People v. Fernandez

• Decision Date: 22 February 1978
• Citation: 93 Misc.2d 127,402 N.Y.S.2d 940
• Parties: The PEOPLE of the State of New York v. Vincent FERNANDEZ and Joseph Haley.
• Court: New York Supreme Court

Page 940

402 N.Y.S.2d 940

93 Misc.2d 127

The PEOPLE of the State of New York v. Vincent FERNANDEZ and Joseph Haley.

Supreme Court, Criminal Term, Queens County, Part 10.

Feb. 22, 1978.

Melvin M. Lebetkin, Kew Gardens, for defendant Haley.

Raymond S. Sussman, Brooklyn, for defendant Fernandez.

John J. Santucci, Dist. Atty., Kew Gardens, for plaintiff.

HAROLD HYMAN, Justice.

Defendants move to dismiss the indictment on constitutional and other grounds hereinafter more fully discussed.

The section involved, 190.40 of the Penal Law, best known as the "loansharking" section, provides as follows: "A person is guilty of criminal usury when, not being authorized or permitted by law to do so, he knowingly charges, takes or receives any money or other property as interest on the loan * * * , at a rate exceeding twenty five percentum per annum or the equivalent rate for a longer or shorter period."

Defendants contend, among other things, that by the use of the language, "not being authorized or permitted by law", that the crime is defined by reference to "other laws without specification of such other laws" and therefore the statute is void; that, at the very least, it should specify either the Banking Law or the General Obligations Law to which a person may look prior to making a loan suspected of being proscribed, but which might be authorized under such "other laws"; that at best the statutory language is such that it furnishes notice only to a lawyer specializing in banking law; that a penal statute may not merely incorporate the "general body of law" by reference in defining a crime, but must, if incorporating other provisions of law, do so with specificity; that by such lack of specificity it is clearly violative of defendants' rights to "due process of law"; that a criminal statute must be definite as to the acts which it prohibits and that criminal sanctions are not supportable if they are imposed under vague and undefined commands; that constitutional certainty, in the definition of crime, is "fair warning" of the statutory prohibitions to those of "ordinary intelligence", that is, "notice of the proscribed activities which is reasonable when gauged by common understanding and experience." In sum, defendants contend that the statute lacks constitutionality in that a person of "ordinary intelligence" would not know where to look to determine the issues of "authorization" or "permission", and that it was legislatively incumbent to have delineated the boundaries of conduct with specificity if it be by reference, in order to overcome the presumption of the loan being valid.

The statute finds its origin in the salutary purpose of attempting to stamp out one of the most heinous, virtually bloodsucking, criminal activities of all times, namely, "loansharking". One need not review the history, its financial and physical effects, nor the awesome incidents occasioned by innocents entering into loan agreements with members of such redoubtable and nefarious business venturers. Sufficient to state that the incidents were of such magnitude of degradation as to cause the enactment in 1965 of former Penal Law sections 2401 and 2403. This simultaneously was followed by the Governor's memorandum, which stated in part: "the investigation by the State Commission of Investigation into the loanshark racket (which) disclosed that the organized criminal world is engaged in a vast and highly lucrative usurious money lending business in this State. This element charges unconscionable annual rates of interest of 250 percent and in some cases, 2000 percent, and enforces its obligations by fear, threats and violence.

The Commission's public hearings revealed that loansharking is producing millions of dollars in revenue for organized crime. * * *

During the course of the Commission's work, it became apparent that new laws were required to fill the existing vacuum in New York's usury laws if the loanshark racket is to be stopped. Accordingly, I requested the Attorney General, the Superintendent of Banks and my counsel to review the public testimony presented during the investigation and, working with the State Commission of Investigation, to make recommendations for legislation. This bill is the result of that effort. It also embodies the recommendations made at the Commission's public hearings by representatives of the New York County District Attorney's office, the Queens County District Attorney's office, the New York City Police Department, the Waterfront Commission of New York Harbor and the Suffolk County Police Department. * * *

This bill provides realistic sanctions which should prove to be a substantial deterrent to loansharking ". (See June 7, 1965, Governor's Memoranda on Approving L.1965, c. 328, McKinney's 1965 Session Laws of New York, pgs. 2101, 2102.)

Upon its original enactment in 1965 section 2401 contained the proscription "except as otherwise authorized or permitted by law" and which provided that: "Nothing in this section shall in any way be deemed to modify, alter or amend the provisions of the general obligations law, the banking law, the general business law or any other law which limits or defines lawful rates of interest in this state."

Resulting from amendments to the "new" Penal Law in 1967, as prepared by the Temporary Commission on Revision of the Penal Law and by the Laws of 1976, chapter 424, effective September 1, 1976, the "1965" Penal Law sections aforementioned were divided into two separate and distinct sections, they became namely, sections 190.40 (Criminal Usury in the Second Degree) and 190.42 (Criminal Usury in the First Degree) with the last paragraph of the "old" section 2401 being deleted, but both newly amended sections as aforestated still containing the proscription with certain additional verbiage "when, not being authorized or permitted by law to do so."

One of the major objections of defendants as to the constitutionality of the aforestated sections of the Penal Law is the Legislature's failure to denominate the specific sections of "other laws" to which they refer. The objection, although not stated so to be, seems to be founded on Article 3, Section 16 of the Constitution of the State of New York, which states, that: "No act shall be passed which shall provide that any existing law, or any part thereof, shall be made or deemed a part of said act, or which shall enact that any existing law, or part thereof, shall be applicable, except by inserting it in such act." (Emphasis supplied)

It has been held that: "The evil which this provision of the Constitution was designed to correct was the incorporating into legislative enactments by a mere reference to some existing statute a clause or provision affecting public or private interests to an extent or in a manner not disclosed upon the face of the acts itself, and of which the legislators might be utterly ignorant at the time of its enactment." (People v. Banks, 67 N.Y. 568; People v. Lorillard, 135 N.Y. 285, 31 N.E. 1011; People v. Squire, 107 N.Y. 593, 14 N.E. 820, affd. 145 U.S. 175, 12 S.Ct. 880, 36 L.Ed. 666.)

But, there is the further curative, provision of the Constitution, Article 3, Section 21, which specifically refers to Section 16, and which provides, that: "Sections 15, 16 and 17 of this Article shall not apply to any bill, or the amendments to any bill, which shall be recommended to the legislature by commissioners or any public agency appointed or directed pursuant to law to prepare revisions, consolidations or compilations of statutes. But a bill amending an existing law shall not be excepted from the provisions of sections 15, 16 and 17 of this article unless such amending bill shall itself be recommended to the legislature by such commissioners or public agency."

Further in approaching this question, we note the observation made in Montgomery v. Daniels, 38 N.Y.2d 41, at p. 54, 378 N.Y.S.2d 1, at p. 11, 340 N.E.2d 444, at p. 451, stating: "In approaching this question (constitutionality), the court has recognized that as a matter of substantive law every legislative enactment is deemed to be constitutional until its challengers have satisfied the court to the contrary (People v. Broadie, 37 N.Y.2d 100, 117, 371 N.Y.S.2d 471, 332 N.E.2d 338; People v. Pagnotta, 25 N.Y.2d 333, 337, 305 N.Y.S.2d 484, 253 N.E.2d 202; Matter of Van Berkel v. Power, 16 N.Y.2d 37, 40, 261 N.Y.S.2d 876, 209 N.E.2d 539; I. L. F. Y. Co. v. Temporary State Housing Rent Comm., 10 N.Y.2d 263, 269, 219 N.Y.S.2d 249, 176 N.E.2d 822, app. dsmd. 369 U.S. 795, 82 S.Ct. 1155, 8 L.Ed.2d 285), (and that) "There is generally a very strong presumption that 'the Legislature has investigated and found the existence of a situation showing or indicating the need for or desirability of the legislation' " (Matter of Taylor v. Sise, 33 N.Y.S.2d 357, 364, 352 N.Y.S.2d 924, 308 N.E.2d 442; Matter of Van Berkel v. Power, supra ; and see People v. Broadie, supra )." But, in addition to the foregoing general rule that every presumption is in favor of the constitutionality of the statute, an act which might otherwise be void under section 16 of article 3 of the New York State Constitution will also be presumed to be constitutional in the absence of evidence to the contrary, to have been reported by commissioners appointed pursuant to law to revise the statutes (People v. Petrea, 92 N.Y. 128; People v. Ebelt, 180 N.Y. 470, 73 N.E. 235).

To determine whether such presumption may be deemed determinative as a "fact" the court need not hold a hearing, but rather may refer to legislative journals, the original act, or such other permissible evidentiary source available to it (People v. Petrea, supra ). Here, as to these statutes, the sources have been shown to be and are impeccably unimpeachable and definitively within the purview of Article 3, Section 21.

Not only is there a strong presumption that a statute duly enacted by the Legislature is constitutional,...