Ruth a cat, dog or any pet for that matter is classed as personal property therefore this could be classed as theft. The added bonus is that a pet is a seperate entity in its own right; meaning, you are not liable for his/her actions. Not very comforting but it does mean that even if the person who claims to have buried said cat (a name would be helpful to save me calling him 'cat, said cat etc') claimed that your daughters pet had caused grief upon them you would at no point be liable. This sounds very complex although it is something that this person could try and come at you with should this go as far as the police. For example if your daughters cat decided to deficate on your neighbours lawn, he/she could not hold you responsible for said act.
I hope this doesn't seem too mind boggling for you and I hope you get your/your daughters cat back (I for one don't believe this person has buried him).
Dizmo,
P.S contact the police and explain the situation, the worse that can happen is they tell you that they can't pursue it, goodluck!