Rohrig v. Whiteman Manufacturing Co.

BURKE, P. J.

Plaintiff sued defendants for moneys due for services rendered and labor and material furnished in the modification of an airplane.

Defendants complain that plaintiff should be .denied recovery because, as an employee, he did not disclose to defendants that during the performance of the work he formed an independent company under the name of “ Aerexco” to which he farmed out certain of the work, thereby making secret profits unknown to defendants. Defendants contend such conduct constituted fraud upon them vitiating all agreements between the parties. Defendants deny any liability to plaintiff and by cross-complaint pray for rescission of the purported agreements which were evidenced in the form of purchase orders executed by defendants. Because of his fraudulent activity, defendants also seek to impress a trust with respect to all moneys previously paid to plaintiff, punitive damages, and lastly, recovery of all wages paid to plaintiff as an employee.

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Defendants undertook to modify a military surplus B-26 airplane. They hired Frank Berry, doing business as Rhodes-Berry Company, to serve as design engineer for the modification. Bart Falk was an employee of Rhodes-Berry Company. Berry had complete charge of the project, including the hiring and firing of personnel. Plaintiff was hired by Berry although his salary was paid by defendants. The Whitemans, father and son, were the president and vice president of defendant companies. Neither ever discussed plaintiff’s employment nor gave him any instructions as to his duties. Part of plaintiff’s duties was to supervise the crew reconditioning the aircraft. He made out requisitions for parts and materials, specifying the vendor, and delivered these to defendants’ purchasing agent who issued purchase orders thereon.

In October 1959 plaintiff commenced a business of his own, filing a certificate of fictitious name therefor showing himself as the owner. The company was called “Aerexco.” Plaintiff routed several jobs to this company by way of writing requisitions therefor for which purchase orders were issued by defendants covering numerous parts for the airplane and requiring the performance of particular portions of the work done, such as installation of an electrical system and construction of a cabin door and nose wheel bracket assembly. Defendants paid for some of the work and this action is brought to collect the balance of moneys due.