Kaynar Manufacturing Co. v. Superior Court

NOURSE (Paul), J. pro tem.* Petitioner seeks a writ of prohibition to prevent the respondent court from enforcing an order compelling it to produce for inspection certain of its books and records.

The pertinent facts as disclosed by the petition are:

Petitioner entered into a contract with one Nason (real party in interest here) under which Nason was employed to perform certain services for petitioner. The term of contract was four years, commencing on the 13th of January, 1955. By the terms of the contract Nason was to be paid a stated salary per month and, at the end of each year, a sum equal to one-half of 1 per cent of petitioner’s annual net sales during the preceding year which were in excess of petitioner’s net sales for the year 1954, or in excess of the sum of $1,000,000, whichever should be the lesser figure, upon condition that he “well, truly, and competently performs his duties and obligations” under the contract.

At the end of the ninth month of his employment Nason was discharged, and thereafter commenced the action against petitioner in which the order in question was made.

In his complaint, Nason alleged that he was discharged without just or legal cause. He sought by way of damages not only his loss of stated salary for the remainder of the term, but a sum based upon his share of the prospective net sales.

Petitioner’s answer admitted the contract of employment and the discharge of Nason, but denied that he had been [549]wrongfully discharged and alleged that he had been discharged because of a breach by him of the obligations of the contract on his part to be performed. It further denied all allegations of the complaint as to damages.

Thus the only issues of fact formed by the pleadings were: Was the plaintiff wrongfully discharged; and, if so, in what sum was he damaged?

In February of 1956 Nason moved the trial court for an order compelling petitioner to permit him to examine and take copies of certain accounts from petitioner’s general ledger and its sales journal and “any other accounts which defendant contends should be deducted from ‘gross sales’ to determine the correct amount of ‘net sales.’ ’’ Nason based his motion upon his complaint, and upon his affidavit which stated the relevant terms of the contract of employment including the definition of net sales as set forth in that contract, specified the accounts and records which he desired to examine, and alleged that they were material to the issue of damages.