Rex v Biazzos (Criminal Appeal No. 235 of 1946) [1946] EACA 53 (1 January 1946)

## COURT OF APPEAL FOR EASTERN AFRICA

Before SIR JOSEPH SHERIDAN, C. J. (Kenya), SIR G. GRAHAM PAUL, C. J. (Tanganyika) and SIR JOHN GRAY, C. J. (Zanzibar)

REX, Respondent (Original Prosecutor)

## GEORGE BIAZZOS, Appellant (Original Accused)

## Criminal Appeal No. 235 of 1946

(Appeal from decision of H. M. Supreme Court of Kenya)

Criminal Law—Theft by agent—Conviction for single theft—Minor offence— Bona fide claim of right—Verdict of Jury.

G. B. and M. were partners in a hotel business, M. being a sleeping partner and G. B. having the sole management of the business. G. B. used certain funds of the partnership for his own purpose. He was charged with theft by agent of Sh. $\overline{15,226/61}$ contrary to S. $277$ (b) P. C. His evidence was a bona fide claim of right.

The jury found G. B. guilty of stealing Sh. $6,082/72$ and he was convicted of theft of that sum contrary to S. 269 P. C. G. B. had two previous convictions for cheating and was sentenced to three years' imprisonment with hard labour.

$G. B.$ appealed.

Held (22-11-46).—(1) That on a charge of theft by agent contra S. 277 (b) P. C. an accused may be convicted of the minor offence of theft under S. 269 by virtue of the provisions of S. 179 C. P. C.

(2) That although there was nothing to show how the jury arrived at their verdict the evidence reasonably justified it.

(3) That the sentence although severe was not so excessive as to justify interference therewith.

Appeal dismissed.

Case referred to: Rex v. Roy Hull Home 11 E. A. C. A. 107.

McRoberts for the appellant.

Haughey, Crown Counsel (Tanganyika), for the Crown.

JUDGMENT (delivered by SIR G. GRAHAM PAUL, C. J.)—The appellant was charged in the Supreme Court of Kenya at Mombasa with "stealing by agent contrary to section 277 of the Penal Code", the particulars of the charge in the amended information being as follows:

"George Biazzos between the 12th day of March, 1946, and the 3rd day of May, 1946, in the Coast Province, being manager of and partner in the Azania Hotel, Mombasa, and having been entrusted with the funds of the said hotel, by the only other partner, Mrs. 'Iona' McNaughton, to apply the business of the said hotel, did steal the sum of Shillings fifteen thousand two hundred and twenty-six and sixty-one cents (Sh. 15,226/61)."

At the close of the case Crown Counsel submitted to the learned trial Judge that though the charge was brought under section 277 of the Penal Code, by virtue of the provisions of section 179 of the Criminal Procedure Code the accused could be convicted of theft under section 269 of the Penal Code. Section 179 is in the following terms:-

"(1) When a person is charged with an offence consisting of several $\frac{1}{2}$ particulars a combination of some only of which constitutes a complete

minor offence, and such combination is proved but the remaining particulars are not proved, he may be convicted of the minor offence although he was not charged with it.

(2) When a person is charged with an offence and facts are proved which reduce it to a minor offence, he may be convicted of the minor offence although he was not charged with it."

When the learned Judge came to address the Jury he said at the outset of his summing $up:$ —

"The accused charged with theft by an agent section 277. In my view and you must take the law from me the correct charge was theft contrary to section 269 of the Penal Code. This in my view is clear when one reads section 262 of the Penal Code with section 267. The accused has obviously not been prejudiced in any way by the information not having been amended and under section 179 (2) of the Criminal Procedure Code you are entitled if you find the charge proved to bring a verdict of guilty of theft under section 269 (Authority Rex v. Roy Hull Home (1944) XI E. A. C. A. 107). I propose therefore only to address you on the charge of theft under section $269."$

In order to follow the reasoning of this charge to the Jury it is necessary to set out the terms of sections 277, 267 and 269 of the Penal Code.

Section 277 (b) under which the appellant was originally charged is as $follows: -$

"If the thing stolen is any of the things following, that is to say—

(b) property which has been entrusted to the offender either alone or jointly with any other person for him to retain in safe custody or to

apply, pay, or deliver for any purpose or to any person the same or any part thereof or any proceeds thereof:

the offender is liable to imprisonment for seven years."

Section 269 of the Penal Code is in the following terms: —

"Any person who steals anything capable of being stolen is guilty of the felony termed theft, and is liable, unless owing to the circumstances of the theft or the nature of the thing stolen, some other punishment is provided, to imprisoment for three years."

Section 267 of the Penal Code is as follows: ------------------------------------

"When any person takes or converts anything capable of being stolen, under such circumstances as would otherwise amount to theft, it is immaterial that he himself has a special property or interest therein, or that he himself is owner of the thing taken or converted subject to some special property or interest of some other person therein, or that he is lessee of the thing, or that he himself is one of two or more joint owners of the thing, on that he is a director or officer of a corporation or company or society who are the owners of it."

We have given careful consideration to the argument of appellant's Counsel that section 267 has no application to a charge against a partner in regard to partnership property and we have come to the conclusion that the argument is not sound. In our opinion the terms of section 267 clearly cover such a case having regard to the plain meaning of the words used in the section. We may observe that if we held otherwise it would be at least doubtful whether in Kenya a partner could ever be convicted of stealing partnership property in his hands.

Taking that view of section 267 it follows that a partner can be convicted under section 269 in regard to partnership property in his hands.

The punishment provided under section 277 (b) is imprisonment for seven years. That under section 269 is imprisoment for three years. It follows that the offence under section 269 is, compared with that under section 277 (b) a "minor offence" within the meaning of section 179 of the Criminal Procedure Code. Both sections 277 (b) and 269 deal with the offence of stealing. Stealing is a "particular" common to both sections. Section 277 (b) contains an additional "particular" namely the fact of entrustment of the property in question for a particular purpose. If the stealing is established in a charge under section $277$ (b), but not the entrustment, it follows that under section 179 of the Criminal Procedure Code the accused may be convicted of the minor offence under section 269. The direction to that effect by the learned trial Judge was therefore unexceptionable.

The Jury, taking the law from the learned Judge, as they were bound to do, returned the following verdict: -

"Guilty, verdict of us all. He is guilty of stealing Sh. $6,082/72$ ."

A point in this connexion was raised under section 137 (i) of the Criminal Procedure Code but it will be later dealt with.

Before dealing with the verdict and the attack made upon it in the Memorandum of Appeal and in the arguments of appellant's Counsel before this Court it is necessary to deal shortly with the facts of the case. The case is concerned with the affairs of the Azania Hotel which belonged to Mrs. McNaughton who entered into a partnership agreement with the appellant for the carrying on of the business of the Azania Hotel. The partnership deed was put in evidence but it is unnecessary to set out its terms. It is enough to say that under it Mrs. McNaughton was a sleeping partner and the appellant the active managing partner. The charges relate to certain payments made or moneys retained by the appellant out of partnership funds for his own private purposes and not for the business of the partnership. There is no very material controversy of facts as to these payments or retentions. In the main they were admitted by the appellant.

It is obvious however that it is not enough for the Crown to prove that the active partner in charge of the partnership funds put some of these funds into his own pocket or into the pockets of his own personal creditors. It is not necessarily a criminal offence for a partner to do this. It is necessary for the Crown to prove in addition that the partner, in making these payments or retaining these monies, did so "without a claim of right". In this case the appellant has maintained throughout that in regard to all the items charged he was acting with a claim of right. It is of course not enough for the appellant to say that. The claim of right must be a *bona fide* claim of right, and the main question in this case is whether on the evidence the Jury was justified in finding that the Crown had proved that in regard to the items charged or some part of them the appellant acted without any *bona fide* clai $\mathbb{R}$ of right.

Now it is obvious that in examining this question the first thing to find out is whether at the date of any particular item of the charges the state of the partnership finances was such that there could be a *bona fide* claim of right by the appellant in regard to that particular item. That necessarily involves the examination of the partnership accounts and this was realized by the learned Judge at the close of the Crown case when he noted: -

"Suggest to Crown Counsel that he might consider entering a nolle prosequi and reconsider prosecution after accounts of partnership taken as obviously this Court going to be asked to take account. Difficult in circumstances.

$\overline{1}$

It is in our opinion a great pity that this advice was not taken by Crown Counsel in charge of the prosecution. If the wise course suggested by the learned Judge had been followed, the trial and this appeal would have been vastly simplified. The failure to follow the advice of the learned trial Judge might have seriously jeopardized the Crown case but for the fact that the defect was to a material extent remedied by the appellant himself.

The first things necessary for an examination of partnership finances are of course a ledger and the balance sheet prepared from the ledger.

The appellant at the trial put in evidence a ledger and a balance sheet. The evidence as to the somewhat *ex post facto* nature of the ledger, and therefore of the balance sheet, made them not very reliable documents on which to base a defence, but the Crown, the Jury, and this Court, in examining the case against the accused are entitled to found on the accused's own ledger and balance shelet in so far as they are relevant.

The balance sheet showed that as at 18th May, 1946, the partnership owed to the ambellant the sum of Sh. $12,231/41$ . If on the evidence that could be reasonably take a to represent the true position it would of course go a very long<br>way to low a *bona fide* claim of right on the part of the appellant in his putting partnership money up to the amount of Sh. 12,231/41 into his own pocket of the pockets of his own personal creditors.

But $\mathbf{B}$ is clear from the appellant's own ledger that the balance in his Lavour is due to a credit of Sh. 15,000 entered in the appellant's account in the ledger in respect of a Buick car of that value, the appellant's own property by him alleged to have been sold to the partnership; and this question of the alleged sale of the car requires examination.

It is quite clear on the evidence that the car in question was never *transferred* to the partnership. First there is Ex. T a document made and signed by the appellant himself and by him handed to the accountant employed by him for the partnership accounts. This document is dated 12th March, 1946, and it contains this very definite statement: -

"The above car is a Chattel Mortgage to Mulji Jetha Ltd. Nairobi on monthly payments and on settlement of the mortgage the car will be transferred to Azania Hotel."

In face of that document and the admitted fact that the mortgage has never been settled it would be idle for the appellant to suggest that this car was transferred to the partnership on 12th April, 1946, the date of the entry in his ledger.

Furthermore the appellant in his own statement in evidence on oath said:—

"Yes, I had sold car to Hotel for Sh. 15,000. Azania Hotel had to pay the Sh. 15,000 to me and I had to pay Mulji Jetha. The car had not been trainsferred to Azania Hotel. It would have been illegal",

and again: -

"Didn't obtain permit to transfer car to Azania Hotel from Controller because it was mortgaged and therefore not possible."

It is true of course that the appellant's case is that although he did not, and could not, *transfer* the car to the partnership at the date on which he seeks to credit himself and debit the partnership with the cost of the car, he could and did sell the car to the partnership at that date. He therefore claims that the entries in question were made to represent a real bona fide transaction and not just to cover his defalcations. In dealing with the "claim of right" in his summing up to the Jury the learned Judge expressly referred to the Jury the

question whether or not they believed that these entries had been made only to cover the appellant's defalcations. If the Jury came to the conclusion on the evidence before them—and they very well might—that the entries were not made in good faith but only to cover the appellant's defalcations then the jury were justified in finding that there was no bona fide claim of right and that the accused was therefore, and on the other evidence, guilty of stealing. From the Jury's verdict of guilty, after the summing up on the question of claim of right. we think it only reasonable to assume that the jury did find that the entries about the sale of the car were in fact made without any *bona fides* and only to cover the appellant's defalcations. That meant that the appellant's credit of Sh. 12,231/41 became instead at the best a debit of Sh. 2.768/59. In addition there is the fact shown in the appellant's own trading account that for the period of the partnership to 18th May, 1946, the partnership business showed a loss of Sh. 2,672/89. In that state of affairs manifestly there could be no bona fide claim of right on the part of the appellant in regard to the items charged.

It is true that the Jury by their verdict have found the appellant guilty of stealing only Sh. $6,082/72$ . It is also true that we are not able to stealing only Sh. $6,082/72$ . It is also true that we are not able to stealing only Sh. Stealing only Sn. $6,082/72$ . It is also true that we are not able to se yow the<br>Jury came to arrive at that figure. But that need not concern us. The fact that<br>the Jury found the appellant guilty of stealing only Sh. $6,$ of the Jury in convicting the accused of stealing some part of the items charges up to the amount of Sh. 6,082/72. After a careful consideration of the whole case we are in no doubt whatever on that point.

In regard to the operation of section 179 of the Criminal Procedure Code in this case it has been pointed out that section 137 (j) of the Criminal Procedure Code made it in order to charge the total amount in an information based on section 277 but that section 137 (j) does not cover section 269 under which the appellant was actually convicted. If the original information had charged under section 269 it would have been open to the accused to ask that the particular items be separately specified in different counts whereas in-fact he was deprived of that opportunity by the operation of section 179 of the Criminal Procedure Code in this case. That is quite true, but we are satisfied having regard to the evidence for the prosecution and for the defence that the appellant was in no wise embarrassed in his defence by the fact that the various items were not charged separately. Indeed this point was not made a ground of appeal in the Memorandum of Appeal. We have given consideration to the submission that the sentence is excessive. It is severe, we agree, but in view of the previous convictions which the accused admitted we cannot say that it is so excessive as to justify our interference with it.

For the reasons given the appeal is dismissed.