People v. Shakun

• Decision Date: 28 May 1929
• Citation: 167 N.E. 187,251 N.Y. 107
• Parties: PEOPLE v. SHAKUN.
• Court: New York Court of Appeals Court of Appeals

251 N.Y. 107

167 N.E. 187

PEOPLE

v.SHAKUN.

Court of Appeals of New York.

May 28, 1929.

Frank Shakun was convicted of a violation of Penal Law, § 2400, and, from a judgment affirming the judgment of the Court of Special Sessions (225 App. Div. 797, 232 N. Y. S. 845), he appeals.

Reversed, and information dismissed.Appeal from Supreme Court, Appellate Division, First Department.

John T. Loughran and Philip Wolinsky, both of New York City, for appellant.

Joab H. Banton, Dist. Atty., of New York City (Archibald Firestone, of New York City, of counsel), for the People.

KELLOGG, J.

The defendant loaned a sum of money, in excess of $200, at a usurious rate of interest, to Charles W. Megonegal, who has described himself as the owner of a ‘print shop.’ For the better security of the loan, the defendant took from Megonegal a chattel mortgage upon certain articles contained in the print shop, which are described in the instrument as follows: ‘One 10x15 C. & P. Printing Press with motor & equipment; One 30? C. & P. Power Paper Cutter; Two City Stands with all type; One Hamilton Cabinet with all type; One Vecto Heater Furnace; Two Electrix Fans; All furniture, fixtures, chattels and supplies.’

Section 2400 of the Penal Law (Consol. Laws, c. 40) provides: ‘A person who takes security upon any household furniture, sewing machines, plate or silverware in actual use, tools or implements of trade, wearing apparel or jewelry, for a loan or forbearance of money, * * * conditioned upon the payment of a greater rate than six per centum per annum * * * is guilty of a misdemeanor.’ The defendant was convicted of a violation of the section upon the theory that, in accepting the mortgage from Megonegal, he had taken security, for a usurious loan, upon ‘tools or implements of trade.’ The section incorporates the provisions of Penal Code, § 378, as amended by chapter 72, § 1, of the Laws of 1895, and chapter 661, § 1, of the Laws of 1904. Prior to the year 1895, section 378 made the mere taking of usury, irrespective of the giving of any pledge, a criminal offense. Cook's Criminal and Penal Code 1894. The amendment of 1895 added a provision making criminal the loaning of personal credit at a usurious rate, where certain named articles were taken in pledge therefor. The amendment of 1904 eliminated, in their entirety, the provisions which declared the taking of usury to be a crime, and substituted therefor provisions in respect to the taking of security upon certain named property for the protection of an usurious loan. These identical provisions, under the heading, ‘Taking Security upon Certain Property for Usurious Loans,’ instead of the heading ‘Taking Security for Usurious Loans,’ now constitute section 2400 of the Penal Law. Consol. Laws, c. 40. In the year 1895, the Legislature had passed an act making criminal the exaction of a greater interest rate than 6 per cent. upon any loan of a less sum than $200, made by any person or corporation, other than a corporation specifically empowered by the act to make such minor loans at a higher rate. Laws of 1895, c. 326. These provisions, in substantially the same form, now appear in section 368 of the Banking Law. Consol. Laws, c. 2. Thus, although the taking of usury generally has ceased to be criminal, through the amendment of 1904 its taking, without security given, in the instance of certain minor loans, has remained an offense.

Evidently, the Legislature has conceived that, in the practice of exacting usury from large borrowers, there lay no evil to be corrected. Likewise was there none in taking security, for the protection of a usurious loan, upon personal property other than chattels necessary to the maintenance of life. On the other hand, persons, so necessitous that they must borrow paltry sums; persons impelled by actual want to pledge to bare necessities of life-these must be protected from oppression by the usurer. Accordingly, it was made a crime to take usury upon loans of sums less than $200. So also it was rendered criminal for the usurer to take in pledge a borrower's ‘household furniture,’ his ‘plate or silverware in actual use,’ his ‘wearing apparel,’ his ‘tools or implements of trade.’ It was the legislative concept that, for the public good, there must be preserved to the needy borrower, free from risk of mortgage seizure, such articles as a bed in which to sleep, a stove at which to cook, a table and utensils with which to eat, and clothes to cover his nakedness. Likewise the borrower should similarly be protected in the possession of the tools of his trade. They are ‘necessary for upholding life’ (Henry v. Sheldon, 35 Vt. 427, 82 Am. Dec. 644); they ‘enable the debtor to obtain a livelihood for himself and family’ (Martin v. Buswell, 108 Me. 263, 80 A. 828). The legislative thought in respect to the evil inhering in the pledge of an artisan's tools finds apt expression in the familiar quotation: ‘No man shall take the nether or the upper millstone to pledge; for he taketh a man's life to pledge.’ Deuteronomy, c. 24, § 6. Self-evidently, legislative protection, through these criminal statutes, against the taking of usury, was intended to be cast about none other than the poor and necessitous. There was no thought to protect the opulent. Equally it was the legislative intent narrowly to restrict the class of articles which might not be pledged in usury. There was no thought to save to the manufacturer or trader his accumulatedassets. The costly machinery of an extensive business was not entitled to protection; only the tools by which an artisan earned a livelihood should be secured from seizure. These were the clear legislative purposes; in the light of them must the phrase ‘tools or implements of trade,’ contained in the section, be interpreted.

In the states of Massachusetts and Vermont it has been held that the printing presses, types, and cases of a printer are not ‘tools' within the meaning of statutory provisions exempting from attachment and execution the tools of any debtor. Danforth v. Woodward, 10 Pick. (Mass.) 423, 20 Am. Dec. 531;Buckingham v. Billings, 13 Mass. 82;Spooner v. Fletcher, 3 Vt. 133, 21 Am. Dec. 579. In Buckingham v. Billings, supra, the court said that it was led to the conclusion that the term ‘tools' was used in the exempting statute to designate those implements which are commonly used by the hand of one man, in some manual labor necessary for his subsistence. In Spooner v. Fletcher, supra, the court said that the word ‘tools' implied instruments of small value, used with the direct application of manual strength; that it was not to be supposed that the Legislature ever intended to grant privileges or advantages for the amelioration of the condition of the poor and yet have the opulent turn those same grants to the enhancing of their wealth. On the other hand, in the states of Connecticut, Kansas, and Louisiana, it has been held that the printing presses of a printer are tools within the meaning of exempting statutes. Patten v. Smith, 4 Conn. 450, 10 Am. Dec. 166; Jenkins v. McNall, 27 Kan. 532, 41 Am. Rep. 422; Prather v. Bobo, 15 La. Ann. 524.

A reason for the divergence in decision will be found in a difference of judicial opinion as to whether the exempting statutes should be construed strictly or liberally. Thus, the Massachusetts court said of the exempting statute under consideration: ‘This statute, as it is in derogation of the common rights of creditors to secure their debts out of the...