People ex rel. Woronoff v. Mallon

■ The relators were held upon a warrant isstied out of the Magistrates’ Court in the city of Bew York charging them with the crime of grand larceny by false’pretenses under sections 442 and 947 of the Penal Law. Pending the hearing before the magistrate, a writ of habeas corpus was sued out to obtain the'

This proceeding raises the constitutionality of section 442 of the Penal Law and has been instituted for the purpose of having the courts pass upon the validity of this provision. If section 442 he a proper enactment then the information in this case sufficiently states a crime. If not, the prisoners must be discharged.

Section 941 of the Penal Law, part of article 86, designated “ Frauds and Cheats,” reads as follows:

“'Sec. 947. Verbal false pretense not criminal. A purchase of property by means of a false pretense is not criminal, where the false pretense relates to the purchaser’s means or ability to pay, unless the pretense is made in writing and signed! by the party to be charged.”

Section 442, part of article 40, designated “ Business and Trade,” provides, so far as material: “ Whenever property shall be purchased by aid of a statement relating to the purchaser’s means or ability to pay, made in writing and signed by the party to be charged1, and in said statement the party to be charged shall state that he conducts a specified1 kind of business andi keeps books of, account of said business, then, if at the expiration of any term of credit obtained by him in so purchasing said property he shall fail to pay for the same, he shall at all times during the period of ninety days subsequent to such failure to pay, upon the request of the persons from whom such property was purchased * * * produce within ten' days after such request is made his said books of account * * * and permit the persons from whom said property was purchased, * * * to fully examine such books of account * * * and to make copies of any part theréof.' Upon such request being made, failure to so produce within ten days said books of account * * * described in said statement shall be presumptive evidence that each' and every pretense relating

The -information, signed by F. Heinz Bleistein, a representative in America of the International Hide and Skin Company, states that he was requested, in November of 1911, by the relators, Woronoff and Ed'son, -to sell them a bill- of goods consisting of three bales of furs known as Chinese Thibet skins. He questioned the credit of the relators and asked for an individual financial statement, which they refused to give, stating that they never gave individual financial statements but gave statements to their banks and the commercial agencies of Bradstreet & Company and E. G. Dun & Company. They told Bleistein to consult the financial statements given to these agencies, representing them to contain a true and accurate condition of their finances. The seller consulted the statements made -to the mercantile agencies, and, finding that Woronoff and Edson were perfectly good according to the figures therein given, sold them a bill- of goods valued at $1,266.35. The following month the purchasers went into bankruptcy and after request in writing pursuant to the sections of the Penal Law above set forth failed and refused to exhibit their books for inspection. Annexed to the information were copies of the financial statements referred to and received from Bradstreet & Company and E. G. Dun & Company.

Woronoff and Edson, in these written statement, specified their business as manufacturers of furs at 80 University place, Manhattan, New York City, and! itemized their assets,'showing a balance over liabilities of $22,827.63 on- January 21, 19-11. These words appear above their signatures: “Above items and amounts are included in our books and are true to our personal knowledge. We keep a cash book, a ledger, a sales book, and other books.”

All the facts, therefore, necessary to make out an offense and

The creation of presumptions such as this is not new to legislation. In People v. Cannon ( 139 N. Y. 32 , 43, 10 N. Y. Crim. 541 ) we find this .statement: “ It cannot be disputed that the courts of this and other States are committed to the general principle that even in criminal prosecutions the Legislature may with some limitations enact that when certain facts have been proved they shall be presumed prima facie evidence of the existence of the main fact in question. (See cases cited in 103 N. Y. 143 , supra.) The limitations are that the fact upon which the presumption is to rest must have some fair relation to, or natural connection with the main fact.” This is the law applied in many cases. (Mobile, J. & K. C. R. R. Co. v. Turnipseed, 219 U. S. 35 ; Fong Yue Ting v. U. S., 149 U. S. 698 ; Hawkins v. Bleakly, 243 U. S. 210 , 213, 214; Reitler v. Harris, 223 U. S. 437 ; Cooley Const. Lim. [7th ed.] 409, 524, 526.)

The power of the Legislature to change rules of evidence as they existed at the common law and to limit, change and vary existing rules for the limitations of actions has been the subject of frequent consideration in the courts and has been uniformly held not to be affected or restricted by the constitutional limitation prohibiting the taking of life, liberty or property without due process of law. (People v. Johnson, 185 N. Y. 219 , 20 N. Y. Crim. 109 .)

The presumption declared unconstitutional in Bailey v. Alabama ( 219 U. S. 219 ) violated the Thirteenth Amendment to the Hnited 'States- Constitution, not the Fourteenth. The statute provided that any person who with intent to defraud his employer entered into a contract in writing for the performance

“ In the present ease it is urged that the statute as amended, through the operation of the presumption for which it provides, violates the Thirteenth Amendment of the 'Constitution of the United States and the act of Congress passed for its enforcement.” (P. 238.)

Agreeing with' this contention, the court considered it unnecessary to pass upon the questions, arising under the Fourteenth Amendment, recognizing, however, in the following paragraph, the rule which we here re-affirm.

“ This court has frequently recognized the general power of every Legislature to prescribe the evidence which shall be received, and the effect of that evidence in the courts of its own government. (Fong Yue Ting v. United States, 149 U. S. 698 , 749.) In the exercise of this power numerous statutes have been enacted providing that proof of one fact shall be prima facie evidence of the main fact in issue; and where the inference is not purely arbitrary.and there is a rational relation between! the two facts, and) the accused is not deprived of a proper opportunity to submit all the facts bearing upon the

This power of the Legislature is not denied by the appellants, but it is insisted that the presumption raised by section 442 is unreasonable and has no fair relation to or natural connection with the main fact. With1 this we do not agree.

The relators kept books — a cash book, a ledger, sales books and other books. In a statement to a mercantile agency given for the purpose of establishing their credit they said in writing that these books showed the cash in the bank, the accounts receivable, the merchandise, machinery and fixtures in their establishments, and also their liabilities, and that the assets over liabilities on January 21, 1911, amounted! to $22,827.63. In November of 1911, desiring to purchase a bill of goods, they referred the seller to this statement made to the mercantile agency and said that it was true of their present financial condition. A month later they went into voluntary bankruptcy and failed to pay any part of the bill purchased in November. Suppose the seller, with the statement in his possession, called upon the defendants and asked to see their books and they refused to permit any examination to be made, or suppose that upon a trial involving the truth of the financial statement given to the agency, these purchasers failed to produce or account for their books, would there not be a natural inference to be drawn from such refusal and failure that the books were not in accordance with1 the statement and1 that the latter was false? This provision of the Penal Law is but a statement of a natural inference to be drawn from such facts. The presumption is not disconnected from the main facts; it is not. arbitrary or unreasonable. It is the natural result to which the undisputed facts reasonably lead.

The criminal law of our State attempts to meet the new devices and methods of committing crime and to stamp out and punish fraud and theft in its many disguises. It had become

Presumptions are constantly arising from the proof of facts which move juries or courts to a determination. Because these presumptions are not classified 'uto statute law does not weaken their force in the particular case. “ Presumptive evidence and the presumption® or proofs to which it gives rise are not indebted for their probative force to any rules of positive law; but juries, in inferring'one fact from others which have been established, do nothing more than apply, under the sanction of the law, a process of reasoning, the force of which rests on experience and observation, and such inferences are presumptions of facts.” (Justice v. Lang, 52 N. Y. 323 , 329.) For example, an adverse inference may be drawn from the party’s failure to call a witness under his power and control (Adams v. Davidson, 10 N. Y. 309 ; People v. Hovey, 92 N. Y. 554 ), or by withholding or suppressing a written -instrument which he ought to produce (Whitney v. Sterling, 14 Johns. 215 ; Wylde v. No. R. R. Co. of N. J., 53 N. Y. 156 ; Timlin v. Standard Oil Co.,

So, in this case, experience and the habits and customs of ' honest merchants and trades people would naturally lead to the conclusion that if a purchaser refused to verify his financial statement by his books something was crooked and that he was dishonest. Section 442 of the Penal Law has merely codified this natural presumption. The presumption is not conclusive. It may always be explained away, or the refusal to produce the books justified.

It is said, however, that this section requires the defendant, to produce his books and thus- compels him to' be a witness against himself.

The section does not compel the defendant to produce his books. Having voluntarily given out to the world a copy of his books, the law affords him the opportunity to verify his statement by his books; if he fails to do so, the presumption is that falsity exists. He may still prove his hooks and verify the statement at any time or justify his refusal, and thus overcome the presumption. The fact that Ms refusal to comply with the section casts upon him the explanation is not compelling him to he a witness. All presumptions arising from facts cast upon the defendant the burden of overcoming them. Thus one in possession of stolen goods immediately after a larceny or a murder may be presumed to he guilty of crime and the burden of explanation be cast upon him. (People v. Galbo, 218 N. Y. 283 .) And in some'States this presumption is enacted into a statute. (Espy v. State, 32 Tex. 375 ; State v. Eubank, 33 Wash. 293 .) The law which permits such presumptions does not compel him to be a witness against Mmself. Such is tMs case. This presumption of a fact reasonably arising out of other established facts is entirely different from a law requiring a defendant to produce his books or papers for

These conclusions are supported by People v. Adams ( 176 N. Y. 351 ). Referring to section 344b of the Penal Code, making possession of papers used in playing policy presumptive evidence of possession thereof knowingly and in violation of law, this court said1, after quoting the above excerpt from People v. Cannon (supra): “ The Legislature, in the section under consideration, has gone a step further and provided that the possession by any person, other than a public officer, of the various papers and writings used: in carrying on, promoting or playing the game commonly called 1 policy,’ is presumptive evidence of possession thereof knowingly and in violation of the provisions of section 344a. In other words, the Legislature has cast the burden of proof upon the person who has in his possession these incriminating papers. The fullest opportunity is afforded him to rebut, this statutory presumption. The exercise of this power is clearly within constitutional limitations and calculated to aid the People in prosecuting persons engaged in this form of gambling.” (P. 361.)

These statutory presumptions are scattered! through our Penal Law, andi it is rather late to question their validity. For instance, section 1898 of the Penal Law makes the possession by any person, other than a public officer, of any of the weapons specified in section 1897 presumptive evidence of possession with intent to use the same in violation of law. Section 975 malees the possession of any papers used in a lottery* presumptive evidence of the possession with guilty knowledge. Section 1746 of the Penal Law requires pharmacists and druggists to keep books which shall be open for inspection, and subdivision (j) thereof provides that every manufacturer of such substances

The Conservation Law, (Cons. Laws, chap. 65) is full of presumptions. It gives the open seasons for birds, deer and other animals. Section 181 thereof provides as follows: “ Possession of .quadrupeds, birds or fish, or of parts thereof, during the time when the taking of the same in this State is prohibited, or when the possession of the same after the close of the open season is not permitted, shall be presumptive evidence that the same was unlawfully taken by the possessor.” And section 182 makes a violation of the law a misdemeanor.

Section 393 of the Code of Criminal Procedure permits a defendant to testify in his own behalf, and in this res-peet modifies the law as it was prior to 1869. (People v. Courtney, 94 N. Y. 490 .) “ B'ut,” says the section, “ his neglect or refusal to testify does not create any presumption against him.” I know of nothing to prevent the Legislature from wiping out this last clause -and thereby permitting all the natural inferences and presumptions of fact that spring out of the failure of the defendant to explain away damaging and inculpating testimony.

And the same natural presumption would arise, but for section 393, through the failure of the defendant to account for or produce his books when the evidence in the case indicated them to be false. The statute in this case goes no further than to say that under the circumstances stated the natural presumptions shall follow.

The relator in the present case says to the merchant; “ I want a bill of goods; I have $20,000 to pay for them, and my books

It is said that the case of People v. Gibson ( 218 N. Y. 70 , 34 N. Y. Crim. 318 ) is a barrier to these conclusions. This case holds that the defendant cannot be compelled, by subpoena duces tecum to produce his books and papers in court, and that, therefore, he cannot be requested in open court before the jury to produce them. Such action would1 be similar to subpoenaing the defendant to be a witness or asking him in open court to take the stand, but nothing in the section of the Code under discussion compels the defendant to be a witness, against himself or to produce his books and papers.

The presumption that his statements are false arises naturally out of the other facts which must be proved, and the ^statute merely authorizes a conclusion to which reasonable men would arrive from these facts. S'o long as the presumption created by the statute arising out of these proved facts is a logical deduction from them, or is reasonable and not arbitrary, the legislation is not constitutional. (Chamberlayne on Evidence, vol. 2, § 1119.)

The protection afforded the defendants under the principles enunciated in People v. Gibson should not be extended beyond

The order appealed from should be affirmed.

■Chase, Cuddeback and Cabdozo, J'J., concur; Hiscock, Ch. J., Colliw and Hogaw, JJ., dissent.

Order affirmed.