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FERNANDO v. CHARLES.
P. C., Colombo, 66,459.
Penal Code,». 386—Dishonest misappropriation—Fraudulent failure to account.
Though the mere fact of a servant not paying over to his mastermoneys received by him on account of his master is not an offence undersection 386 of the Penal Code, yet a fraudulent failure to account forsuch moneys is dishonest misappropriation.
A, having been placed in funds by his master to cany on the concernsof a shop, caused an entry to be made in the account books debiting themaster with Rs. 2,465 as amount paid by A to meet a bill drawn by aforeign firm on the master, whereas in fact no such amount was everpaid.
Held, this was a fraudulent failure to account, and that the PoliceMagistrate was wrong in refusing to issue process on the accused on thecomplaint of the master.
OMPLAINANT, a shop-keeper, whose shop was managedby his son-in-law, charged 'him with having criminally
October 8and 16.
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October 8and 16.
misappropriated a sum of Rs. 2,465.65 which the complainantalleged belonged to him, and which was entrusted to the accusedto be paid to the National Bank of India, Limited, for and onbehalf of the complainant on account of a certain bill of exchangewhich had been drawn on the complainant by Joseph Showell &Co., of Birmingham.
The Magistrate, after recording the evidence of complainant,declined to issue process on the accused in these terms: —
“ After reading the judgment in case No. 22,645 of this Court“ (Buchanan v. Conrad, 1 8. C. R. 335), I must decline to issue“ process. There is nothing before me from, which I can inferthat the man Charles, who is charged, misappropriated any“ specific sums. Had complainant put any evidence before me“ that he 'had placed funds in accused’s hands shortly before the“ alleged misappropriation sufficient to meet the amount due on“ the bills, and that Charles had made a false entry and declined“ to account for the balance which he ought to have had when“ called on to do so, I might have been able to issue process. But“ the evidence seems to show that complainant left the business“ when started four years ago entirely in accused’s hands, and did“ not trouble to look into it until December last, and he has not“ shown that any specific sums were placed in accused’s hands or“ that he misappropriated them.”
Against this order the complainant appealed with the sanctionof the Attorney-General.
H. J. C. Pereira, for appellant.
16th October, 1900. Moncreiff, J.—
The appellant is the owner of a shop in Colombo which wasmanaged by his son-in-law Charles. He charged his manager inthe Police Court of Colombo with criminal misappropriation onthe 16th June, 1899, of the sum of Rs. 2,465.65. But the learnedMagistrate, on the strength of a judgment delivered by Withers, J.,in (Buchanan v. Conrad, 1 S. C. R. 335) refused to issue process.From that refusal an appeal was taken.
The appellant says that, when he bought goods from personsin England, the course of business was that the English merchantdraws bills against the goods; that the bills were presented by theNational Bank of India for his acceptance; that they were in duecourse paid by Charles, and that upon payment Charles debitedthe appellant with the amount in his books. He also says that hekept Charles in funds for the purpose of maintaining this courseof business.
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On the 16th June, 1899, Seneviratne, the clerk, with the know-ledge and no doubt under the direction of Charles, made an entryin the books debiting the appellant with Rs. 2,465.65. Themeaning of the entry was that Charles had met a bill for thatamount drawn by Showell & Co., of Birmingham, upon the appel-lant and paid the amount to the bank. He had in fact not paida cent of the money.
If this statement of facts be true, has Charles dishonestly mis-appropriated and converted to 'his own use (under section 386of the Penal Code) any money belonging to the appellant?
In the case cited Withers, J., felt himself bound to follow therule of the English Courts in cases of embezzlement as stated in
R.v.Hodgson(1828),3 C.&PA24,viz.(as stated by Vaughan,B). that“ if the prisoner regularly admits the receipt of money the mere“ fact of not paying it over is not a felony—it is but matter of“ account.” But it is clearly established that this rule does not applywhere the prisoner wilfulhj or fraudulently fails to account.* Theother rule of English jurisprudence relied upon is thus stated byAlderson, B. (8 C. £ P. 288): “ It is not sufficient to prove at the“ trial a general deficiency in accounts. Some specific sum must“ be found to have been stolen.” Now, in this case, the learnedjudge had before him (1) a general statement from the appellantthat he had supplied Charles with money, and (2) an admissionfrom Charles in his accounts that he had not accounted for thebalance in his hands. If that were all, I might agree with himthat there was no evidence of the misappropriation of a specificsum. But in fact Charles tells us by his books not only that he hasnot accounted for the balance of his account, but that he has takena sum of Rs. 2,465.65 due upon Showell & Co.’s bill. On the 16thJune, 1899, he tells h;s employer that, out of a sufficient balance inhis hands, he has paid a sum of Rs. 2,465.65 to the bank. Know-ing the statement to be untrue, he a'lows it to remain in falsificationof the accounts for six months. It is proved that he had not paid,and when he was asked for an explanation he simply walked outof the appellant’s shop and disappeared.
In my opinion the evidence, in so far as it is disclosed, showsthat Charles misappropriated a definite sum of money which hehimself admits he employed in meeting a certain bill; and that thecase is not one of a mere failure, but of a fraudulent failure toaccount. I therefore think that process should issue, and that thepetitioner’s appeal should be allowed.
October 8and 18.
* R. e. Jackson (1 C. A K. 384): R. e. Welch (2 C. A K. 296); see also Archbold21st ed.t p. 520, where it is stated that R. v. Jones (7 C. A P. 833) to thecontrary must be regarded as over-ruled.
FERNANDO v. CHABLES