Petrol Corp. v. Chartrand

California Court of Appeal Sep 19, 1949 No. Civ. No. 16809Published

Before: Wood

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Holding. The court held that the amended complaint sufficiently alleged a cause of action for the recovery of secret profits by an agent, as it could not be determined as a matter of law that the defendant was an independent contractor rather than an agent.

Issues

Whether the amended complaint stated facts sufficient to constitute a cause of action for the recovery of secret profits.
Whether the relationship between the parties was that of principal and agent as a matter of law.

Disposition. reversed

Quotations verified verbatim against the opinion

“It cannot be determined as a matter of law from the amended complaint that respondent was an independent contractor.”

“An agent “is not permitted to make any secret profit out of the subject of his agency.””

“[T]he principal’s right to recover does not depend upon any deceit of the agent, but is based upon the duties incident to the agency relationship and upon the fact that all profits resulting from that relationship belong to the principal.”

WOOD, J. Defendant objected to the introduction of any evidence upon the ground that the amended complaint did not state facts sufficient to constitute a cause of action. The objection was sustained, and judgment was entered in favor of defendant. Plaintiff appeals.

The amended complaint alleged that on January 15, 1945, plaintiff and defendant entered into a written contract which was as follows:

“ Chartrand’s Traffic Service

John W. Chartrand 2310 Sixth Avenue Tank-Car Rentals

Traffic Counsel Los Angeles 16 and Management

January 15,1945

The Petrol Corporation,

4020 Bandini Blvd.

Los Angeles 23, Calif.

Gentlemen:

This is to confirm our conversation today with Mr. Gollands in which you engaged our services to keep busy your leased [637]tank cars for ten percent (10%) of mileage credits earned by your cars under our direction. We shall undertake to manage and direct your cars so that:

(a) You shall have available suitable and sufficient cars as promptly as practicable after reasonable notice to protect your asphalt loadings.

(b) Your cars when not required for your own use shall be operated to obtain for you as much mileage credits as practicable.

We further shall undertake to:

(a) Maintain satisfactory cooperation and relations with O.D.T.

(b) Cover your empty movements with Bs/L and Release Notices.

(d) Report to owners promptly all movements of your cars, and

(e) Audit mileage credits and follow-up where necessary to see that you receive all credits earned.

To avoid unnecessary accounting we will render monthly invoice based on mileage credits as allowed by car owners. Thus, for January service we shall render invoice Feb. 28th, payable by March 10th.

Petrol Corp. v. Chartrand

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