chesler was a partner. Inasmuch as defendant customarily handled the firm's commercial transactions, he was assigned to work with the new client.
On August 17, 1971 the corporation obtained a building loan from a New York City lender in the amount of $3,440,000. Defendant's law firm represented the corporate borrower on the closing and arranged for the deposit of a portion, said to be $190,109.45, of the proceeds of the construction loan in the law firm's special trust account for the purpose of paying certain creditors. Thereafter defendant, assertedly at the direction of Verrone or Rallo, drew checks on the account to a number of creditors and on occasion to Verrone and Rallo, allegedly as repayment of funds they were said to have advanced on behalf of the corporation.
Defendant was indicted on four charges arising out of his participation in these transactions one count for common-law larceny, a second count for larceny in violation of section 79-a of the Lien Law and a third count for conspiracy, all in one indictment, and a fourth count of criminal facilitation in the second indictment. In January, 1974 the indictments against defendant were dismissed on the ground that there was insufficient evidence before the Grand Jury to sustain the charges and for the further reason that the New York State Organized Crime Task Force had exceeded its authority in conducting the underlying investigation and obtaining the indictments. The Appellate Division reversed the dismissal and reinstated the indictments (46 A.D.2d 518, 363 N.Y.S.2d 851), and we affirmed (People v. Rollo, 39 N.Y.2d 217, 383 N.Y.S.2d 271, 347 N.E.2d 633).
Defendant then proceeded to trial in Supreme Court, Monroe County, in September, 1977. The jury acquitted defendant of common-law larceny and conspiracy but found him guilty of larceny in violation of section 79-a of the Lien Law and of criminal facilitation. On appeal the Appellate Division reversed both convictions and granted a new trial on two separate grounds first, with respect to the larceny conviction, that the Trial Judge had erroneously charged that the defense of repayment under subdivision 2 of section 79-a of the Lien Law was an affirmative defense which defendant was required to prove by a preponderance of the evidence and second, with respect to both convictions, that the court had also erred in refusing to charge that the counts of the indictment must be proved by reference to the transactions specified in the bill of particulars (evidence of other transactions having also been received in evidence to show intent or motive, absence of mistake and a common scheme or plan under People v. Molineux, 168 N.Y. 264, 61 N.E. 286). 1 The People were granted leave to appeal by a Judge of our court. We now affirm the disposition below, and in doing so, because the case must go back for a new trial, uphold another of the contentions advanced by defendant.
As appellant prosecutor now concedes, and as we agree for the reasons stated in the memorandum opinion at the Appellate Division (72 A.D.2d 792, 418 N.Y.S.2d 962), it was error, on the charge of larceny in violation of subdivision 1 of section 79-a of the Lien Law to have instructed the jury that a defense under subdivision 2 of that section based on repayment to creditors of advances made by them was an affirmative defense which defendant had the burden of proving by a preponderance of the evidence (see Penal Law, § 25.00, subd. 2). On the contrary, this is an ordinary defense which the People have the burden of disproving beyond a reasonable doubt (Penal Law, § 25.00, subd. 1). (Cf. People v. Rosano, 69 A.D.2d 643, 419 N.Y.S.2d 543.)
In its opinion the Appellate Division distinguished the subdivision 2 defense from what it termed "the affirmative defense of good faith contained in section 155.15 of the Penal Law", 2 and characterized the former as "a different and more substantial showing than that provided in the Penal Law that the appropriation was made in a good faith (but perhaps erroneous) claim of right" (72 A.D.2d 792, 794, 418 N.Y.S.2d 962, 965). Both the People and defendant have addressed the status of this related "good faith" defense in our court, apparently recognizing that on a new trial, defendant may claim that, even if the People prove beyond a reasonable doubt that the payments made by him were not in fact repayments within the contemplation of subdivision 2 of section 79-a, at least he believed in good faith that they were such repayments at the time he made them. Because of what appears to be the probability that defendant will present both defenses on a new trial, it is appropriate that we address defendant's contention that to the extent that section 155.15 of the Penal Law would make the latter "good faith" defense an affirmative defense the statute is unconstitutional because it impermissibly shifts the burden of proof to the defendant.
The larceny count of which defendant was found...
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