banker Mr. Calvin Shabazz.

The Hon. Mr. Justice Kempster said the Bank of Bermuda did not tell Mr.

Shabazz what to do with a $310,000 loan he received in 1988, and therefore the former senior bank officer could not be guilty of theft.

When the case was heard in Supreme Court last year, Puisne Judge the Hon. Mr.

Justice Ground should have told the jury to find Mr. Shabazz not guilty, the Appeals Court judge said.

A jury convicted Mr. Shabazz, 45, of stealing $121,000 from the Bank of Bermuda on March 29. He was later sentenced to 240 hours of community service.

But the three-member Appeals Court panel quashed the conviction.

Normally, a loan became the property of the borrower and could not be construed as theft, Mr. Justice Kempster said.

But if a loan was received with direction that all or part of the money should be applied to a specific purpose, the monies were deemed to be the property of the lender until the direction was complied with, he said.

Mr. Shabazz was "a trusted officer'' of the bank who was accustomed to receiving unsecured loans and overdrafts on demand, Mr. Justice Kempster said.

On July 26, 1988, Mr. Shabazz agreed with the bank to borrow $310,000 to pay off overdrafts and another bank loan, upgrade his property, and discharge his $141,000 mortgage to L.P. Gutteridge Ltd., he said.

He would recover the title deeds to his property and turn them over to the bank as loan security.

Mr. Shabazz was aware the bank expected him to discharge the loan and deposit the deeds and the bank "had made the loan on that understanding,'' the judge said.

Mr. Shabazz made more overdrafts before the loan was made, and he applied $20,000 of the cash he received to his L.P. Gutteridge debt.

By the time the bank loan was transferred to him on August 1, his overdraft had increased to the point that "he could not pay the $121,000 he still owed L.P. Gutteridge.'' What money was available he spent in other ways.

The bank, "who had so little, or no concern for their shareholders' interests,'' looked to him for the money in vain, Mr. Justice Kempster said.

"Did the appellant receive his August 1 loan with a direction'' as to how to spend $121,000? Mr. Justice Ground held that "a direction can arise by implication.'' But while the bank had an expectation of how the money would be used, "expectations standing alone are not direction,'' Mr. Justice Kempster said.

The expectations did not arise from any direction the bank had given Mr.

Shabazz on or before August 1, he said.

"Whatever can be said about the appellant's behaviour, the appeal must be allowed and his conviction for theft quashed.'' Mr. Shabazz was represented by lawyer Mr. Archie Warner.