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proprietorship, under the name “Monterey Glass and Mirror
Distributors” (Monterey). Joseph (Monterey, when referring to
the business) had a shop and employed two or three secretaries
and two drivers.
Joseph was familiar with all aspects of Monterey’s business.
Deliveries to customers were made from Monterey’s shop, and, when
Monterey’s drivers returned to the shop, Joseph reviewed all sale
documents and received any checks collected by the drivers.
Joseph opened Monterey’s mail and removed any checks. He
examined all invoices from vendors and the checks drawn to pay
such invoices.
Bookkeeping
During the years in issue, a central feature of Monterey’s
system of bookkeeping was a financial register, referred to by
the parties as the “peg board ledger system” (the peg board).
The peg board consists of sheets of paper, on one side of which
is a check register (the check register) and on the other side of
which are columns to keep a running bank balance, showing checks
drawn, deposits made, and the resulting balance. The check
register consists of numerous columns. The first 5 columns have
preprinted headings, as follows: “REMARKS”, “PAID TO”, “DATE”,
“CHECK NO.”, and “AMOUNT OF CHECK”. Blank checks overlay the
first 5 columns, and, as the check is written, carbon is
deposited onto a line of the ledger and records the information
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Last modified: May 25, 2011