[IN THE PRIVY COUNCIL.]

1932 Present : Lord Atkin, Lord Tomlin, and Lord Macmillan.

KING v. GODAMUNE.

Criminal misappropriation-Trust property-Payment of interest to trustee pending settlement of action to recover trust money-Appropriation of payment-Ownership of property misappropriated-Duty of Judge to decide on meaning and construction of documents-Misdirection- Nesessity for a full note of Judge's summing-Criminal Procedure Code, ss. 244 (I) and 355 (2) and (2).

The appellant and another were the trustees of the marriage settlement of Ensor Harris, the trust property consisting of a primary mortgage for Rs. 40,000 upon an estate called Belmont. The mortgage had been created in 1920 by one B as part of a transaction by which he had purchased the estate from Harris. Under the settlement Harris was the beneficiary entitled to the income of the trust property. On March 14, 1927, the interest on the mortgage was in arrear to the extent of Rs. 23,000, and the appellant and his co-trustee began an hypothecary action to enforce the mortgage.

The defendants to the action were B, and certain other persons ' called a Syndicate who were joined as defendants because they claimed an interest in the equity of redemption of Belmont through B, such claim being the subject matter of then pending litigation between B and themselves.

The Syndicate were anxious to obtain a postponement of the hypothecary action in order that they might have an opportunity of first clearing up the title as between themselves and B. Accordingly they approached appellant and after negotiation entered into an agreement with him, the terms of which were embodied in a letter addressed to the appellant by their proctor.

The material parts of the letter were as follows: -

"I understood from you that provided you were paid Rs. 10,000 on account accumulated interest, you would get the case to lay by for one year, and that during that period the balance interest should be paid from time to time as my clients were ' able. Further, you would undertake not to certify or record any payments made by my clients on account, should it become necessary for you to enforce writ for the recovery of the claim. If the amount realized by the sale of the property does not fetch the amount of the claim, then you could appropriate the money paid by my clients towards the deficiency ".

Four payments were made to the appellant in terms of the letter. On March 28, 1928, the day on which the second payment was made a decree was entered in the hypothecary action by consent in favour of the plaintiffs for the full amount of the principal sum of Rs. 40,000, and the arrears of interest, without taking into account the sums already paid by the Syndicate to the appellant under the agreement.

The appellant was charged with criminal misappropriation of two sums of money paid to him as interest alleged to be the property of Harris.

Held, that there was no evidence that the moneys were paid to the appellant as agent for Harris or that such moneys by reason of the payment to' the appellant became Harris' property.

Held, further, that it was the duty of the Judge to construe the letter and give the jury a direction in regard to its meaning.

In cases under section 355 (1) of the Criminal Procedure Code it is desirable that there should be available for the tribunal dealing with the reference a full note of the Judge's summing up.

APPEAL from a judgment of the Supreme Court.

November 10, 1932. Delivered by LORD TOMLIN.-

This is an appeal by special leave from a judgment and order of the Supreme Court of the Island of Ceylon delivered on March 3, 1931, whereby that Court by a majority answered adversely to the appellant a question of law reserved and referred for the decision of that Court by Lyall-Grant J. under section 355 (1) of the Criminal Procedure Code of Ceylon (Ordinance No. 15 of 1898) after the conviction and sent