Opinion
December 14, 1942.
Judgment of the Court of Special Sessions of the City of New York, Borough of Brooklyn [County of Kings], convicting the defendant of petit larceny, for violation of section 36-a, Lien Law (Cons. Laws, ch. 33; L. 1930, ch. 859, § 18), reversed on the law, the information dismissed, and the defendant discharged. The People failed to prove the defendant's guilt beyond a reasonable doubt. Section 36-a, Lien Law, provides that the funds received by a contractor for improvement of real property are trust funds for the payment of materialmen, etc., and that application thereof to other purposes is larceny. Section 36-d, subdivision 5, requires a contractor to serve a verified statement of account within ten days after demand by a materialman. Subdivision 6 provides that the failure to serve such statement shall be presumptive evidence that the contractor has applied trust funds for purposes other than those provided by law. The evidence establishes that the complainant, a materialman, demanded a verified statement of the appellant, a contractor; that none was furnished within ten days; but that a verified statement was furnished some months thereafter and shortly prior to the trial of this information. In our opinion the presumption of illegal diversion of trust funds, which is described in section 36-d, subdivision 6, arises when no statement is served; and the presumption is not operative in a case in which the statement is actually served. We do not pass upon the question of whether or not the People's case, which concededly was insufficient, was made sufficient with evidence given by the defendant while testifying in his own behalf.
To hold that the statement referred to in section 36-d, subdivisions 5 and 6, of the Lien Law may be served at any time before a trial is to rob the provision of its beneficent purposes. Though a defendant's guilt may not have been proved by the People's case, it may be found on proof submitted by defendant. ( Sandals v. United States, 213 Fed. 569; Collins v. United States, 219 Fed. 670; Edwards v. United States, 7 F. [2d] 357.) Here the triers of the fact evidently did not credit defendant's testimony that he had paid out more than he received. Therefore, the presumption that he has made application of the trust funds for purposes other than those specified in the Lien Law survives.