Defendant former co-joint adventurer appealed from a judgment of the Superior Court of the City and County of San Francisco (California) which awarded damages to plaintiff joint adventurer for breach of the contract of joint adventure. Former co-joint adventurer claimed he did nothing wrong to breach the contract, but, if he did, that the award should go to the parties’ former corporation, not to plaintiff joint adventurer individually.

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Overview

The court found that this was not an action for the breach of a contract between the parties, but for damages for fraudulently inducing wine producers to terminate their contracts with the parties’ company, to the detriment of plaintiff joint adventurer personally. Such conduct was a tort for which joint adventurer was entitled to recover against his co-joint adventurer because each occupied a fiduciary relation to the other which forbade the taking by either of an unfair advantage over the other. The court held that the fact that the agency contracts were revocable did not affect the right of recovery and that it was proper for the trial court to determine the value of the contractual rights, including the amount of future returns reasonably to be expected from their exercise. The court also held that the parties, individually, were the only real persons having an actual interest in the business, regardless of whether it was of a corporate nature or arising from a partnership or co-adventure. Therefore, the court affirmed the judgment in favor of plaintiff joint adventurer individually, not in favor of the parties’ jointly owned corporation.

Outcome

The court affirmed the judgment in favor of plaintiff joint adventurer individually and affirmed the judgment that the parties’ corporation take nothing by its cross-complaint.