Opinion ID: 2380108
Heading Depth: 1
Heading Rank: 1

Heading: Huffman's Conduct

Text: Huffman first worked in the insurance field during the summer of 1956, when he entered the employment of W. L. Bridges, Jr. Since Huffman was then going to college, this job was only for the summer. In 1958, Huffman graduated, and he approached Bridges about permanent employment. Bridges hired him. Bridges controlled or operated an extensive network of business enterprises. His holdings included several banks, more than a dozen insurance companies, a land company, a mortgage company, and several other businesses. Most of these companies were operated out of the same office in Dallas, Texas. When Huffman went to work for Bridges, it was not in connection with any one company; rather it was for the Bridges enterprises in general. Huffman's function in the office was to do whatever Bridges asked him to do. This meant that at different times he was working on different companies that Bridges was operating. However, most of Huffman's time was spent with the business of Southern Industrial Life Company. Huffman's testimony indicates how he spent his time, and of what his work consisted. On a typical day, he began work by giving the money that had come in the preceding day as premiums on insurance policies to one of the office girls to process. He would take the money out of the safe in the office, where it was kept overnight. Huffman had the combination to the safe. The processing by the office girl consisted of preparing it for deposit in the bank. A deposit slip would be prepared and presented to Huffman for him to make sure it was accurate. Then it was forwarded to Miss Bishop, actuary and accountant for the company, and Huffman's contact with it was finished. After starting the office girl on the processing of the premium money, Huffman spent almost all of his remaining time on the underwriting and issuing of insurance policies. He worked primarily on the company's group insurance. He would do all of the work to prepare the policy for issuance. For example, if a medical question arose, it was Huffman's responsibility to deal with it. When all of the preparatory work on a policy was completed, he would give the work sheet to a secretary who would prepare the policy and return it to him to check. Huffman also did the work to prepare claims for payment. Just as with the premium income, a claim that came into the office was turned over to one of the office girls to process. After it was prepared, it would be returned to Huffman whose task it was to make certain the claim was a proper one and that the forms were in proper order. If they were, Huffman would then give the check for payment to Miss Bishop for mailing. Approximately 95% of Huffman's time was spent on the above, the issuing of new policies, the supervising of the depositing of the premium income, and the verification of the insurance claims. The remainder of his time was spent on bookkeeping. Huffman did not spend time every day on the bookkeeping. He testified that, depending on the amount of insurance work he had to do, he would do the bookkeeping once a week, or sometimes only once a month. It was his job to do the posting to the company's books. The balance of my time would be spent doing bookkeeping work, posting checks or check stubs to the disbursement journal, posting income to the income journal, and posting the income and disbursement journals to the general ledger. There was no discretion or decision-making involved in this bookkeeping work. It was simply a matter of recording on the company books the transactions the company had engaged in. The information and figures to be placed in the books were taken from check stubs or canceled checks. Huffman's work continued without any significant variation until February, 1959. At that time, Huffman was named to the position of Secretary-Treasurer of two of Bridges' insurance companies, Southern Industrial Life Insurance Company and Rains Service Insurance Company. Huffman continued to perform all of his old tasks; but with his new title, there was one additional job to do. As Secretary-Treasurer, he had the authority to sign company checks and the normal business papers of the company. Just as when he first came to work, the decision that he was to be Secretary-Treasurer was actually Bridges'. Bridges simply stated to Huffman that he was going to be the Secretary-Treasurer: Q. Did you occupy a position with them? A. I was shown as secretary-treasurer on each of these companies.    Q. Were you also the bonded officer, the principal bonded officer of those two companies? A. So I now understand.    Q. How did it come about that you suddenly became Secretary-treasurer of Southern Industrial Life Insurance Company? Was that discussed with you beforehand? A. No, sir; I can't recall the specific instance, other than he [Bridges] just told me that he was making me secretary-treasurer of Southern Industrial Life Insurance Company. Q. I see. Did you give him your agreement that you would serve as secretary-treasurer of Southern Industrial? A. He was my boss, Mr. Taylor; it was a statement. Q. Well, you didn't disagree. A. I didn't protest. The additional tasks did not take up a great deal of his time. Once or twice a week, Bridges would walk in and hand him some papers to sign, and would stand there while Huffman signed them. Sometimes Bridges would leave a stack of business papers on Huffman's desk for him to sign. There would also be checks for him to sign. Huffman testified that he rarely, if ever, read the documents he was signing. Many of them were legal papers, and he said he had no reason to read them. Also, if Bridges was waiting for his signature, he could not stop and read the documents. When signing checks, as well as the business papers, Huffman rarely knew the purpose for which they were being used. Most of the time he signed the checks in blank. When the disbursement was to pay a bill, on occasion he would have the bill in front of him at the time he signed the check. For other checks, such as those used for investments, he frequently did not have any knowledge of where the check was going. He never made an attempt to see if there were actually papers to support the money being paid out. Thus the manner of operating these various businesses was to have the checks signed before they went to the desk of the person who filled in the payee and the amount being paid. In the normal course of business, Huffman signed several hundred checks in blank. In this context, Huffman was asked to sign in blank some extra checks and leave them in the checkbook. Huffman testified that the request was made by either Miss Bishop or Bridges who explained that occasionally checks were needed when they worked at night or on weekends when Huffman was not in the office. It was with nine of the checks signed in blank in advance that the missing money was abstracted.