author: Titone, J.

text:
    The People of the State of New York, Respondent, v Billy Chin, Appellant. The People of the State of New York, Respondent, v Peter Chan, Appellant.
    Argued January 6, 1986;
    decided February 11, 1986

      POINTS OF COUNSEL

      David Samel and William F. Hellerstein for appellant in the first above-entitled action.
    The court erred in permitting Robert Hu to testify knowing he would assert his privilege against self-incrimination on cross-examination concerning material matters, and in refusing to strike Hu’s testimony once the privilege was so claimed, thereby denying appellant his rights to confrontation and to due process. (Davis v Alaska, 415 US 308; Chambers v Mississippi, 410 US 284; Fountain v United States, 384 US 624, cert denied sub nom. Marshall v United States, 390 US 1005; United States v Cardillo, 316 F2d 606, 375 US 822; People v Schneider, 44 AD2d 845, 36 NY2d 708; People v Baker, 39 NY2d 923; People v Farruggia, 77 AD2d 447; People v Acomb, 87 AD2d 1; People v Gissendanner, 48 NY2d 543.)

      James B. McCarthy for appellant in the second above-entitied action. I.
    The court erred in not granting a mistrial when it was established at trial that the prosecution had not disclosed exculpatory Brady material which tended to disprove the prosecution’s case and impeach its key witness, thus denying appellant his rights to confrontation and due process. (People v Bottom, 76 Misc 2d 525; People v Smith, 50 AD2d 670; People v Mackey, 52 AD2d 662; United States v Giglio, 405 US 150; People v Andre W., 44 NY2d 179; United States v Agurs, 427 US 97; People v Bennett, 75 Misc 2d 1040; People v Fein, 24 AD2d 32; People v Kitt, 86 AD2d 465.) II. The court erred in charging the jury that if it found any of defendants had become a partner in a criminal enterprise then that defendant became liable for the acts and statements of every other partner made during and in furtherance of the enterprise when defendants were not charged with conspiracy. (People v Hentschel, 54 NY2d 740.)

      Robert M. Morgenthau, District Attorney (Vija Kemanis and Amyjane Rettew of counsel), for respondent in the first and second above-entitled actions.
    I. Robert Hu’s assertion of his privilege against self-incrimination did not deprive defendants of their confrontation right because they cross-examined Hu thoroughly about the entire subject matter of his direct testimony. (People v Adams, 53 NY2d 241; United States v Calvente, 722 F2d 1019; United States v Lang, 589 F2d 92; People v Schneider, 44 AD2d 845, 36 NY2d 708; People v Baker, 48 AD2d 662, 39 NY2d 923; United States v Cardillo, 316 F2d 606, 375 US 822; Fountain v United States, 384 F2d 624, cert denied sub nom. Marshall v United States, 390 US 1005; Davis v Alaska, 415 US 308; People v Acomb, 87 AD2d 1; People v Farruggia, 77 AD2d 447.) II. Billy Chin’s admission that he shot at Hu while Peter Chan pointed at Hu and yelled "shoot him” did not exculpate Chan, and the People had no duty to disclose the statement prior to trial. (United States v Agurs, 427 US 97; People v Bornholdt, 33 NY2d 75, 416 US 905.) III. Chan has not preserved his challenge to the court’s charge that, once a defendant is found to be a partner in the criminal enterprise, he is liable for the acts of other partners; in any event, the court’s charge was correct. (People v Hentschel, 80 AD2d 943, 54 NY2d 740.)
   OPINION OF THE COURT

Titone, J.

Defendants Peter Chan and Billy Chin appeal from orders of the Appellate Division, First Department, which affirmed separate judgments of the Supreme Court, New York County, convicting them of attempted murder in the second degree, upon a jury verdict, and imposing sentence. The pivotal issue is whether they were denied their constitutional right to confront an adverse witness, the victim of the crime, when the witness invoked his privilege against self-incriminatian on cross-examination. We conclude that there was no infringement of the right to confrontation, and, finding no merit to any of the other contentions raised, affirm the orders of the Appellate Division.

I

On December 23, 1980, an attempt was made to shoot and kill Robert Hu. The shooting was part of an ongoing battle between rival street gangs for control of the extortion and gambling protection rackets in the Chinatown section of Manhattan. Hu was the leader of the Ghost Shadows gang which some two years earlier had expelled Nickie Louie from its ranks. Louie, a codefendant acquitted at trial, formed a new gang, the White Tigers, recruiting defendants Chan and Chin and others, with the aim of compelling Hu to relinquish the "territory” to them.

Hu and Louie met at a coffee shop at about 6:45 p.m. Police officers were present conducting surveillance. In essence, Louie demanded that Hu turn over control of the Mott Street rackets to his gang. Hu refused and left the restaurant, police officers following behind.

Outside, an officer observed Chin crouched behind a parked van, holding a gun. Chin turned toward a detective and pointed the gun at him. Officers directed Chin to drop the weapon, but Chin stared at them and fled south on Mott Street. As an officer gave chase, two shots rang out.

In the meantime, two other officers exited the coffee shop, and were directed by a passerby in the opposite direction, north towards Canal Street. Both ran as far as Canal Street, and, finding nothing of interest, returned down Mott Street. When they reached the van parked near the coffee shop, Hu yelled "Under the van. Under the van.” An officer recovered a gun from underneath the van’s left rear tire. By this time Chin, who had been shot in the hand, had been apprehended.

Hu had an extensive criminal record and had an extortion charge pending against him in Maryland. He was detained in jail as a material witness during trial. All parties were advised by Hu’s attorney that Hu would assert his privilege against self-incrimination on all matters for which he did not receive complete immunity. The People stated that their direct examination would be limited to those questions asked in the Grand Jury for which Hu had already received immunity (CPL 190.40). Defense counsel protested that their cross-examination would be impermissibly curtailed and sought to preclude Hu from taking the stand. That application was denied.

On direct examination, Hu was questioned about the events which occurred subsequent to his departure from the coffee shop. As to each question, he asserted his privilege against self-incrimination. The prosecutor then requested that immunity be conferred, the trial court did so, and Hu responded.

Hu testified that while he was standing in front of the coffee shop, he saw Chan and Chin approach him from across the street. Chan said, "Don’t go. I have something to talk to you [sic]. ” When Chan and Chin tried to fire weapons, Hu ran to an unmarked police car and pounded on the hood. A voice, which Hu thought was Nickie Louie’s, called out "shoot, shoot, shoot.” Hu threw himself to the ground, hearing a total of three shots. Chan dropped his weapon and kicked it under the van.

At the outset of cross-examination, Hu was asked if he was a member of the Ghost Shadows on December 23, 1980, and if he possessed a gun within three months of that date. Hu refused to answer, and the prosecutor declined to request that immunity be conferred by the court, instead offering a stipulation to the effect that the questions would be answered in the affirmative. The stipulation was declined. In addition, the prosecutor urged that any cross-examination concerning the history of Chinese youth gangs would be collateral, a contention accepted by the trial court.

Defendants were able to cross-examine Hu about all matters covered in his direct examination. More specifically, they were able to inquire about Hu’s acquaintance with the defendants, his knowledge of weapons, whether he carried a weapon on the day of the shooting, his observations during the shooting, including the fact that he never saw who fired the shots, the circumstances of his arrest after the shooting, and his inconsistent statements to the police and to the Grand Jury.

During and after cross-examination, defense counsel sought to strike Hu’s direct testimony, claiming that certain areas of legitimate inquiry were foreclosed. These areas included Hu’s fear of prosecution for the murder of a rival gang member who was present at the scene of the shooting; Hu’s membership in a rival gang; the reasons for Hu’s presence on Mott Street on the evening of the shooting; the conversation at the coffee shop; Hu’s means of earning a living; whether the People had made any threats or promises to induce Hu to testify; and whether Hu had been involved in the shooting of defendant Chin six months after the crime.

The prosecutor responded that Hu’s testimony on these points would be "cumulative” and "collateral” as they were not the subject of his direct examinations. At the completion of cross-examination, the prosecutor offered a series of stipulations, including those providing that Hu was "a member and leader of the Ghost Shadows,” that he "earns his living through both legal and illegal means,” and that "he has an interest in seeing that these defendants are convicted.” All the tendered stipulations were rejected by defense counsel, and the motions to strike Hu’s testimony were denied.

Defendants contend that they were unable to effectively cross-examine Hu, and that their motion to strike his direct testimony should have been granted.

II

It is, of course, basic that a defendant in a criminal cause has a constitutional right to confront witnesses against him through cross-examination (US Const 6th Amend; NY Const, art I, § 6; Davis v Alaska, 415 US 308, 315-316; People v Gissendanner, 48 NY2d 543, 548; see also, Civil Rights Law § 12), a process Wigmore describes as "beyond any doubt the greatest legal engine ever invented for the discovery of truth” (5 Wigmore, Evidence § 1367, at 32 [Chadbourn rev 1974]). As the Supreme Court has observed, "Cross-examination is the principal means by which the believability of a witness and the truth of his testimony are tested” (Davis v Alaska, supra, at p 316).

Although a cross-examiner may delve deep in order to attack credibility and present an alternate view of the facts, such inquiry is not open-ended. A witness may, if appropriate, invoke the constitutional shield of self-incrimination (Alford v United States, 282 US 687, 694; People v Farruggia, 77 AD2d 447, 452). Refusal to answer the cross-examiner’s questions may so distort the fact-finding process that some or all of the direct testimony must be struck, lest the defendant be deprived of a fair trial (see, People v Schneider, 36 NY2d 708, revg on dissent of Justice Hopkins at 44 AD2d 845; People v Acomb, 87 AD2d 1; People v Farruggia, supra).

Decisional law generally distinguishes between invoking the privilege on matters that are collateral to the direct examination, which does not require the striking of direct testimony (see, e.g., People v Allen, 50 NY2d 898, affg 67 AD2d 558; People v Codrington, 109 AD2d 891; People v Jones, 99 AD2d 471, 472, overruled on another issue in People v Magazine, 106 AD2d 473; Dunbar v Harris, 612 F2d 690), and invoking the privilege on matters directly related to the direct examination, which entitles the defendant to have the direct testimony stricken (see, e.g., People v Schneider, 36 NY2d 708, supra; People v Acomb, supra; People v Farruggia, 77 AD2d 447, supra; United States v Newman, 490 F2d 139). The distinction between matters which are "collateral” and those which are "direct” is not precise or easy to draw (United States v Seifert, 648 F2d 557, 561), and these terms are simply guidelines. In each case, "the ultimate question must be whether the defendant’s inability to test the accuracy of the witness’ direct examination has been such as to create a substantial risk of prejudice” (McCormick, Evidence § 140, at 347 [3d ed]; see generally, Ann., 55 ALR Fed 742).

If the cross-examiner seeks to explore more than mere general credibility, as, for example, to establish bias or interest, the subject of inquiry is not collateral (see, Dunbar v Harris, 612 F2d 690, 693, supra; United States v Garrett, 542 F2d 23, 26; Jackson v State, 695 P2d 227, 230 [Alaska App]), and it must be ascertained whether the defendant is still able to test the truth of the witness’s direct testimony (see, Fountain v United States, 384 F2d 624, 628, cert denied sub nom. Marshall v United States, 390 US 1005; Coil v United States, 343 F2d 573, cert denied 382 US 821), or whether the "answers solicited might have established untruthfulness with respect to the specific events of the crime charged” (United States v Cardillo, 316 F2d 606, 613, cert denied 375 US 822). If bias or interest has been fully explored through other means (United States v Pelusio, 725 F2d 161, 169; United States v Calvente, 722 F2d 1019, 1024-1025, cert denied — US —, 105 S Ct 2030, sub nom. Martinez-Torres v United States, — US —, 106 S Ct 170; United States v Brown, 634 F2d 819, 825-826), or the precluded area involved cumulative matter already presented (see, United States v Phillips, 664 F2d 971, 1027-1028, cert denied sub nom. Platshorn v United States, 459 US 906, sub nom. Myers v United States, 457 US 1136; United States v Diecidue, 603 F2d 535, 552, cert denied sub nom. Antone v United States, 445 US 946), there generally has been no infringement of the right of confrontation.

In the end, as the United States Court of Appeals for the Fifth Circuit put it, "[w]hether the exclusion of particular impeaching evidence creates a substantial danger of prejudice therefore depends, at least in part, on the defendant’s ability to make the same impeachment argument in the absence of excluded evidence” (United States v Brown, 634 F2d 819, 825-826, supra). This, of course, can only be gouged by reference to the facts of a particular case, so it must be "recognize[d] that '[a] trial court has wide discretion to determine whether a witness’s testimony must be stricken because cross-examinatian was restricted’ ” (United States v Seifert, 648 F2d 557, 562, supra, quoting United States v Star, 470 F2d 1214, 1217-1218), and "only in a case of abuse of such discretion resulting in obvious prejudice should an appellate court intervene” (United States v Brierly, 501 F2d 1024, 1027, cert denied 419 US 1052; see, McCormick, Evidence § 140, at 347, n 17 [3d ed]).

m

Defendants point to five areas of cross-examination which they claim were essential to their right of confrontation: (1) the presence of another gang member at the scene, known as Timmy Tam, and Hu’s possible involvement in Tam’s murder two weeks later; (2) any promises or threats made by law enforcement authorities to secure Hu’s testimony; (3) Hu’s participation in conversations at the coffee shop; (4) Hu’s leadership of the Ghost Shadows gang; and (5) Hu’s possible involvement in the shooting of defendant Chin six months after the crime. None of these subjects were covered on direct examination, and examination of the challenged subject areas establishes that nothing relevant to Hu’s bias, credibility, or motive, was kept from the jury.

First, defendants had ample opportunity to advance the theory that Timmy Tam committed the crime, and that Hu later killed Tam in retaliation. Defense counsel asked Hu whether Tam had shot at him on December 23, 1980. Hu was granted immunity and answered "no.” Defense counsel then introduced into evidence a letter signed by the prosecutor stating that Hu was a suspect in the murder of Timmy Tam. Further cross-examination would have been cumulative (United States v Brown, 634 F2d 819, 825-826, supra; United States v Diecidue, 603 F2d 535, 552, supra; United States v Gould, 536 F2d 216, 222; United States v Marcus, 401 F2d 563, 566, cert denied 393 US 1023).

By the same token, Hu’s refusal to answer all of the questions concerning open cases did not effectively deprive defendants of their right of confrontation. The point of these questions was not to establish Hu’s commission of the outstanding offenses, but rather to show that he was charged or suspected of having committed them and thus had a motive to curry favor with a prosecuting authority. In fact, most of the questions related to purported "threats” and "promises” made by law enforcement authorities.

The area was sufficiently probed. Hu answered one of the defendants’ questions on the subject, confirming that he had no agreements with the People, other than the immunity that was granted him in court for his testimony. Moreover, the jury was aware that Hu was a suspect in the murder of Timmy Tam and that the People had no understanding with Hu regarding the disposition of that case. The only other open case against Hu was an extortion charge pending in Maryland. Since interest or bias is not collateral, Hu’s statements concerning the crime would not have been binding on the defendants (People v Webster, 139 NY 73; Richardson, Evidence § 491 [10th ed]). Defendants, therefore, could have called witnesses to testify to the existence of the charge. They also could have accepted the People’s stipulation that Hu was involved in that crime, which would have obviated the need to call such witnesses. Defendants did neither.

Thus, unlike Davis v Alaska (415 US 308, supra), in which a prosecutor invoked a State policy to prevent cross-examination of a crucial witness about the fact that he was on probation pursuant to a juvenile adjudication, the People never sought to withhold any relevant impeachment material from the jury. In any event, cross-examination on the issue would have been cumulative, and, in the circumstances of this case, its omission was harmless.

Nor did Hu’s invocation of the privilege against self-incrimination concerning the conversation in the coffee shop deprive defendants of their right to explore material facts. Hu’s participation was fully described by four other witnesses, and even defense counsel conceded at one point that if Hu were to testify on the subject, he would most likely admit that he was having a discussion about "dividing up Mott Street.” Challenging Hu with inconsistencies in the conversations would not have advanced the farfetched claim that no conversation occurred and that the entire incident had been fabricated to cover up police misconduct. Hu’s testimony confirming that the conversation took place would have simply rendered such a theory totally implausible.

Similarly, Hu’s refusal to answer questions about his role as leader of the Ghost Shadows and the gang rivalry did not preclude defendants from establishing Hu’s possible motive to frame defendants. Hu’s violent conduct was placed before the jury by evidence showing that under Hu’s leadership the Ghost Shadows had tried to shoot Nickie Louie and others, including defendant Chan. The struggle between Hu and the defendants for control of the extortion rackets in Chinatown was also undeniably established by other evidence. All facts relevant to Hu’s credibility and motive were thus squarely placed before the jury. Merely because some of the evidence was adduced through sources other than cross-examination does not mean that the right of confrontation has been infringed (United States v Pelusio, 725 F2d 161, 169; supra; United States v Calvente, 722 F2d 1019, 1024-1025, supra; United States v Coven, 662 F2d 162, 171; cf. People v Jarvis, 111 AD2d 262).

Finally, defendants now argue, for the first time, that they should have been allowed to question Hu about his supposed involvement in the shooting of defendant Chin in June 1981. Two other men had been arrested for that shooting, and Hu had not been a suspect in that crime. This proposed line of questioning would have added nothing to Hu’s bias and motive to falsify already spread upon the record.

To the extent that defendants would have made Hu their own witness by eliciting new facts and theories, we would note that the prosecutor’s discretion to confer immunity on witnesses called by defendants is quite broad (CPL 50.30; People v Owens, 63 NY2d 824; People v Adams, 53 NY2d 241, 247; People v Shapiro, 50 NY2d 747; People v Sapia, 41 NY2d 160, cert denied 434 US 823). That discretion will not be deemed to have been abused unless, for example, the prosecutor builds his case with immunized witnesses but denies the defendant a similar opportunity (see, e.g., People v Adams, supra, at p 247). Plainly, the defendant’s choice of a victim who is also a criminal does not place the People on the horns of an unacceptable dilemma — either grant the victim absolute immunity for numerous crimes so that the defendants may question him about them or absolutely preclude the victim’s testimony about the defendant’s crime altogether (United States v Pelusio, 725 F2d 161, 169, supra; United States v Brown, 634 F2d 819, 826, supra).

In sum, defendants fully cross-examined Hu on matters covered in direct testimony, and all collateral facts relevant to Hu’s bias, credibility, and motive were established through the cross-examination of Hu and through the testimony of other witnesses. Hu had a valid basis for asserting his privilege against self-incrimination and the People had an equally valid basis for declining to confer immunity upon him since under New York law this would have granted Hu full dispensation from criminal liability for any acts discussed in his testimony (CPL 50.20; People v Sobotker, 61 NY2d 44, 47; People v Rappaport, 47 NY2d 308, 313, cert denied 444 US 964). In such circumstances, the trial court did not abuse its discretion in declining to strike Hu’s direct testimony (see, People v Stanard, 42 NY2d 74, 85, cert denied 434 US 986; McCormick, Evidence § 140, at 347, n 17 [3d ed]).

IV

Two other issues tendered by defendant Chan warrant but brief discussion.

During a midtrial hearing, a witness testified that Chin had fired a gun at Hu. According to the witness, Chin had said that a person named "Chris” had handed him the gun after "Chris” attempted to fire it, while Peter Chan was pointing at Hu and yelling, "shoot him, shoot him.” Chan argues that this evidence somehow exculpated him and that the People should have disclosed it prior to trial.

We fail to perceive how this evidence is exculpatory. The presence of a person named Chris did not exclude the likelihood that Chan was also one of the gunmen, particularly in a case like this involving a murder plot by gang members. Even if the People had been aware of the evidence prior to that testimony, and they were not, constitutional error occurs only if the evidence which was not disclosed was material in the sense that "there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different” (United States v Bagley, 473 US —, 105 S Ct 3375, 3384), plainly not the case here.

Chan’s remaining contention, that the trial court’s jury instructions were improper because it injected a conspiracy theory into the case, was not preserved for appellate review (CPL 470.05 [2]; People v Karabinas, 63 NY2d 871; People v Hoke, 62 NY2d 1022). Chan only objected at trial on the ground the jury should also be instructed that it "must find that the others for whose act * * * a defendant is also liable, must be found to have beyond a reasonable doubt, have committed certain acts”, which was properly denied (see, People v Berkowitz, 50 NY2d 333, 342-343; People v Schwimmer, 47 NY2d 1004, affg 66 AD2d 91). Failure to give the instruction is not asserted as error on this appeal; rather, he presently asserts, that he should not be found guilty merely for agreeing with others or planning the attempted murder.

Accordingly, the orders of the Appellate Division should be affirmed.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye and Alexander concur; Judge Hancock, Jr., taking no part.

In each case: Order affirmed.

      . It is not disputed that Hu had a legitimate basis to assert the privilege against self-incrimination.

      . To the extent that People v Kelly (48 AD2d 802) and People v Rivera (106 Mise 2d 110) may be read as requiring the striking of direct testimony whenever a witness invokes the privilege against self-incrimination on a completely collateral issue, they are disapproved.

      . As the People concede, stipulations cannot substitute for confrontation, because confrontation envisions "a personal examination and cross-examination of the witness in which the accused has an opportunity, not only of testing the recollection and sifting the conscience of the witness, but of compelling him to stand face to face with the jury in order that they may look at him, and judge by his demeanor upon the stand and the manner in which he gives his testimony whether he is worthy of belief’ (Mattox v United States, 156 US 237, 242-243). The People urge, however, that the stipulations were not proposed as a substitute for cross-examination, but only as a substitute for granting Hu immunity so that defendants could cross-examine him about material side issues. Although the distinction may be valid in the abstract, inasmuch as the record shows that there was no preclusion with respect to the challenged subject areas, without the proposed stipulations, we do not pass on the question.

      . The Fifth Amendment to the United States Constitution simply precludes the People from using statements obtained from a defendant through legal compulsion (Kastigar v United States, 406 US 441), and a prosecutor might be more inclined to request such limited use immunity in circumstances such as those before us. Our immunity statutes (CPL 190.40, 50.20), however, grant full transactional immunity for any topic discussed by the witness within the scope of the proceeding (see, Matter of Brockway v Monroe, 59 NY2d 179, 189; People v Perri, 53 NY2d 957, affg 72 AD2d 106; People v McFarlan, 42 NY2d 896, revg 52 AD2d 112, on opn at 89 Misc 2d 905), and prosecutors are, therefore, understandably reluctant to request that such immunity be conferred.


source: Caselaw Access Project

author: Simons, J.

license: Public Domain

text:
    Consolidated Rail Corporation, Appellant-Respondent, v MASP Equipment Corp., Respondent-Appellant.
    Argued January 8, 1986;
    decided February 11, 1986

      POINTS OF COUNSEL

      Timothy C. Quinn, Jr., for appellant-respondent. I. Case law supports an award of punitive damages.

      (Santos v Security & Law Enforcement Employees, 80 AD2d 554; O’Connor v Lempicky, 81 AD2d 860; Taylor v Haddad Corp., 118 Misc 2d 253; Bonham v Coe, 249 App Div 428, 276 NY 540; Great Riv. Realty Corp. v Rector, Churchwardens & Vestrymen, 284 App Div 977, 308 NY 973; Kaminsky v Kahn, 23 AD2d 231; Ansonia Assoc. v Ansonia Residents’ Assn., 78 AD2d 211; April Prods. v G. Schirmer, Inc., 284 App Div 639; Toomey v Farley, 2 NY2d 71.) II. The facts in the record support punitive damages. (Kent v City of Buffalo, 36 AD2d 85.)

      Alan Scribner for respondent-appellant.
    I. The "driveway” easement originally acquired by grant was abandoned by the railroad and replaced by the "dog-leg” easement. (Snell v Levitt, 110 NY 595; Gerbig v Zumpano, 7 NY2d 327; Kelly v Smith, 58 Misc 2d 883; Wen Kroy Realty Co. v Public Natl. Bank & Trust Co., 260 NY 84; Matter of Enright v Adslundh Tree Expert Co., 271 App Div 847; Ramsay v Miller, 202 NY 72.) II. Punitive damages are inapplicable in this case. (Walker v Sheldon, 10 NY2d 401; National Apparel Adjustment Council v Dun & Bradstreet, 42 AD2d 58; Toomey v Farley, 2 NY2d 71; I. H. P. Corp. v 210 Cent. Park S. Corp., 16 AD2d 461; Underwriters’ Labs. v Smith, 41 Misc 2d 756; Nardelli v Stamberg, 44 NY2d 500; Borkowski v Borkowski, 39 Misc 2d 982; Sure Fire Fuel Corp. v Martinez, 75 Misc 2d 714.)
   OPINION OF THE COURT

Simons, J.

Plaintiff brought this action against defendant MASP Equipment Corporation to recover possession of a 60-foot wide driveway easement acquired in 1969 by grant from Hunts Point Industrial Park, Inc. to plaintiff’s predecessor in interest, Penn Central Transportation Company. The easement crosses land leased by MASP and provides access from 149th Street to plaintiff’s land in the Hunts Point Industrial Park area of New York City.

Plaintiff recovered a judgment in Supreme Court, Bronx County, which granted it immediate possession of the driveway easement, a mandatory injunction directing MASP to remove all fencing, equipment and materials obstructing its use of the easement, and a permanent injunction enjoining MASP from encroaching on plaintiffs property. The court ordered that all obstructions be removed within 45 days of the entry of judgment, and ruled further that a penalty of $1,000 a day would be assessed for each day such obstructions remained on the easement after the end of this 45-day period. Upon plaintiffs subsequent motion "to clarify, define and fix amount of the judgment”, the trial court amended its judgment to substitute liquidated damages in the amount of $1,000 a day for the penalty.

The Appellate Division affirmed the amended judgment insofar as it confirmed plaintiffs right to unimpeded use and possession of the easement but it struck the portion of it directing the award of $1,000 in damages for each day after the expiration of the grace period. On appeal to this court, plaintiff contests the Appellate Division’s order eliminating the award of liquidated damages and MASP cross-appeals, seeking a judgment in its favor determining that plaintiff, and its predecessor in interest, Penn Central, abandoned their claim to the easement.

There should be an affirmance. The evidence does not support a finding of abandonment and the damage award, entered prospectively for violations of the grace period, cannot be upheld under a theory of either liquidated or punitive damages.

The facts found by the trial court, and affirmed by the Appellate Division, are as follows. Plaintiffs easement was created on October 23, 1969 by a formal, written document titled "Grant and Release of Easements”, signed and acknowledged by Penn Central, Hunts Point and others. By this agreement, Penn Central released to Hunts Point an existing "Serpentine” right of way along the shoreline in exchange for a new easement providing Penn Central access to its Oak Point Yard in the Industrial Park from East 149th Street. In a collateral agreement executed December 17, 1969, Hunts Point agreed to pave the entire length of the new easement. (900 Wool worth Redevelopment Corporation succeeded to the interests of Hunts Point in the servient property and MASP is its lessee.) Notwithstanding these agreements, however, the easterly end of the easement has never been opened and, in fact, has been used continuously by Hunts Point, and then MASP for storage of equipment, materials and junk. Consequently, Penn Central and its tenants have been forced to use a "dog-leg” path around the perimeter of MASP’s leasehold that crosses other property owned by Wool worth and the Coca Cola Company. The trial court found that plaintiff does not possess any legally enforceable right to the path and has been permitted to use it solely at the sufferance of the property owners.

Plaintiff acquired title to the easement from Penn Central’s trustees in bankruptcy in April 1976. At about the same time, Supreme Court decided a pending lawsuit involving Hunts Point, Penn Central and the Idaho Potato Packers Corporation (a lessee of Penn Central) and confirmed Penn Central’s right to unimpeded use of the easement. After acquiring title from Penn Central, plaintiff inspected the Oak Point Yard and discovered the continued obstruction of the easement by Hunts Point and the use of the "dog-leg” path as an alternative access route. In December 1979, prior to Woolworth’s acquisition of Hunts Point, MASP leased the servient property. In 1981 plaintiff demanded in writing that MASP vacate the easement and when MASP refused, it commenced this action.

We agree with the courts below that MASP failed to prove its affirmative defense that plaintiff and its predecessor in interest, Penn Central, had abandoned the easement. Although an easement created by grant may be lost by abandonment, an owner is under no obligation to make use of his property, and an abandonment does not result by nonuse alone (Gerbig v Zumpano, 7 NY2d 327, 331; Castle Assoc. v Schwartz, 63 AD2d 481, 487). It results only when there is a nonuse accompanied by an intention to abandon on the part of the owner (see, Snell v Levitt, 110 NY 595, 604 [quoting Washburn, Easements, at 661 ff (3d ed)]). As we noted almost 100 years ago: "Abandonment necessarily implies non-user, but non-user does not create abandonment no matter how long it continues. There must be found in the facts and circumstances connected with the non-user an intention on the part of the owner of the easement to give it up, but intention existing coupled with non-user will uphold a finding of abandonment.” (Welsh v Taylor, 134 NY 450, 457.)

A party relying upon another’s abandonment of an easement by grant must produce "clear and convincing proof of an intention to abandon it” (Hennessy v Murdock, 137 NY 317, 326; Castle Assoc. v Schwartz, supra, p 487). The acts relied upon must be unequivocal, and must clearly demonstrate the owner’s intention to permanently relinquish all rights to the easement (see, Gerbig v Zumpano, supra, p 331).

When judged by these rules, the facts found by the courts below support their conclusion that plaintiff did not intend to abandon its easement. The record establishes that after the grant Hunts Point and its successors repeatedly acknowledged plaintiff’s easement (indeed Hunts Point agreed to pave it for them) and in 1973 Penn Central joined in litigation with its lessee, Idaho Potato Packers Corporation which, among other relief, resulted in a judicial determination confirming Penn Central’s right to the easement. After the appurtenant property was sold to plaintiff, it asserted its rights and requested that MASP vacate the disputed easement. The dissenters at the Appellate Division suggested that bankrupt Penn Central’s agent, Nichols, had apparent authority to bind his employer and that he agreed to exchange the easement for the "dog-leg” easement. Those agreements were conditioned on court approval, however, and in related litigation in the United States District Court, the court found the acts of Nichols were void. Nor does plaintiff’s use of the "dog-leg” path evince an unequivocal intent to abandon the easement granted it. That right of way was valuable to plaintiff because it provided access to both plaintiff and its lessees, but an owner may hardly be presumed to have abandoned a legal access in favor of an alternative right of way existing only by sufferance.

The Appellate Division was also correct in reversing the award of liquidated damages assessed against MASP for failing to vacate the easement within the specified grace period. Liquidated damages constitute a sum which the parties to a contract contemplate should be paid to satisfy any loss or injury flowing from a breach of the contract (Truck Rent-A-Center v Puritan Farms 2nd, 41 NY2d 420, 423-424 [citing Wirth & Hamid Fair Booking v Wirth, 265 NY 214, 223]). They are appropriate, therefore, only in actions arising out of a contract where the amount fixed bears a reasonable proportion to the actual loss sustained through a breach (see, Truck Rent-A-Center v Puritan Farms 2nd, supra, pp 424-425). In the absence of any contractual provision between the parties, or any proof of actual damage sustained by plaintiff, the trial court should not have assessed liquidated damages against MASP.

Nor was the trial court’s award of punitive damages appropriate. As a procedural matter, a prayer for equitable relief may support an award for such damages if malice is alleged and proved (I. H. P. Corp. v 210 Cent. Park S. Corp., 12 NY2d 329, 331-333; Bonham v Coe, 249 App Div 428, 439, affd 276 NY 540; O’Connor v Lempicky, 81 AD2d 860), and the fact that MASP might have been subject to contempt proceedings for failure to obey the trial court’s order does not necessarily foreclose such relief (see, 9 Fuchsberg, Encyclopedia of NY Law, Damages §61, at 49). But even though there is no procedural bar to the award of punitive damages, they could only be awarded if MASP’s conduct was found to be malicious, vindictive, morally culpable, wanton or reckless (see, Reinah Dev. Corp. v Kaaterskill Hotel Corp., 59 NY2d 482, 487-488; I. H. P. Corp. v 210 Cent. Park S. Corp., 12 NY2d 329, 333-334, supra). Notwithstanding evidence in the record suggesting that the officers of MASP ignored prior court rulings not to obstruct plaintiff’s easement, there was no finding by the trial court that MASP’s conduct was malicious which would support its award.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

Chief Judge Wachtler and Judges Meyer, Kaye, Alexander and Titone concur; Judge Hancock, Jr., taking no part.

Order affirmed, without costs.

       Nor can the $1,000 a day damages be deemed to be a fine imposed for civil contempt. Civil contempt has as its aim the vindication of a private right of a party to litigation, and any penalty imposed on the contemnor is designed to compensate the injured private party for the loss of, or interference with, that right (Matter of McCormick v Axelrod, 59 NY2d 574, 582-583). Where, as here, it has not been shown that actual damage has been sustained as a result of such contempt, any fine imposed is limited to "the complainant’s costs and expenses, and two hundred and fifty dollars in addition thereto” (Judiciary Law § 773).


text:
    Nelly Szerdahelyi, Appellant, v Barbara L. Harris, as Executrix of Martin Harris, Deceased, et al., Respondents.
    Submitted January 10, 1986;
    decided February 13, 1986

      POINTS OF COUNSEL

      Murray Beckerman and Anita Fajans for appellant. I. A usurious loan may not be enforced by a lender who tenders back to the borrower the excess interest charged.

      (Bowery Sav. Bank v Nirenstein, 269 NY 259; Curtiss v Teller, 157 App Div 804, 217 NY 649; Yakutsk v Alfino, 43 AD2d 552; Crawford v Carlton, 73 AD2d 530; Hammelburger v Foursome Inn Corp., 54 NY2d 580; Matter of Delmar Box Co. [Aetna Ins. Co.], 309 NY 60.) II. The limited judicial exception to the usury laws for purchase-money mortgages and sales on credit is available only where the financing is provided by the actual seller and the excessive interest is taken by the seller as part of the consideration for the sale. (Bankers Trust Co. v Martin, 51 AD2d 411; Mandelino v Fribourg, 23 NY2d 145; Barone v Frie,
      99 AD2d 129; McAnsh v Blauner, 222 App Div 381, 248 NY 537; Syracuse Sav. & Loan Assn. v Hass, 134 Misc 82; Butts v Samuel, 5 AD2d 1008; Del Rubio v Duchesne, 284 App Div 89.)

      Jeanne Gail Harris for respondents.
    I. The underlying transaction constituted a purchase-money mortgage as a matter of law. (Syracuse Sav. & Loan Assn. v Hass, 134 Misc 82.) II. The note is not usurious because purchase-money mortgages are an exception to the laws governing usury. (Mandelino v Fribourg, 23 NY2d 145.) III. The purchase-money mortgage issue was correctly preserved for appellate review: the facts supporting this argument were carefully presented to Special Term. IV. Pursuant to General Obligations Law § 5-519, a lender who charges a rate of interest in excess of that authorized in Banking Law § 14-a who tenders back the excess over the permissible rate of interest, is thereby relieved of the penalties in General Obligations Law §§ 5-511 and 5-513. V. Summary judgment should have been entered dismissing the complaint and directing that judgment be entered on the counterclaims. (Dwan v Massarene, 199 App Div 872; Dodwell & Co. v Silverman, 234 App Div 362; Strasburger v Rosenheim, 234 App Div 544.)
   OPINION OF THE COURT

Simons, J.

The issue is whether a lender, by tendering a return of excess interest paid by a borrower on a usurious loan, may establish a right to recover the loan principal plus legal interest. Section 5-511 of the General Obligations Law provides otherwise but defendants claim that the 1965 amendment to section 5-519 of the General Obligations Law, not previously interpreted by this court, permits them to relieve themselves of the illegality and revive the void contract. We hold that it does not.

The question arises from these facts. Plaintiff and Patrick Laurent were tenants in an apartment building that was converted to cooperative ownership. Plaintiff elected to purchase their apartment but she was unable to secure a conventional mortgage without Laurent, who was then out of the country. Accordingly, she consulted Martin Harris who was attorney for Laurent and his brother. Harris tried to secure a mortgage but when he was unable to do so, he approached some of his clients in an effort to arrange a short-term loan for plaintiff that could be superseded by a mortgage upon Laurent’s return. Defendant Mensch was one of those Harris approached. She agreed to make the loan by liquidating all or part of her interest in a Dreyfus account that paid a return of approximately 18% per year, provided that the loan was fully secured and that the return was sufficient to compensate her for any loss arising from the liquidation of her account. Harris claimed that to ensure this he contacted the Banking Department and was told that a return of 21% was permissible. In fact, the maximum allowable interest rate at the time, as fixed by Banking Law § 14-a, was 16%.

On November 17, 1981, plaintiff purchased the cooperative apartment. The purchase was financed by her check for $14,161.33 and a check for $25,000 drawn on the Mensch account with Dreyfus Liquid Assets, Inc. payable to the order of attorney Harris, as her agent, and indorsed by him. Harris delivered the checks to the cooperative’s sponsor, and at the same time plaintiff executed and delivered to Harris her note for $25,000, bearing interest at the rate of 21%, and payable within one year. The note was guaranteed by Laurent’s brother. As additional security, plaintiff delivered to Harris a stock certificate, representing her interest in the cooperative corporation, and an irrevocable stock power.

On November 2, 1982, 15 days before the loan became due and after plaintiff had paid interest for 11 months, plaintiff’s attorneys sent a letter to Harris stating that the loan was usurious. Harris then sent plaintiff a check for the excess over the allowable interest on the loan. When the check was returned by her attorneys, Harris sent it to plaintiff once more, denominating it an unconditional tender made pursuant to law. She again rejected it and brought this action seeking judgment declaring that the loan was illegal because usurious, that the note and stock power were void and canceled, and directing that these documents and the stock certificate be returned to her along with all sums paid. Plaintiff moved for summary judgment and Special Term granted her the requested relief.

A divided Appellate Division reversed and remanded the action for trial. Justice Bloom, writing for himself and Justice Carro, construed General Obligations Law §5-519 as permitting a lender who tenders back the excess interest on a usurious loan to recover the principal and legal interest. Justice Asch concurred in that result but on different grounds. He viewed the transaction as one involving a purchase-money mortgage and thus exempt from the provisions of the usury laws. Justice Sandler, joined by Justice Lynch, dissented. Although he found the statutory language could be read as inconsistent with the expressed legislative intention of conforming the statute to prior judicial precedent, he believed that the amendment was not intended to overturn decisions holding that a tender back of excess interest does not entitle the lender to recover the underlying debt and unpaid lawful interest. In Justice Sandler’s view of the case the lender was entitled to only lawful interest previously paid. We find no inconsistency between amended section 5-519 of the General Obligations Law and prior case law and concur in the dissenters’ result. Accordingly, the order of the Appellate Division should be modified to grant plaintiff partial summary judgment declaring the note and stock power void and ordering these, as well as the stock certificate, returned to her, and directing defendants to pay plaintiff the excess over the lawful interest previously paid on the loan.

Preliminarily, Justice Asch’s characterization of the transaction as a purchase-money mortgage must be addressed. Purchase-money mortgages constitute a narrow exception to the restrictions on interest found in the usury laws and thus if this transaction involved a purchase-money mortgage plaintiff might well have been bound by her agreement (see, Mandelino v Fribourg, 23 NY2d 145, 151). Defendants did not raise this defense at Special Term. Apparently they never considered their transaction to be in the nature of a mortgage, and correctly so. A purchase-money mortgage is generally defined as "a mortgage executed at the time of purchase of the land and contemporaneously with the acquisition of the legal title, or afterward, but as part of the same transaction, to secure an unpaid balance of the purchase price” (38 NY Jur, Mortgages and Deeds of Trust, § 7, at 25 [citing Boies v Benham, 127 NY 620]). Ms. Mensch, the lender in this case, was neither a seller of real property nor did she take back a mortgage to secure money borrowed to acquire any such property.

Turning to the main issue, the consequences of the lender’s offer to tender back to plaintiff the amount of excess interest above the legally authorized rate she paid on this loan are governed by General Obligations Law § 5-519. It provides: "Every person who shall repay or return the money, goods or other things so taken, accepted or received, or the value thereof, shall be discharged from any other or further forfeiture or penalty which he may have incurred under sec tians 5-511 or 5-513, by taking or receiving the money, goods or other things so repaid, or returned, as aforesaid.” (Emphasis added.) The dispute centers on the italicized words. Defendants contend that nullification of the usurious contract is one of the penalties provided by section 5-511 and thus the language of section 5-519 permits recovery of the principal and lawful interest if the excess is tendered to the borrower. Plaintiif counters that defendants’ construction is inconsistent with judicial precedent and with the intention of the drafters of the legislation and, further, that such a construction permits easy avoidance of the proscriptions against excessive interest because any lender faced with a disavowal of a usurious loan could recover it, notwithstanding the illegality, merely by tendering the excess interest to the borrower.

Analysis starts with an understanding of General Obligations Law §§ 5-511 and 5-513. Section 5-511 deals with two types of lenders. First, referring to loans made by other than banks or savings and loan associations, it declares that all bonds, notes, contracts, deposits of goods, and the like arising within a usurious transaction are void. Thus, when a court deems a transaction to be usurious, it must declare the transaction and its supporting documents void, enjoin prosecution on them and order that all documents and collateral be canceled and surrendered. Second, section 5-511 provides that when the lender is a bank or savings and loan association, the usurious transaction is not void, but any interest thereon is forfeited. A penalty is also assessed: any excess interest paid by a borrower to the institution may be recovered from it in twice the amount paid. Section 5-513 provides that a borrower who is subject to a usurious transaction may bring an action to recover the excess interest paid on the loan.

Contrary to defendants’ contentions, section 5-519’s bar to further penalties or forfeitures after the tender of illegal interest does not foreclose a judicial determination that a usurious instrument is void, and that the underlying transaction and supporting documents have no legal force or binding effect. Such a determination is not just "another” penalty or forfeiture contained in sections 5-511 or 5-513 and it should not be confused with the penalties or forfeitures imposed by article 5 of the General Obligations Law. A penalty is commonly understood to be the exacting of a sum of money as punishment for performing a prohibited act, or for not performing a required act (see, Black’s Law Dictionary, at 1020 [5th ed 1979]), e.g., the payment of double the amount of excess interest required by section 5-511. A forfeiture is the loss of a right by the commission of a crime or fault (id., at 584), e.g., the forfeiture of interest provided in section 5-511. A legal determination that a transaction governed by section 5-511 is void is not a penalty or a forfeiture. It is no more than the implementation of a statutory expression of the familiar rule that illegal contracts, or those contrary to public policy, are unenforceable and that the courts will not recognize rights arising from them (McConnell v Commonwealth Pictures Corp., 7 NY2d 465, 469; Sternaman v Metropolitan Life Ins. Co., 170 NY 13, 19, rearg denied 170 NY 616). The law leaves the parties to such agreements where it finds them (Hettich v Hettich, 304 NY 8; see generally, 21 NY Jur 2d, Contracts, §§ 147-186). Accordingly, section 5-519 does not prevent a declaration of the invalidity of the debt, notwithstanding the tender of excess interest improperly charged. The lender’s tender may avoid future litigation but it cannot revive the void contract.

This conclusion is confirmed by the history of usury laws in this State and by judicial precedent. That historical background was thoroughly analyzed in Curtiss v Teller (157 App Div 804, affd 217 NY 649), the leading case on the subject, and was reviewed by the Appellate Division below (110 AD2d 550, 553-556). At the time Curtiss was decided, the civil usury laws were codified in article 25 of the General Business Law (Consol Laws, ch 20, L 1909, ch 25). The Curtiss court stated that those statutes did two separate things, they "(1) declare^] the usurious transaction void, and (2) provide[d] for forfeitures and penalties against the usurer” (Curtiss v Teller, supra, pp 807-808; see also, Bowery Sav. Bank v Nirenstein, 269 NY 259). In thus interpreting the statute, the court held that the tender-back provisions of section 376 would not save the lender "the money which he had actually advanced upon the usurious loan, together with interest thereon” (id., p 817). In 1963 section 376 was reenacted as section 5-519 of the General Obligations Law and the usury provisions of the General Business Law were consolidated into it, the sponsor of the legislation noting that no change in the existing law on the subject was intended (1963 NY Legis Ann, at 103). Inasmuch as the recodification did not alter the words of the statute and was not intended to alter the effect or judicial interpretation of it, perforce, it did not change the consequences of a tender back of excess interest.

There was a significant change of the language of section 5-519 in 1965, however. At that time a State commission investigating organized crime’s loan-sharking activities in New York determined that, for all practical purposes, there were no criminal sanctions for usury, whatever the effective rate of interest charged, and it recommended extensive changes in the law to protect citizens against such crimes (see, State Commission of Investigation, "The Loan Shark Racket”, at 81-82 [Apr. 1965]). The Legislature subsequently enacted comprehensive legislation to deal with this problem, the express intent of which was to "amend the penal law and the general obligations law, in relation to criminal usury and possession of records of a criminally usurious loan” (L 1965, ch 328; see, 1965 NY Legis Ann, at 49). Its approach was to create the crime of usury with enactment of other provisions designed to implement and strengthen that basic purpose (see, 1965 NY Legis Ann, at 49). The sole amendment to the General Obligations Law was the alteration of language in section 5-519 (compare, General Obligations Law § 5-519, pp 46-47, ante, with General Business Law former § 376, p 49, n 2, ante). This alteration removed the words "acquitted” and "punishment” and added the phrase "under sections 5-511 or 5-513”, the words prompting the present dispute, in order to distinguish the penalties of civil usury laws from the punishments of the criminal usury laws (see, Hammelburger v Foursome Inn Corp., 54 NY2d 580, 591, n 2). In so amending the section, the sponsor stated that the Legislature intended to: "clarify and conform its language to reflect the original purpose of [section 5-519]. The amendment will merely codify the present judicial interpretation of the section making it very clear that the penalties which are relieved by a re-payment under this section are those imposed by the preceding sections of Article 5 * * * The bill would in no way modify or amend existing laws and regulations which limit or define authorized and lawful rates of interest and the conduct of money lending business. The bill is designed solely to provide a weapon against the criminal loan shark where none now exists.” (1965 NY Legis Ann, at 47 [emphasis supplied].)

The "present judicial interpretation” the amendment intended to reflect was the interpretation we affirmed in Curtiss v Teller (157 App Div 804, affd 217 NY 649, supra), namely, that a usurious transaction is void ab initia, and a return of excess interest cannot save to the lender the money actually advanced, or the interest due on the loan (see, id., p 817). Consequently, although defendants need not return the lawful interest plaintiff has already paid, they cannot recover either the money loaned or the interest remaining due in this transaction.

The order below should be modified to grant plaintiff partial summary judgment declaring the note and the stock power void and ordering their return together with the stock certificate; defendants should be ordered to return to plaintiff the excess over the legal interest paid on the loan, and the matter should be remitted to Supreme Court, New York County, for a determination of the amount due. As so modified, the order is affirmed, with costs. The certified question is answered in the negative.

Chief Judge Wachtler and Judges Meyer, Kaye, Titone and Hancock, Jr., concur; Judge Alexander taking no part.

Order modified and case remitted to Supreme Court, New York County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed, with costs to plaintiff. Question certified answered in the negative.

      . Section 5-511 provides:
      "Usurious contracts void
      "1. All bonds, bills, notes, assurances, conveyances, all other contracts or securities whatsoever, except bottomry and respondentia bonds and contracts, and all deposits of goods or other things whatsoever, whereupon or whereby there shall be reserved or taken, or secured or agreed to be reserved or taken, any greater sum, or greater value, for the loan or forbearance of any money, goods or other things in action, than is prescribed in section 5-501, shall be void, except that the knowingly taking, receiving, reserving or charging such a greater sum or greater value by a savings bank, a savings and loan association or a federal savings and loan association shall only be held and adjudged a forfeiture of the entire interest which the loan or obligation carries with it or which has been agreed to be paid thereon. If a greater sum or greater value has been paid, the person paying the same or his legal representative may recover from the savings bank, the savings and loan association or the federal savings and loan association twice the entire amount of the interest thus paid.
      "2. Except as provided in subdivision one, whenever it shall satisfactorily appear by the admissions of the defendant, or by proof, that any bond, bill, note, assurance, pledge, conveyance, contract, security or any evidence of debt, has been taken or received in violation of the foregoing provisions, the court shall declare the same to be void, and enjoin any prosecution thereon, and order the same to be surrendered and cancelled.”
      Section 5-513 provides:
      "Recovery of excess
      "Every person who, for any such loan or forbearance, shall pay or deliver any greater sum or value than is allowed to be received pursuant to section 5-501, and his personal representatives, may recover in an action against the person who shall have taken or received the same, and his personal representatives, the amount of the money so paid or value delivered, above the rate aforesaid.”

      . General Business Law § 376 provided: "Return of excess a bar to further penalties. Every person who shall repay or return the money, goods or other thing so taken, accepted or received, or the value thereof, shall be acquitted and discharged from any other or further forfeiture, penalty or punishment, which he may have incurred, by taking or receiving the money, goods or other things so repaid, or returned, as aforesaid” (Recodified at General Obligations Law § 5-519 [L 1963, ch 576]).

      . The Commission’s report noted that, in 1965, "law enforcement personnel have available only two usury laws which carry penal sanctions. One is Section 357 of the Banking Law, the other, present law, Section 2400 of the Penal Law” (State Commission of Investigation, "The Loan Shark Racket”, at 81). Section 357 of the then Banking Law penalized as a misdemeanor "loans of $800 or less bearing more than the authorized rate of interest, made to individuals by unlicensed lenders” (id,.). Section 2400 of the then Penal Law penalized usury as a misdemeanor "only when tools, implements of trade or household goods are taken as security” (id.).


text:
    Donald Sheehan et al., Appellants, v County of Suffolk, Respondent. Wallace MacKechnie et al., Appellants, v County of Sullivan et al., Respondents.
    Argued January 9, 1986;
    decided February 13, 1986

      POINTS OF COUNSEL

      Irwin Popkin and David N. Brainin for appellants in the first above-entitled action.
    I. The acquisition by Suffolk County of real property for the nonpayment of real estate taxes, without giving notice to the owner, or an opportunity to be heard violates due process. (Mullane v Central Hanover Trust Co., 339 US 306; Kelly v Pittsburgh, 104 US 78; Hodge v Muscatine County, 196 US 276; Hagar v Reclamation Dist. No. 108, 111 US 701; Sniadach v Family Fin. Corp., 395 US 337; Fuentes v Shevin, 407 US 67; Mennonite Bd. of Missions v Adams, 462 US 791; Blye v Globe-Wernicke Realty Co., 33 NY2d 15; Sharrock v Dell Buick-Cadillac, 56 AD2d 446; Catoor v Blair, 358 F Supp 815, 414 US 990.) II. After acquiring the property in violation of due process, the retention by Suffolk County of the surplus upon a subsequent resale of the property constitutes a taking without just compensation. (Chapman v Zobelein, 237 US 135; United States v Lawton, 110 US 146; King v Mullins, 171 US 404; Kentucky Union Co. v Kentucky, 219 US 140; People ex rel. McColgan v Palmer, 10 App Div 395; People ex rel. Griffin v Mayor of Brooklyn, 4 NY 419.)

      Martin Bradley Ashare, County Attorney (John C. Bivona of counsel), for respondent in the first above-entitled action.
    I. The State Legislature enacted a constitutionally complete and exhaustive tax collection, enforcement and administrative program. (Harris v Jacobs, 69 Misc 2d 4, 40 AD2d 677, 32 NY2d 914; Heffner v Northwestern Life Ins. Co., 123 US 747; Devine v County of Suffolk, 71 Misc 2d 883; Cooke v Mulligan, 81 Misc 2d 1025; County of Herkimer v Village of Herkimer, 251 App Div 126; Oneida Indian Nation of N. Y. v County of Oneida, 434 F Supp 527, 464 F2d 916, 414 US 661.) II. As to plaintiff Sheehan, his effort to redeem was an inconsequential act. (Eugene Osterhout, Inc. v Sardo, 66 AD2d 167; Matter of Blatnicky v Ciancimino, 1 AD2d 383, 2 NY2d 943; Rogers v Jewell, 520 F Supp 243.) III. The profit motive, if any, does not cause an impermissible erosion of constitutional rights. (Callahan v Underwood, 260 App Div 352, 285 NY 620; Harris v Jacobs, 69 Misc 2d 4; Matter of Gould Realty Co. v Reutershan, 284 NY 540; Balthazar v Mari Ltd., 301 F Supp 103, 396 US 114.) IV. Plaintiffs received the statutory notices as prescribed under the Suffolk County Tax Act and the Real Property Tax Law. V. Dispositional auction sales are an exercise of the taxing power. (Balthazar v Mari Ltd., 301 F Supp 103; United States v Lawton, 110 US 146; Hersee v Porter, 100 NY 403; Matter of City of New York [801-815 E. N. Y. Ave.], 290 NY 235; Melahn v Hearn, 92 AD2d 319, 60 NY2d 944; Lee v Farone, 261 App Div 674, 288 NY 517.) VI. The circumstances of this case do not present a violation of the requirements for procedural due process under the Fourteenth Amendment of the United States Constitution. (Botens v Aronauer, 32 NY2d 243, 414 US 1059; Griffin v City of Syracuse, 179 Misc 250, 266 App Div 1055, 292 NY 639; City of Syracuse v Murray, 179 Misc 244; Matter of Municipal Lien Corp. v Gawronski, 42 Misc 2d 369; Harris v Jacobs, 69 Misc 2d 4, 40 AD2d 677; Nelson v City of New York, 352 US 103; Balthazar v Mari Ltd., 301 F Supp 103, 396 US 114.) VII. Under the circumstances presented there is no violation of the notions of substantive due process embodied within the Fourteenth Amendment of the United States Constitution. (Hurtado v California, 110 US 516; Mugler v Kansas, 123 US 623; Treigle v Acme Homestead Assn., 297 US 189; Pennsylvania Coal Co. v Mahon, 260 US 393; Nelson v City of New York, 352 US 103; Chapman v Zobelein, 237 US 135; Balthazar v Mari Ltd., 301 F Supp 103, 396 US 114.)

      Edward J. Meyer for appellants in the second above-entitled action.
    Taking property having a value in excess of a tax lien to satisfy that lien without affording the owner a hearing on the value of the property or the opportunity to recover the excess value is unconstitutional. (Chapman v Zobelein, 237 US 135; United States v Lawton, 110 US 146; Nelson v City of New York, 352 US 103; Matter of In Rem Tax Foreclosure Action No. 37, 118 Misc 2d 1081; City of New York v Chapman Docks Co., 1 AD2d 895.)

      James G. Sweeney, County Attorney, for County of Orange, respondent in the second above-entitled action.
    I. The complaint fails to state a cause of action under either the Fifth Amendment of the United States Constitution or NY Constitution, article I, § 7. (People ex rel. Griffin v Mayor of Brooklyn, 4 NY 419; Howell v City of Buffalo, 37 NY 267.) II. The circumstances of this case do not present a violation of the requirements for due process under the Fourteenth Amendment of the United States Constitution or NY Constitution, article I, § 6. (Botens v Aronauer, 32 NY2d 243, 414 US 1059; Griffin v City of Syracuse, 179 Misc 250, 266 App Div 1055, 292 NY 639; City of Syracuse v Murray, 179 Misc 244; Matter of Municipal Lien Corp. v Gawronski, 42 Misc 2d 369; Harris v Jacobs, 69 Misc 2d 4, 40 AD2d 677; Nelson v City of New York, 352 US 103; Balthazar v Mari Ltd., 301 F Supp 103, 396 US 114.) III. Under the circumstances presented there is no violation of the notions of substantive due process embodied within the Fourteenth Amendment of the United States Constitution. (Hurtado v California, 110 US 516; Mugler v Kansas, 123 US 623; Treigle v Acme Homestead Assn., 297 US 189; Pennsylvania Coal Co. v Mahon, 260 US 393; Locher v New York 198 US 45; City of New York v Nelson, 309 NY 94, 352 US 103; Chapman v Zobelein, 237 US 135; Balthazar v Mari Ltd., 301 F Supp 103, 396 US 114.) IV. Plaintiffs have no rights upon a resale of the delinquent lands by the counties. (Chapman v Zobelein, 237 US 135; Sussman v Escambia County, 190 F2d 809.) V. The common-law doctrine of unjust enrichment has no applicability to the facts at hand.

      Robert Abrams, Attorney-General (Michael S. Buskus, Robert Hermann and Peter H. Schiff of counsel), for State of New York, respondent in the second above-entitled action and in his statutory capacity under Executive Law § 71 in both the first and second above-entitled actions.
    I. No violation of substantive due process occurs simply because a delinquent taxpayer’s failure timely to redeem his property results in a forfeiture. (Hersee v Porter, 100 NY 403; Solomon v City of New York, 94 AD2d 283; Matter of Elinor Homes Co. v St. Lawrence, 113 AD2d 25; Bull v United States, 295 US 247; Chapman v Zobelein, 237 US 135; Nelson v City of New York, 352 US 103; Kemmerer Coal Co. v Brigham Young Univ., 723 F2d 54; City of Buffalo v Cargill, Inc., 44 NY2d 7; Heyert v Orange & Rockland Utils., 17 NY2d 352; United States v Title Ins. Co., 265 US 472.) II. There is no violation of procedural due process where, as here, notice is sent to the last known address of the property owner before a tax sale and again before expiration of the time to redeem. (North Laramie Land Co. v Hoffman, 268 US 276; Lily Dale Assembly v County of Chautauqua, 72 AD2d 950, 52 NY2d 943, cert denied sub nom. Lily Dale Assembly v Josephson, 454 US 823; Mullane v Central Hanover Trust Co., 339 US 306; Bell v Burson, 402 US 535; Fuentes v Shevin, 407 US 67; Memphis Light, Gas & Water Div. v Craft, 436 US 1; Vlandis v Kline, 412 US 441; Cleveland Bd. of Educ. v LaFleur, 414 US 632; Mennonite Bd. of Missions v Adams, 462 US 791; Tobia v Town of Rockland, 106 AD2d 827.) III. No compensable "taking” occurred despite any future "profit” to the purchaser at a tax sale who later resells. (Texaco, Inc. v Short, 454 US 516; Nelson v City of New York, 352 US 103; Penn Cent. Transp. Co. v New York City, 438 US 104; Rogin v Bensalem Twp., 616 F2d 680, cert denied sub nom. Mark-Garner Assoc. v Bensalem Twp., 450 US 1029; Brushaber v Union Pac. R. R. Co., 240 US 1; Matter of Elinor Homes Co. v St. Lawrence, 113 AD2d 25.)
   OPINION OF THE COURT

Titone, J.

The question presented is whether a real property tax scheme which requires notice to a taxpayer of taxes due, notice of delinquent taxes, notice of a tax lien sale, a tax sale without competitive bidding, a redemption period and notice of the impending expiration of the redemption period before the resale of the property at public auction and retention of any surplus by the county, deprives a taxpayer of property without due process of law or constitutes a taking without just compensation. We hold that it does not.

I

A

In Sheehan v County of Suffolk, the named plaintiffs are former resident owners of real property in Suffolk County. It is undisputed that both plaintiffs failed to pay real property taxes due. Pursuant to Suffolk County Tax Act (SCTA) § 26 (2) (L 1920, ch 311, as amended), the county mailed the following notice to each plaintiff: "The records of this office indicate that you have neglected to pay the taxes levied against real property assessed to you for the current tax year. You are hereby notified that pursuant to the law the tax rolls have been returned to the county treasurer and that unless the unpaid taxes, plus interest and penalties, are paid prior to the publication of the tax sale lists which will occur soon after September 1st next, the tax lien against your real property will be advertised for sale in the following newspapers designated to publish tax sale lists this year to wit: [names of newspapers] and such tax lien will be sold pursuant to such advertisement. For further information you must communicate with the county treasurer at Riverhead, New York, giving him your name and address and a brief description of your real property including map and lot number”. Subsequently, Suffolk County purchased the tax liens at a sale at which it was the only bidder allowed (Suffolk County Legislature Resolution No. 829-1971).

At least three months prior to the end of the 36-month redemption period, a notice of unredeemed real estate was both published (SCTA § 52) and mailed to the plaintiffs (Real Property Tax Law § 1014). After the redemption period expired, the county automatically obtained deeds to the properties from the county treasurer. Following the conveyance of the deeds, the taxpayers were allowed nine additional months within which to redeem the properties. Neither taxpayer made any timely effort to redeem. Several years later, the county sold the properties at public auctions and retained the substantial differences between the lien amounts and the sale prices.

Plaintiffs then commenced this action for a determination of claims to the real property and for a judgment declaring the County’s tax scheme unconstitutional. Special Term dismissed the complaint upon cross motions for summary judgment. Plaintiffs appeal directly to this court, pursuant to CPLR 5601 (b) (2), challenging only the constitutionality of the statutory scheme, having waived all other nonconstitutional claims (Cohen and Karger, Powers of the New York Court of Appeals § 58, at 262-263 [rev ed]).

B.

In MacKechnie v County of Sullivan each of the named plaintiffs failed to pay real property taxes after each received notice by mail of the tax obligation (Real Property Tax Law § 922). Proper advance notice of an impending tax sale was given (Real Property Tax Law § 1002). Pursuant to Real Property Tax Law § 1008 (3) and resolutions passed by the defendant counties, the counties purchased the properties at tax sales without competitive bidding.

The plaintiffs were permitted to redeem their properties during a three-year period (Real Property Tax Law §§ 1010, 1022, 1024). Within six months of the expiration of the redemption period, each plaintiff received notice by mail of the upcoming expiration. None of the plaintiffs redeemed. The counties took deeds to the properties pursuant to Real Property Tax Law § 1018.

The counties sold most of the properties at public auctions and retained the proceeds in excess of the taxes and penalties due. Orange County still retains the deed to one property upon which it refuses to allow redemption.

Plaintiffs’ action for a judgment declaring the statutory tax scheme unconstitutional, for damages and for injunctive relief was dismissed by Special Term for failure to state a cause of action. They have taken a direct appeal from the judgment to this court (CPLR 5601 [b] [2]).

II

Plaintiffs urge that the counties’ failure to inform them that the tax liens would not be sold at a competitive bidding and that they would not receive any surplus from the ultimate public auctions of the properties violated the due process clauses of the State and Federal Constitutions. They also contend that permitting the counties to purchase tax liens without competitive bidding and then ultimately to sell the properties without turning over the surplus to the owners amounts to a taking without just compensation. We disagree, and affirm both judgments.

Analysis should begin with the well-settled proposition that an owner of property is charged with knowledge of statutory provisions affecting the control or disposition of his or her property (Texaco, Inc. v Short, 454 US 516, 531; Congregation Yetev Lev D’Satmar v County of Sullivan, 59 NY2d 418, 423). So viewed, it was the plaintiffs’ failure to inform themselves of the relevant competitive bidding and forfeiture statutes that worked the arguably harsh consequences, not the statutory provisions (United States v Locke, 471 US 84, —, 105 S Ct 1785, 1799).

Due process does not require that every taxpayer be advised of the possible consequences attaching to a default in payment (United States v Locke, supra; Texaco, Inc. v Short, supra; North Laramie Land Co. v Hoffman, 268 US 276; Congregation Yetev Lev D’Satmar v County of Sullivan, supra; Lily Dale Assembly v County of Chautauqua, 52 NY2d 943, affg 72 AD2d 950, cert denied 454 US 823). Once taxpayers are provided with notice and an opportunity to be heard on the adjudicative facts concerning the valuation of properties subject to tax, as was done here, they have received all the process that is due (Mennonite Bd. of Missions v Adams, 462 US 791, 798-800; Mullane v Central Hanover Trust Co., 339 US 306; Botens v Aronauer, 32 NY2d 243, appeal dismissed 414 US 1059; 3 Davis, Administrative Law § 15:9 [2d ed 1980]). At this juncture, summary remedies for the collection of taxes may be invoked (Botens v Aronauer, supra).

There is no unfairness, much less a deprivation of due process, in the county’s retention of any surplus. The taxpayers in each of the statutory schemes under review are given a three-year period of redemption. During this period, plaintiffs had the opportunity to either pay the taxes and penalties due or sell the property subject to the lien and retain the surplus. This redemption period affords the taxpayer an opportunity to avoid a full forfeiture (see, Chapman v Zobelein, 237 US 135). Statutes which allow a State to retain the excess collected upon the public sale of property have been sustained where they provide for a lengthy redemption period (Chapman v Zobelein, supra; Turner v New York, 168 US 90, 94; Balthazar v Mari Ltd., 301 F Supp 103, affd 396 US 114).

A three-year redemption period, as set forth in the challenged statutes, gives sufficient opportunity for a taxpayer to reclaim the property. It is not unjust for a legislative body to declare that once a taxpayer has abandoned rights in property after such a period has expired, the taxing authority may take a deed in fee. At that point, the former owner can no longer claim any just compensation upon its resale (Texaco, Inc. v Short, 454 US 516, 530, supra). Full forfeiture has already occurred upon the taxpayer’s failure to redeem the property before it has been resold.

There is no constitutional prohibition against such a full forfeiture (Balthazar v Mari Ltd., 301 F Supp 103, affd 396 US 114, supra; see also, Nelson v City of New York, 352 US 103; Chapman v Zobelein, supra). United States v Lawton (110 US 146) did not hold to the contrary. In Lawton, the Federal statute under which the property was sold required return of any surplus. Obviously, in the face of such a statute, payment of any excess to the former owner was required and Nelson v City of New York (supra, at pp 109-110) expressly distinguished Lawton on that basis.

Finally, there is no constitutional requirement that tax liens be sold only through competitive bidding (Saranac Land & Timber Co. v Comptroller of N. Y., 177 US 318, 326-328). Finding abuses engaged in by land speculators, the State Legislature has permitted localities to restrict tax lien sales to governmental bodies (see, Matter of Elinor Homes Co. v St. Lawrence, 113 AD2d 25). The localities here exercised that option, and we cannot say that in doing so they have engaged in impermissible objectives or have deprived the plaintiffs of any constitutionally protected rights.

Accordingly, the judgments of the Supreme Court in Sheehan v County of Suffolk and MacKechnie v County of Sullivan, dismissing plaintiffs’ actions should be affirmed, with costs.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye, Alexander and Hancock, Jr., concur.

In each case: Judgment affirmed, with costs.


author: Per Curiam.

text:
    In the Matter of Ronald V. Bailey, a Justice of the Keeseville Village Court, Petitioner. State Commission on Judicial Conduct, Respondent.
    Argued February 10, 1986;
    decided February 19, 1986

      POINTS OF COUNSEL

      Robert P. Roche for petitioner.
    The action of the Commission to wit, to specify charges while a judge is serving in a judicial position to which he was duly elected regarding an allegation of charges of misconduct or conduct unbecoming a member of the judiciary or bringing disgrace upon the judiciary while sitting in another elected judicial position has the effect of voiding the action of the electorate and disenfranchising all of the people who were lawfully exercising their right to vote for Ronald V. Bailey as Village Justice in the Village of Keeseville.

      Jean M. Savanyu and Gerald Stern for respondent.
    I. Petitioner’s conduct violated established ethical standards and demonstrates lack of fitness for judicial office. (Matter of Steinberg, 51 NY2d 74; Matter of Perry, 53 AD2d 882; Matter of Boulanger, 61 NY2d 89; Matter of Kuehnel v State Commn. on Judicial Conduct, 49 NY2d 465.) II. The Commission’s determination of removal, based upon conduct that occurred during a prior judicial office, is proper. (Matter of Sarisohn, 26 AD2d 388, 27 AD2d 466, 21 NY2d 36, 29 AD2d 91, 22 NY2d 808, 392 US 1116; Matter of Hayes, 43 AD2d 872, 35 NY2d 755; Matter of Pfingst, 33 NY2d [a]; Matter of Kane, 50 NY2d 360; Matter of Fabrizio, 65 NY2d 275; Matter of Sardino v State Commn. on Judicial Conduct, 58 NY2d 286; Matter of Quinn v State Commn. on Judicial Conduct, 54 NY2d 386; Matter of Reeves, 63 NY2d 105.)
   OPINION OF THE COURT

Per Curiam.

A judge may be removed from office for misconduct occurring while he held a different judicial office, notwithstanding that his prior misconduct was known to the voters who elected him to the judicial position from which removal is now sought.

From January 1971 through 1981, petitioner served as a Justice of the Chesterfield Town Court, Essex County. During 1980, in order to increase the number of deer his hunting party could kill beyond the legal limit, he engaged in a scheme to obtain hunting licenses in the names of persons he knew would not use them, falsely certifying that the persons in whose names licenses were applied for had signed the applications, when in fact petitioner had done so, and applied for party permits in the names of persons who had not authorized him to do so or who were not intended to be part of his hunting party. On September 8, 1982, he pleaded guilty to a charge of making a false statement to obtain a license in violation of the Environmental Conservation Law, a misdemeanor, and was sentenced to pay a fine of $200 and given a conditional discharge.

On April 2, 1984, after election to the office of Justice of the Keeseville Village Court, Essex County, petitioner assumed that office. Thereafter the State Commission on Judicial Conduct issued its formal complaint. After petitioner stipulated to waive a hearing and agreed to a statement of facts, the Commission found the charges sustained and determined that the appropriate sanction was removal.

In this review proceeding pursuant to NY Constitution article VI, § 22 (d) and Judiciary Law § 44 (7) petitioner does not contest that his conduct warranted removal. Rather he contends that he cannot be removed from his position as Keeseville Justice for conduct of which the voters were aware at the time he was elected to that office, because to do so would disenfranchise the voters who elected him. We disagree.

The same argument was made in Matter of Sarisohn (26 AD2d 388, appeal dismissed 19 NY2d 599, lv denied 19 NY2d 689, on appeal after hearing 21 NY2d 36, on further appeal after remand 22 NY2d 808, cert denied 393 US 1116). Sarisohn was charged with various acts of misconduct prior to his election as District Court Judge while serving as a Justice of the Peace. By pretrial motion he sought dismissal of allegations of misconduct which preceded his election to the District Court on the ground that the court was without power to nullify the selection of the voters by removing him. His motion was denied (26 AD2d, at p 391), and when the same question was again raised on his appeal to this court after hearing and determination of removal, we held it immaterial that the prior office was a different judgeship, reasoning that "[i]t would be an unseemly and unsound distinction with respect to a matter affecting general character and fitness to immunize a Judge from his prior misconduct as a Judge of lesser or higher rank.” (21 NY2d, at p 46.)

A similar holding is to be found in Matter of Hayes (43 AD2d 872, appeal dismissed for want of constitutional question 35 NY2d 755), the Appellate Division concluding in that case that "[t]he fact that respondent has since been re-elected to office in no way affects our judgment or impairs our authority to order his removal”, and Matter of Newman v Strobel (236 App Div 371, 375) recounts three different legislative impeachment proceedings resulting in removal of judges, after election to a second term, for misconduct during an earlier term (see also, Ann., 42 ALR3d 691, 712; 67 CJS Officers and Public Employees, § 120 [c]).

True it is that in some of those decisions the court noted that the judge’s misconduct was unknown to the public (but see, Matter of Abare v Hatch, 21 AD2d 84, 86). In our view, however, knowledge of the voters can no more immunize a judge from removal for misconduct in a prior judicial office than election of a person without the number of years practice of law required by article VI, § 20 (a) of the Constitution can authorize such a person to hold office (cf. Maresca v Cuomo, 64 NY2d 242). Petitioner points to nothing in the Constitution or in statute vesting the voters with the power to pardon (cf. NY Const, art IV, § 4; People v Broncado, 188 NY 150, 155). To conclude that misconduct which the Legislature has expressly provided shall forever disqualify from judicial office can be absolved by election to a new judicial office (or reelection to the same office) after the misconduct became known would be a perversion of both logic and legislative intent.

Accordingly, the determined sanction is accepted, without costs, and Ronald V. Bailey is, notwithstanding his resignation therefrom, removed from the office of Justice of the Keeseville Village Court, Essex County.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye, Titone and Hancock, Jr., concur in Per Curiam opinion; Judge Alexander taking no part.

Determined sanction accepted, without costs, and Ronald V. Bailey is removed from the office of Justice of the Keeseville Village Court, Essex County.

       In fact, after filing his review request, petitioner resigned his position as Keeseville Justice in order to become a candidate for Supervisor of the Town of Chesterfield. The proceeding is not moot, however, for Judiciary Law § 47 provides that removal of a judge who has resigned "shall render such judge ineligible to hold any other judicial office” (see, Matter of Scacchetti v State Commn. on Judicial Conduct, 56 NY2d 980, 982).


text:
    Samuel J. D’Angelo, Respondent, v Mary Cole et al., Constituting the Village Board of the Village of Avon, et al., Appellants.
    Argued January 10, 1986;
    decided February 19, 1986

      POINTS OF COUNSEL

      Dennis S. Cohen and Harold J. Van Opdorp for appellants.
    I. A municipal enactment is presumed to be constitutional. (Matter of Van Berkel v Power, 16 NY2d 37; I. L. F. Y. Co. v Temporary State Hous. Rent Commn., 10 NY2d 263; Wiggins v Town of Somers, 4 NY2d 215; Defiance Milk Prods. Co. v Du Mond, 309 NY 537; Town of Huntington v Park Shore Country Day Camp, 47 NY2d 61; City of Rochester v West, 164 NY 510;
      United States v Carotene Prods. Co., 304 US 144; Williamson v Lee Opt. Co., 348 US 483; Town of N. Hempstead v Exxon Corp., 53 NY2d 747; Town of Hempstead v Goldblatt, 9 NY2d 101.) II. The repairs to the private road was not a public improvement subject to the assessment procedures of the Village Law. III. The Village may charge the property owner for the expenses incurred by it to place the private road in proper condition for use by the public. (Jenad, Inc. v Village of Scarsdale, 18 NY2d 78; D’Uva v Wheeler, 104 Misc 2d 367; City of Newburgh v Park Filling Sta., 273 App Div 24, 298 NY 649; Health Dept. v Rector, Church Wardens & Vestrymen, 145 NY 32; North Am. Stor. Co. v Chicago, 211 US 306.)

      James McCann for respondent.
    I. The ordinance is unconstitutional because there is no reasonable relationship between what is sought to be achieved and the means used to achieve that end. (People ex rel. Wineburgh Adv. Co. v Murphy, 195 NY 126; French Investing Co. v City of New York, 39 NY2d 587, 429 US 990.) II. The ordinance is unconstitutionally vague. (Calderon v City of Buffalo, 61 AD2d 323, 44 NY2d 648.) III. The Village of Avon has made a public improvement and must pay compensation. (Nashville, Chattanooga & St. Louis Ry. v Walters, 294 US 405; Delaware, Lackawanna & W. Ry. Co. v Morristown, 276 US 182; Loretto v Teleprompter Manhattan CATV Corp., 458 US 419; French Investing Co. v City of New York, 39 NY2d 587; Lutheran Church v City of New York, 35 NY2d 121.) IV. The ordinance cannot be sustained as a special assessment since the land of adjoining owners is not assessed. (Norwood v Baker, 172 US 269; Matter of Grant Ave., 76 App Div 87, 175 NY 509.) V. The ordinance is invalid because it seeks payment for the improvement by seeking a money judgment.
   OPINION OF THE COURT

Titone, J.

We are called upon to determine whether a village may constitutionally impose strict maintenance standards upon private road owners and, in the event of an owner’s failure to comply, whether the village may repair the road and seek reimbursement in a civil action. As shall be demonstrated, the village may impose such maintenance standards, but may not recover the costs in a civil suit against the owner without assessment and levy, because the enabling legislation contemplates an in rem proceeding. In addition, the failure of the village to comply with the requisites of the competitive bidding statutes would, in any event, preclude the village from recovering the cost of the repairs from the landowner.

In 1980, the Village of Avon, noting its necessity for the public’s safety, enacted Avon Village Ordinance § 36.4 setting "Maintenance Standards” for private roads. The first three standards prohibit owners of private roads open to use by the general public from allowing the accumulation of potholes, dust and mud. The ordinance also mandates the crowning of roads so that the center of the road is at least 6 inches higher than either of the edges and prohibits the owner from allowing water to collect on the road. In addition, owners are also required to pave the roads or to spread a minimum base of 18 inches of bank run gravel and a minimum of 6 inches of crusher run gravel. The Village must give a private road owner 10 days notice within which to comply with its provisions, and if the owner then fails to do so, the Village is empowered to expend funds to bring the roadway to standard and recover the cost from the owner in a civil suit. The ordinance also contains provisions for criminal liability.

The Village served notice upon plaintiff pursuant to section 36.5 (A) of the ordinance that his roadway was improperly maintained. Upon plaintiff’s failure to correct the condition within 10 days, the Village constructed a fully complying road at an expense of $8,374.49.

Plaintiff then brought this action against the Village seeking a judgment declaring the ordinance unconstitutional. The Village counterclaimed for $8,374.49, the cost of the improvements. Plaintiff responded that the work had not been opened to public bid pursuant to General Municipal Law § 103, and, therefore, the public expenditure of $8,374.49 was illegal.

After a nonjury trial, the Supreme Court held the ordinance constitutional and directed the entry of judgment in favor of the Village in the sum of $5,000, the maximum contract that may be let without competitive bidding. The Appellate Division reversed, finding that the "Maintenance Standards” were not reasonably necessary to achieve the stated purposes of the ordinance and dismissed the Village’s counterclaim.

On this appeal, defendants seek reinstatement of the Supreme Court judgment. Plaintiff, on the other hand, urges that the ordinance is unconstitutional as violative of due process (A) because there is no reasonable relationship between the objectives that the Village seeks to achieve and the means used to achieve them, and (B) because the procedure of a civil suit exceeds the enabling legislation (Village Law § 4-414). We conclude that the ordinance does not violate due process, but that it does exceed the limitations of Village Law § 4-414 and is invalid to that extent.

In order to sustain a due process challenge plaintiff must, of course, overcome the strong presumption of constitutionality (Lighthouse Shores v Town of Islip, 41 NY2d 7; Salamar Bldrs. Corp. v Tuttle, 29 NY2d 221; Nettleton Co. v Diamond, 27 NY2d 182, 193, appeal dismissed sub nom. Reptile Prods. Assn. v Diamond, 401 US 969) and demonstrate that the ordinance is arbitrary and irrational (Town of N. Hempstead v Exxon Corp., 53 NY2d 747; Lighthouse Shores v Town of Islip, supra, at p 11). This he has failed to do.

To be sure, a Village ordinance enacted under the police power must bear a reasonable connection to the public health, comfort, safety and welfare (Patterson v Carey, 41 NY2d 714, 720; French Investing Co. v City of New York, 39 NY2d 587, 596, appeal dismissed 429 US 990; Montgomery v Daniels, 38 NY2d 41, 54). However, the choice among permissible alternatives is to be made by the Village, not by plaintiff or the courts (Town of N. Hempstead v Exxon Corp., 53 NY2d 747, 757, supra; Matter of Albert Simon, Inc. v Myerson, 36 NY2d 300, 303). The expressed legislative judgment, presumptively the product of appropriate investigation and study (Health Ins. Assn. v Harnett, 44 NY2d 302; Matter of Van Berkel v Power, 16 NY2d 37, 40), that properly maintained private roads are essential to the health and safety of the community, may not, without more, be overridden by the judiciary.

Nonetheless, section 36.5 (B) of the ordinance, allowing the Village to recover the costs of the improvement in a civil suit, must be consistent with any enabling State legislation on the subject (Consolidated Edison Co. v Town of Red Hook, 60 NY2d 99, 107; cf. Dougal v County of Suffolk, 65 NY2d 668, affg 102 AD2d 531).

Village Law § 4-414, authorizes villages to recover such costs in a manner "assessed, levied and collected as may be provided by local law.” There is no indication that the Legislature intended the terms to be utilized in the alternative rather than the conjunctive (see, McKinney’s Cons Laws of NY, Book 1, Statutes § 365; cf. Matter of Allstate Ins. Co. v Libow, 65 NY2d 807, affg 106 AD2d 110; Department of Welfare v Siebel, 6 NY2d 536; Davis Constr. Corp. v County of Suffolk, 95 AD2d 819, 820; People ex rel. Williams v Monroe County Ct., 105 App Div 1). Such proceedings are generally in rem (see, e.g., Lane v City of Mount Vernon, 38 NY2d 344; Matter of Barkin [Dept, of Health], 189 Misc 358 [Froessel, J.]) —requiring an assessment and levy — rather than in personam. Thus, any local ordinance must provide a three-step process of first making an assessment and then a levy, before the costs may be collected. To the extent section 36.5 (B) of the ordinance conflicts with Village Law § 4-414, it is invalid.

These considerations aside, reinstatement of the Supreme Court judgment, which had limited recovery to $5,000, would still be improper because General Municipal Law § 103 requires projects greater than that amount to be submitted to competitive bidding. When, as here, competitive bidding is statutorily required, and the municipality fails to follow that procedure, the contract is completely, not partially, void (S. T. Grand, Inc. v City of New York, 32 NY2d 300; Gerzof v Sweeney, 22 NY2d 297; Jered Contr. Corp. v New York City Tr. Auth., 22 NY2d 187).

In such circumstances, a third party should not be forced to reimburse a municipality for expenditures it has advanced in connection with a void contract. Ultimately, the policy of "fostering honest competition in order to obtain the best work or supplies at the lowest possible price” (Jered Contr. Corp. v New York City Tr. Auth., supra, at pp 192-193) would be undermined if a municipality could avoid the consequences of failing to comply with the competitive bidding statutes by the simple expedient of recouping part of the costs. The public fisc is still protected (Matter of Conduit & Found. Corp. v Metropolitan Transp. Auth., 66 NY2d 144) because the municipality is excused from any payment under the void contract, and, indeed, may recover any moneys already paid, even if performance under the contract has been completed and return of the material and labor is impossible (S. T. Grand, Inc. v City of New York, supra; Gerzof v Sweeney, supra; Jered Contr. Corp. v New York City Tr. Auth., supra).

Accordingly, the order of the Appellate Division should be modified, by deleting the provision declaring the ordinance unconstitutional in toto and substituting a provision declaring the ordinance constitutional to the extent that it authorizes repairs to private roads and invalid to the extent that its recoupment provisions conflict with Village Law § 4-414. As so modified, the order should be affirmed, without costs.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye and Alexander concur; Judge Hancock, Jr., taking no part.

Order modified in accordance with the opinion herein and, as so modified, affirmed, without costs.