Webb v. Com.

• Decision Date: 14 January 1963
• Docket Number: No. 5467,5467
• Citation: 129 S.E.2d 22,204 Va. 24
• Parties: CATHERINE WEBB v. COMMONWEALTH OF VIRGINIA. Record
• Court: Virginia Supreme Court

Page 22

129 S.E.2d 22

204 Va. 24

CATHERINE WEBB v. COMMONWEALTH OF VIRGINIA.

Record No. 5467.

Supreme Court of Appeals of Virginia

January 14, 1963.

William McL. Ferguson and Ralph T. Baker (Ferguson, Harvell & Young, on brief), for the plaintiff in error.

M. Harris Parker, Assistant Attorney General (Robert Y. Button, Attorney General, on brief), for the Commonwealth.

JUDGE: I'ANSON

I'ANSON, J., delivered the opinion of the court.

The defendant, Catherine Webb, was indicted on June 13, 1960, for embezzling and converting to her own use, during the period beginning January 1, 1952, and ending February 6, 1959, the sum of $18,030.93 of the funds of her employer, Bowen Company, Inc., trading as Bowen Company. In asking for a conviction the Commonwealth relied on § 18.1-109 n1 (formerly § 18-171) Code of 1950, 1960 Replacement Volume. Defendant pleaded not guilty, waived trial by jury, and was found guilty as charged in the indictment. Her punishment was fixed at three years in the State penitentiary, of which two years were suspended and she was sentenced to the penitentiary for a period of one year. From this judgment and sentence entered on September 18, 1961, we granted the defendant a writ of error.

The defendant principally contends that the trial court erred: (1) In denying her motion made before arraignment to quash the indictment on the grounds that the Commonwealth failed to grant her a preliminary hearing as required by § 19.1-163.1 , CODE OF 1950, 1960² Replacement Volume, and the constitutional guarantees of 'due process' and 'equal protection' of the laws under § 1 of the Fourteenth Amendment to the Constitution of the United States and § 8 of the Constitution of Virginia; (2) In denying her motion to strike the Commonwealth's evidence purporting to show an act or acts of embezzlement occurring more than six months prior to other alleged acts of embezzlement beginning on January 1, 1956, the admission of said evidence being in violation of § 19.1-168 of the Code of 1950, 1960 Replacement Volume; (3) In admitting certain opinion testimony; and (4) In finding her guilty on evidence which was insufficient to support the conviction.

Seven days were consumed in the trial of the case and the printed record is voluminous, covering 865 printed pages. It will serve no useful purpose to undertake to set out in this opinion all of the facts as disclosed by the Commonwealth's evidence. The defendant offered no evidence except that of good character.

The pertinent evidence shows that the defendant was employed in 1949 as a secretary in the office of W. C. Bowen, trading as W. C. Bowen Company, whose business was that of general insurance and real estate management. Several months after she was employed the firm's bookkeeper resigned her position on account of a shortage in her accounts, and the defendant was assigned the duty of keeping the books. She received such instruction as she had for this type of work from E. D. Whiteside, business consultant of the Bowen firm, and G. Keith McMurran, its vice president and general manager. It was a part of the defendant's duty to receive payments from the firm's insurance customers and tenants of rental property, but other employees of the firm performed the same duties. She prepared the duplicate bank deposit slips, but all the deposits were made by two other employees. Her other duties included the functions of casualty insurance secretary and rental manager.

One of the major insurance accounts of the firm was that of Citizen's Rapid Transit Company, referred to hereinafter and throughout the record as 'C.R.T.', of which W. C. Bowen was a director and treasurer.

A cash drawer was maintained in the office in one of the desks, which was occupied exclusively by another employee until July 1, 1958, when the defendant began sharing the desk to use the dictaphone machine. The drawer was not locked, and all of the employees in the office, averaging five or six in number, not only had access to the cash drawer, but in fact, with the approval of the management, used it for the purpose of making change and receiving payments from insurance customers and tenants of the properties managed by the firm. They also had the privilege of cashing their own personal checks and those of friends and customers of the firm and of borrowing from the cash drawer and inserting a voucher or 'I.O.U.' to cover the amount borrowed. A person renting space in the Bowen office also cashed his checks and those of his customers from the cash drawer.

There was a petty cash fund, originally in the amount of $50, later increased to $100, and subsequently reduced to $50, which was kept in the same cash drawer and co-mingled with the daily cash receipts. Disbursements were made from the cash drawer to pay incidental expenses incurred by the company, such as janitorial and other services. Each morning the petty cash fund was brought up to its established amount out of funds from the previous day's receipts, and to this extent some of the daily receipts never became available for deposit in the firm's bank accounts.

The system of books as set up by the business consultant, E. D. Whiteside, did not provide for any formal records of actual disbursements from the cash drawer, and there were no records capable of being audited by which it could be determined how much was paid out in cash from the drawer in the legitimate discharge of the firm's obligations over the period embraced by the indictment and the preceding years. Under this system no checks were written to petty cash to reimburse the cash account for the funds so disbursed, but checks were supposed to have been drawn on the Citizen's Marine Jefferson Bank for the amount of such disbursements and to have been deposited in the same account upon which they were drawn. Of course, this procedure would not have created any new funds in the bank account, but would have provided a record of the amount of the cash disbursements.

The firm's books were a handwritten, double-entry set of books consisting of subsidiary records, journals, ledgers, etc. Most of the entries in the books were in the handwriting of the defendant, but some were made by Whiteside, McMurran, and a young lady who was a part-time employee during the summer months.

The defendant, two other employees, and Bowen knew the combination to the firm's safe.

On the afternoon of February 5, 1959, Whiteside went to the office of Bowen Company to begin his procedure for closing the books for the year and to obtain information for the preparation of tax returns. He took a trial balance of the general ledger and found it to be in balance. The following morning, February 6, he proceeded to reconcile the subsidiary ledgers and the accounts receivable and payable, and found them to be in balance. His computation of the books disclosed that the sum of $3,953.89 should be on hand as of January 31, 1959, but he did not count the cash until the next morning, February 7, when it was found that only $258.59 was on hand. He then discovered that according to the books two deposits in the aggregate amount of $3,953.89 had been made on February 6, 1959. It had been the practice over a period of years to make the first deposit each month equal to the sum shown by the books to be on hand at the end of the previous month.

On Monday morning, February 9, Whiteside requested the defendant to turn over to him all the carbon copies of the deposit slips representing the deposits made since July 1, 1958. He chose that date because the McBee bookkeeping system was put into operation as of that time. The two slips showing the deposits made on February 6 were missing from the number handed to Whiteside and when the defendant's attention was called to it she turned them over to him. These two duplicate deposit slips showed that the deposits were in currency and coin in the total amount of $3,953.89, of which $3,384.25 was deposited to the firm's account in the Citizen's Marine Jefferson Bank and $569.64 in its account at the First National Bank of Newport News.

Whiteside then checked the original deposit slip at the Citizen's Marine Jefferson Bank and found that of the $3,384.25 deposited, $86.89 was in currency and coin and the balance was represented by five checks. The original deposit slip at the First National Bank showed that $11.03 was in currency and coin and five checks had been deposited.

Upon being questioned by Whiteside as to why the duplicate deposit slips of February 6 showed all cash, the defendant stated that she had made up the deposits in a hurry and planned to call the bank to get a detailed list. She later furnished him two typewritten deposit slips showing the cash and checks which were deposited.

Only two of the checks listed on the typewritten deposit slips were recorded on the Bowen Company books. One was in the amount of $794.44 and the other for $140.17. Another check, listed on the typewritten deposit slip in the amount of $145.83, and not recorded on the books, had been stamped for deposit only and had been cashed at the bank, of which $86.89 had been deposited and $58.94 had been returned to the office by the employee making the deposit.

When these matters were called to McMurran's attention he requested the defendant to cooperate with Whiteside to help 'unravel the problem.' He told her, however, that her services would have to be terminated within a reasonable time regardless of whether there was a shortage or inefficient bookkeeping because he had put up with her inefficiency for the past two years.

Robert L. Freeman, a certified public accountant, was engaged in February 1960, a year after the defendant's separation from the firm, to make a limited audit of its accounts. He testified that he checked some totals of the 1952 cash account and made a cash audit of the books for the years 1956, 1957, 1958, and for the period from January 1 through February 6 of 1959. The...