NOTICE: The opinions posted here are subject to formal
revision. If you find a typographical error or other formal error, please notify
the Virginia Court of Appeals.
COURT OF APPEALS OF VIRGINIA
Present: Judges Benton, Annunziata and Senior Judge Coleman
Argued at Richmond, Virginia
Record No. 3191-01-2
COMMONWEALTH OF VIRGINIA
OPINION BY JUDGE ROSEMARIE ANNUNZIATA
OCTOBER 7, 2003
FROM THE CIRCUIT COURT OF NOTTOWAY COUNTY
Thomas V. Warren, Judge
James P. Baber for appellant.
Eugene Murphy, Assistant Attorney General (Jerry W.
Kilgore, Attorney General, on brief), for appellee.
On August 21, 2001, Vernon Dove was convicted of embezzlement in
a bench trial in the
Circuit Court of Nottoway County. He was sentenced to five years
in prison, with all but 90
days suspended. Dove contends on appeal that the evidence is
insufficient to support the
embezzlement conviction on the ground that the evidence fails to
prove that he intended to
defraud and to deprive Jenkins of the proceeds from the gasoline
sales. For the reasons that
follow, we reverse the conviction and dismiss the indictment.
"On appeal, ‘we review the evidence in the light most
favorable to the Commonwealth,
granting to it all reasonable inferences fairly deducible
therefrom.’" Archer v. Commonwealth,
26 Va. App. 1, 11, 492 S.E.2d 826, 831 (1997) (citation
So viewed, the evidence establishes that Dove entered into a
written lease and
commission agreement in July 1997 with Roy Clifton Jenkins, Jr.,
an oil and gas distributor and
president of Roy C. Jenkins, Inc. According to Jenkins’s
testimony, pursuant to the agreement,
Dove leased a service station owned by Jenkins’s company and
operated it under the name
"Burkeville Exxon Station." Jenkins provided the
gasoline for Dove to sell. An employee from
Roy C. Jenkins, Inc. determined how much gas Dove sold each week
by reading the meters on
the gas tanks. Dove was obligated to remit proceeds to Jenkins
for every gallon of gas he sold.
The parties’ written agreement was not entered into evidence.
However, Jenkins and
Dove each acknowledged that the gasoline belonged to Jenkins and
that Dove was obligated to
remit all the proceeds from the gasoline sales to Jenkins.
Jenkins testified: "I believe Mr. Dove
was supposed to submit it at least three times a week. Possibly,
he was asked later to do it daily,
I’m not sure. At least three times a week." Jenkins was to
pay Dove a monthly commission from
the total proceeds remitted to him. Dove does not dispute that
Jenkins owned the gasoline and
that he was to remit to Jenkins the proceeds of its sale.
Throughout the term of the lease agreement, Dove deposited the
money received from the
sale of gasoline, together with the other service station
receipts, into his personal bank account.
From the account, Dove paid a salary to himself and to his
employees, as well as his business
and personal bills. The record is silent as to whether the
agreement specified how Dove was to
maintain the proceeds from gasoline sales. The record is also
silent as to whether Jenkins was
aware of how Dove maintained the service station account or that
Dove was paying himself and
his bills from the proceeds which were deposited to his personal
account. According to Jenkins,
the agreement contained no provision requiring that the proceeds
be segregated from the other
service station receipts.
Over a six-week period, from approximately mid-May 2000 through
the end of June
2000, Dove failed to pay Jenkins the proceeds he collected from
gasoline sales. Near the end of
June 2000, Jenkins determined that Dove owed him approximately
$10,200 and he locked the
pumps at the station and prohibited Dove from selling gasoline.
During the six-week period that
Dove failed to pay Jenkins, Dove "had been promising to
turn in receipts." Jenkins also testified
that "it wasn’t the first time" he had to lock the
pumps because Dove failed "off and on" to timely
remit the proceeds to him.
From June 2000, when Jenkins locked the pumps, and continuing
until sometime in
August 2000, Dove remitted several payments in cash and by
credit card to reduce the balance
owed to approximately $1,100. However, after Jenkins determined
that approximately $2,200 of
the amount Dove remitted had been charged to an invalid credit
card and could not be applied
against the debt, Jenkins obtained a criminal warrant charging
Dove with embezzlement.
At trial, Dove testified that he was a mechanic who had never
operated a service station
before entering into the lease agreement with Jenkins. He
testified that he accepted checks for
his services as a mechanic and for the sale of gasoline. He also
testified that many of the checks
he received were returned for insufficient funds, including one
exhibited at trial for $1,875 from
a logging business that had closed.
Dove was convicted of embezzlement and sentenced to five years
in prison, with all but
90 days suspended. Dove appeals the conviction.
On appeal, Dove argues the evidence is insufficient to support
conviction on the ground that it fails to prove that he intended
to defraud and to deprive Jenkins
of the proceeds from the gasoline sales.
We agree and reverse the conviction.
Code ? 18.2-111, the statute proscribing embezzlement,
provides, in part:
If any person wrongfully and fraudulently use, dispose of,
or embezzle any money, bill, note, check, order, draft, bond,
receipt, bill of lading or any other personal property, tangible
intangible, which he shall have received for another or for his
employer, principal or bailor, or by virtue of his office,
employment, or which shall have been entrusted or delivered to
him by another or by any court, corporation or company, he shall
be guilty of embezzlement.
To establish the statutory elements of embezzlement, the
Commonwealth must prove that
the accused "wrongfully appropriated to [his] use or
benefit, with the intent to deprive the owner
thereof, the property entrusted to [him] by virtue of [his] employment or office." Nestle v.
Commonwealth, 22 Va. App. 336, 341, 470 S.E.2d 133, 136 (1996)
(citing Waymack v.
Commonwealth, 4 Va. App. 547, 549, 358 S.E.2d 765, 766 (1987)).
A defendant wrongfully
appropriates, or converts, the property of another when he
exercises "’unauthorized and wrongful
. . . dominion and control over [it], to the exclusion of or
inconsistent with [the] rights of the
owner.’" Id. (quoting Black’s Law Dictionary 300 (5th ed.
1979)). However, "[p]roof of the
misappropriation of property entrusted to the possession of the
accused is insufficient, standing
alone, to prove that the accused was the embezzler."
Zoretic v. Commonwealth, 13 Va. App.
241, 245, 409 S.E.2d 832, 834 (1991); see also Smith v.
Commonwealth, 222 Va. 646, 651, 283
S.E.2d 209, 211 (1981).
"The mere failure to return property or account for a trust
while evidence of a conversion, does not necessarily constitute
embezzlement, but failure to perform an absolute duty to return
property or refusal to account or pay over on demand constitutes
embezzlement, or is, at least, evidence from which a fraudulent
conversion may be inferred."
Stegall v. Commonwealth, 208 Va. 719, 722, 160 S.E.2d 566, 567
(1968) (quoting 29A C.J.S.
Embezzlement ? 11, at 27, 28) (emphasis omitted).
To constitute embezzlement, fraudulent intent to deprive the
owner of his property must
be proved beyond a reasonable doubt. Wadley v. Commonwealth, 98
Va. 803, 807, 35 S.E. 452,
455 (1900). Proof of intent inheres in the words or conduct of
the accused. Bell v.
Commonwealth, 11 Va. App. 530, 533, 399 S.E.2d 450, 452 (1991).
Intent must often be proved
by circumstantial evidence. Wilson v. Commonwealth, 249 Va. 95,
101, 452 S.E.2d 669, 673-74
(1995) ("Intent is a state of mind that may be proved by an
accused’s acts or by his statements
and that may be shown by circumstantial evidence.").
"Circumstantial evidence is as competent and is entitled to
as much weight as direct
evidence, provided it is sufficiently convincing." Stamper
v. Commonwealth, 220 Va. 260, 272,
257 S.E.2d 808, 817 (1979). However, proof by circumstantial
evidence "is not sufficient . . . if
it engenders only a suspicion or even a probability of guilt.
Conviction cannot rest upon
conjecture." Littlejohn v. Commonwealth, 24 Va. App. 401,
414, 482 S.E.2d 853, 859 (1997)
(citing Hyde v. Commonwealth, 217 Va. 950, 955, 234 S.E.2d 74,
78 (1977)). "Circumstantial
evidence may establish the elements of a crime, provided it
excludes every reasonable hypothesis
of innocence." Welshman v. Commonwealth, 28 Va. App. 20,
36, 502 S.E.2d 122, 130 (1998)
(en banc). "The Commonwealth is only required to exclude
hypotheses of innocence that flow
from the evidence." Fordham v. Commonwealth, 13 Va. App.
235, 239, 409 S.E.2d 829, 831
(1991). The statement that circumstantial evidence must exclude
every reasonable theory of
innocence is simply another way of stating that the Commonwealth
has the burden of proof
beyond a reasonable doubt. Kelly v. Commonwealth, 41 Va. App.
250, 258, 584 S.E.2d 444,
447 (2003) (en banc); see also Cox v. Commonwealth, 140 Va. 513,
517, 125 S.E. 139, 141
Applying these principles to the case at bar, the evidence fails
to prove beyond a
reasonable doubt that Dove embezzled the gasoline or the
proceeds of the gasoline sales. Jenkins
and Dove entered into a lease and commission agreement whereby
Dove leased and operated a
service station from Jenkins and sold Jenkins’s gasoline. The
gasoline was Jenkins’s property.
Dove acknowledged that the agreement required him to remit the
funds from the gasoline sales to
Jenkins on a thrice-weekly basis. The evidence is also
undisputed that Dove failed to remit all the
proceeds from the gasoline sales to Jenkins and that Dove
deposited the monies he received from
the gasoline sales, along with other receipts, into the bank
account from which he paid business and
While this evidence establishes that Dove used, for his own
purposes, money owed to
Jenkins by virtue of their business dealings, standing alone, it
is not sufficient to sustain a conviction
for embezzlement. Compare Stegall, 208 Va. at 722, 160 S.E.2d at
567; Smith, 222 Va. at 652,
283 S.E.2d at 211. The Commonwealth failed to prove that the
money Dove received from the
gasoline sales was Jenkins’s property. Compare Chiang v.
Commonwealth, 6 Va. App. 13, 17,
365 S.E.2d 778, 780 (1988) (To sustain a conviction for
embezzlement, "the Commonwealth
must prove that the defendant was entrusted with the
property of another." (citing Webb v.
Commonwealth, 204 Va. 24, 34, 129 S.E.2d 22, 30 (1963))). The
evidence only shows that
Dove owed Jenkins the money and was required to remit it to him
on a regular basis. A
debtor-creditor relationship is an insufficient basis upon which
to premise an embezzlement
charge and conviction.
Moreover, and consistent with the circumstances that establish a
relationship, fraudulent intent was not established beyond a
reasonable doubt by the
Commonwealth’s evidence. Although the evidence proved Dove’s
failure to pay Jenkins the money
he was owed from the sale of the gasoline, other evidence in the
case supports the reasonable
hypothesis that Dove’s conduct was not criminal. The
Commonwealth failed to exclude the
reasonable hypothesis of innocence that flows from this
First, Dove never concealed or attempted to conceal the total
amount of proceeds he
collected and owed. He did not deny the debt or refuse to pay
it. Indeed, he readily acknowledged
the full amount he owed Jenkins under their agreement and he
made payments to satisfy his
obligation until he was arrested. See, e.g., Zoretic, 13 Va.
App. at 244, 409 S.E.2d at 834
(reversing embezzlement conviction where, inter alia,
defendant repeatedly acknowledged the debt
and said he would repay when possible and the Commonwealth
presented no evidence that the
defendant attempted to conceal his acts); compare Smith, 222 Va.
at 652, 283 S.E.2d at 211
(affirming embezzlement conviction based, in part, on evidence
that defendant’s "conduct was
designed to conceal his criminal purpose").
Second, the Commonwealth’s evidence fails to prove Dove acted
with fraudulent intent by
depositing the gasoline sales proceeds into his personal account
into which all business proceeds
were deposited and all business and personal expenses were paid.
The proceeds were not required
by the agreement to be segregated or maintained in a separate
account for Jenkins.
Third, while the intent to defraud arguably may be inferred from
the delayed and failed
effort to make full and timely remittance, Stegall, 208 Va. at
722, 160 S.E.2d at 567; see also Bell,
11 Va. App. at 533, 399 S.E.2d at 452, the trial judge found as
a matter of fact that Dove was
unable to pay Jenkins the proceeds from the gasoline sales
because several customers had failed
to pay Dove for their purchases; Dove’s bookkeeping practices
were characterized as poor. The
trial judge stated:
I agree you made a series of bad decisions . . . . I think that
were a poor bookkeeper . . . . It doesn’t make any difference
whether you sell on credit, whether you take checks in, insofar
Mr. Jenkins is concerned. That’s your part of the business. If
want to take checks for that gas, you’re responsible for
them. That’s not Mr. Jenkins’s problem. If you want to extend
credit to people that don’t pay you for his gas when you pump
that’s your problem. You’ve got to pay him . . . for every
gas that is pumped out of his tanks.
Summarily stated, the trial judge found Dove engaged in poor
business practices, which
left him short of funds to pay Jenkins. However, poor business
judgment and practices fall far
short of the requisite finding that Dove acted with fraudulent
intent. The principle is well
established that a person may not be imprisoned, absent fraud,
for mere failure to pay a debt
arising from a contract. See Overstreet v. Commonwealth, 193 Va.
104, 111, 67 S.E.2d 875, 879
(1951). In short, on these facts, because the Commonwealth’s
evidence failed to exclude the
reasonable hypothesis of innocence that Dove acted without
fraudulent intent, we hold, as a
matter of law, that no rational trier of fact could find him
guilty beyond a reasonable doubt. See
Hudson v. Commonwealth, 265 Va. 505, 513, 578 S.E.2d 781, 785
We find that the Commonwealth’s evidence proved only that Dove
owed Jenkins the
proceeds he collected from the gasoline sales, not that he
embezzled the funds. The
Commonwealth failed to prove that Dove acted with fraudulent
intent when he used proceeds
from the gasoline sales for personal expenditures. Thus, the
Commonwealth’s evidence did not
exclude a theory of innocence that can reasonably be
hypothesized from the evidence presented.
See Dowden v. Commonwealth, 260 Va. 459, 468, 536 S.E.2d 437,
441 (2000). The evidence
shows that neither Dove’s acts, nor his motives, were consistent
with guilt. Cf. Johnson v.
Commonwealth, 152 Va. 973, 979, 146 S.E. 260, 262 (1929)
(stating that "when the time, place,
means, opportunity, motive and conduct of the accused all concur
in pointing out his guilt," the
defendant should be found guilty); Mullis v. Commonwealth, 3 Va.
App. 564, 576, 351 S.E.2d
919, 927 (1987) (affirming conviction of defendant where
circumstances of time, place, means,
motive, and conduct "concurred to support the jury’s
finding of guilt"). We reverse Dove’s
conviction for embezzlement and dismiss the indictment.
Reversed and dismissed.
Commonwealth contends that Dove’s argument is barred on appeal by Rule 5A:18
because he only argued to the trial court that "general
criminal intent" was not proved and cannot
now argue a new theory on appeal. We find the argument without
merit. Through argument and
examination of witnesses, Dove made clear to the trial court
that his defense was, in part, that he
did not have the requisite criminal intent to sustain a
conviction for embezzlement. We find the
argument before the trial court adequately encompasses the claim
Dove now makes on appeal,
namely, that he lacked the intent to deprive Jenkins of the