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DOVE v. COMMONWEALTH




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DOVE

v.

COMMONWEALTH


COURT OF APPEALS OF VIRGINIA

Present: Judges Benton, Annunziata and Senior Judge Coleman

Argued at Richmond, Virginia

Record No. 3191-01-2

VERNON DOVE

v.

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.

Facts

"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
omitted).

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.

Analysis

On appeal, Dove argues the evidence is insufficient to support
the embezzlement

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.[1]
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,
conceal

or embezzle any money, bill, note, check, order, draft, bond,

receipt, bill of lading or any other personal property, tangible
or

intangible, which he shall have received for another or for his

employer, principal or bailor, or by virtue of his office,
trust, or

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
fund,

while evidence of a conversion, does not necessarily constitute

embezzlement, but failure to perform an absolute duty to return
the

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

(1924).

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

personal expenses.

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
debtor-creditor

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
evidence.

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
you

were a poor bookkeeper . . . . It doesn’t make any difference

whether you sell on credit, whether you take checks in, insofar
as

Mr. Jenkins is concerned. That’s your part of the business. If
you

want to take checks for that gas, you’re responsible for
collecting

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
it,

that’s your problem. You’ve got to pay him . . . for every
gallon of

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
(2003).

Conclusion

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.

 

FOOTNOTES:

[1]The
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
sales proceeds.

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