APPEAL by the defendant, John E. Schultz, from a judgment of the Court of Special Sessions of the city of New York, rendered against the defendant on the 12th day of May, 1911, convicting him of the crime of usury in violating section 314 of the Banking Law.
Ernest P. Seelman and Gates Hamburger, for the appellant.
Leroy W. Ross, Assistant District Attorney [John F. Clarke, District Attorney, with him on the brief], for the respondents.
Walter S. Heilborn, filing brief, by permission, for Russell Sage Foundation.
The defendant was tried on an information charging him in substance with having violated section 314 of the Banking Law (Consol. Laws, chap. 2 [[Laws of 1909, chap. 10], § 314), in that on the 26th day of October, 1910, at the borough of Brooklyn, county of Kings, he loaned and procured to be loaned to one Charles Platt the sum of twenty-five dollars, seeking to obtain and obtaining for the said loan more than six per cent interest. No evidence was offered on behalf of the defendant. The uncontradicted evidence adduced on behalf of the People established the facts that in October, 1910, one Charles Platt, answering a newspaper advertisement, applied to the offices of the State Loan and Realty Association at 59 Court street, borough of Brooklyn, Kings county, for a loan of twenty-five dollars; that he found the defendant at those offices and stated the purpose of his visit to him; that the defendant informed him that such a loan would cost six dollars and eighty-five cents per month for six months; that after Platt had signed certain papers, including an agreement to pay sixteen dollars and ten cents for services, brokerage, etc., and a six months' note for twenty-five dollars at six per cent, payable to the order of one C. H. Fuller, the defendant said, 'I will make this loan,' and procured twenty-five dollars from a drawer in the outer office and gave that money to Platt. It also appears that in the following month Platt's wife, on his behalf, paid the defendant six dollars and eighty-five cents and received a receipt from the defendant reading as follows:
'Received of Charles T. Platt, $6.85/100, on Account
'J. E. S.'
When the defendant was arrested memoranda were found in his possession showing the time agreed upon for the repayment of the loan. The learned counsel for the appellant asks for a reversal on the ground that no security was taken for the loan; that the evidence does not connect the defendant with the alleged crime, and that no evidence was adduced showing that the defendant was not one of the corporations authorized by section 314 of the Banking Law to exact more than six per cent interest on loans of less than $200.
Section 314 of the Banking Law reads as follows: '§ 314. Prohibitions. In any such county no person or corporation, other than corporations organized pursuant to this article, shall directly or indirectly charge or receive any interest, discount or consideration greater than the legal rate of interest upon the loan, use or forbearance of money, goods or things in action less than two hundred dollars in amount or value, or upon the loan, use or sale of personal credit in any wise where there is taken for such loan, use or sale of personal credit any security upon any household furniture, apparatus or appliances, sewing machine, plate or silver-ware in actual use, tools or implements of trade, wearing apparel or jewelry. The foregoing prohibition shall apply to any person who, as security for any such loan, use or forbearance of money, or for any such loan, use or sale of personal credit as aforesaid, makes a pretended purchase of property from any person, and permits the owner or pledgor to retain the possession thereof, or who, by any device or pretense of charging for his services or otherwise, seeks to obtain a larger compensation in any case hereinbefore provided for. Any person, and the several officers of any corporation, who shall violate the foregoing prohibition, shall be guilty of a misdemeanor, and upon proof of such fact the debt shall be discharged and the security shall be void. But this section shall not apply to licensed pawnbrokers making loans upon the actual and permanent deposit of personal property as security; nor shall this section affect in any way the validity or legality of any loan of money or credit exceeding two hundred dollars in amount.'
The language of the statute indicates clearly that where the loan is a loan of money of less value than $200 for more than the legal rate of interest, the giving of security is not a necessary element of the crime. On the other hand, where the loan is of personal credit, the statute specifically states that security must be given in order to constitute the misdemeanor The language of former section 378 of the Penal Code (as amd. by Laws of 1895, chap, 72) was substantially identical in this respect with the language of ...