Opinion
Argued April 19, 1949
Decided June 2, 1949
Appeal from the Supreme Court, Appellate Division, First Department, HOFMANN, P.J., PERLMAN and FLOOD, JJ.
Louis E. Yavner for Meyer Greenwald, appellant.
I. Maurice Wormser and Bernard I. Strauss for Marvin Fleet and Stephen J. Strauss, appellants. George J. Elkins for Jacob Schaffer, appellant.
I. Maurice Wormser, Hyman Barshay and Samuel Bader for David Kaskell, appellant. Louis E. Yavner for John Hill, appellant. Victor W. Mills for Gladys Siegel, appellant. Frank S. Hogan, District Attorney ( Whitman Knapp, Harold Roland Shapiro, Peyton H. Moss and Edgar J. Nathan, 3d, of counsel), for respondent.
Taking advantage of New York City's acute postwar housing shortage, each of these defendants exacted from apartment seekers automobiles or large cash payments, amounting in some instances to thousands of dollars, on the strength of representations that such contributions would facilitate and influence the securing of accommodations. Convicted of violating section 965 of the Penal Law, entitled "Excessive charges in connection with rental agreements", defendants challenge their convictions upon constitutional grounds.
Section 965 makes it a misdemeanor for anyone either (1) to request, collect or accept from another "any donation, gratuity, bonus, emolument, gift, payment or thing of value, in addition to lawful charges," upon the representation or understanding that "compliance * * * will facilitate, influence or procure an advantage over others in entering into an agreement" for rental of real property or (2) to refuse to enter into any such agreement "unless he receives * * * any such donation, gratuity, bonus * * * gift, payment or thing of value".
The provision is — contrary to defendants' contention — not a rent control statute and does not purport, singly or in conjunction with other statutes or regulations, to prescribe or limit the amount of rent that may be charged. That is the province of other legislation, federal, state and local. (See, e.g., Emergency Commercial Rent Control Law, L. 1945, ch. 3; McKinney's Unconsol. Laws, § 8521 et seq.; Emergency Business Rent Control Law, L. 1945, ch. 314; McKinney's Unconsol. Laws, § 8551 et seq.; Federal Housing and Rent Control Acts of 1947, 1948, 1949, U.S. Code, tit. 50, Appendix, § 1881 et seq.; N YC. Adm. Code, § U41-4.0, subd. d.) And, since that is so, it completely disposes of the claims that there was either an incorporation of any other laws by reference (N.Y. Const., art. III, § 16) or an unlawful delegation of legislative powers (N Y Const., art. III, § 1).
Nor is there basis for defendants' further plaint that the statute is vague and uncertain and lacks an ascertainable standard. In our view, section 965 meets the constitutional tests by giving reasonable notice of "what must be done and what must be avoided" and of how the charge may be defended. (See People v. Grogan, 260 N.Y. 138, 145; see, also, People v. Mancuso, 255 N.Y. 463, 469; Gorin v. United States, 312 U.S. 19, 26; Cline v. Frink Dairy Co., 274 U.S. 445, 459-460; Connally v. General Constr. Co., 269 U.S. 385, 391-392; United States v. Cohen Grocery Co., 255 U.S. 81, 92; International Harvester Co. v. Kentucky, 234 U.S. 216, 223.)
Designed to prevent the exploitation of those in desperate need of rental accommodations, the statute prohibits and condemns the acceptance of donations, gratuities, bonuses or gifts in connection with arranging leases. The phrase, "in addition to lawful charges," defines no essential element of the crime, simply serving to limit the immediately preceding words "payment or thing of value," and to assimilate their meaning to that of the operative and controlling words — donation, gratuity, bonus or gift. In short, no extra premiums are tolerated, however ingeniously cloaked or disguised as payments; the fees collected must represent the charges for actual services.
In that respect, several defendants, being licensed real estate brokers or salesmen, make the separate contention that, since there is no limit to the amount of brokerage commissions which they may lawfully charge, they are immune from prosecution under section 965. We find their argument unpersuasive. The Real Property Law, in permitting a broker to collect commissions for legitimate services (Real Property Law, §§ 442-d, 440 et seq.), gives him no general license to exact tribute from a prospective tenant on the strength of a representation that such a payment will yield to the latter an advantage over others in securing a lease. The question presented upon the trial of a broker defendant is not different in any essential from that involved in the case of an unlicensed person. In each, the issue is, was the payment in fact exacted as a special premium of the type condemned, or was it received in payment of some legitimate service? As to two of the defendants here involved that question was answered in the affirmative by reason of their formal admissions — in one instance, by a plea of guilty, in the other, by a refusal to plead following disallowance of a demurrer (Code Crim. Pro., § 330). As to the remaining defendants, the affirmative answer implicit in the trial court's finding of guilt is supported by overwhelming proof.
While the fact issue raised may in the abstract seem difficult, it is of a type with which the criminal courts are entirely familiar, of a sort with which they are constantly called upon to deal. A similar issue is met in the prosecution of a labor racketeer for extortion, when the defendant concedes receipt of the alleged extortionate payment but claims that it was accepted in return for some legitimate service to labor or management. (Cf., e.g., People v. Parkinson, 297 N.Y. 749; People v. Fay, 296 N.Y. 510.) In the present prosecutions, the People more than met the burden of establishing, beyond a reasonable doubt, that the defendants, licensed or not, exacted large sums, not in return for legitimate services, but in manifest violation of the statute.
Defendants' remaining points we consider to be lacking in merit.
In each case, the judgment should be affirmed.
LOUGHRAN, Ch. J., LEWIS, CONWAY, DESMOND, DYE and BROMLEY, JJ., concur.
Judgments affirmed.