Sunday, November 24, 2013

General Automotive Manufacturing Co. v. Singer case brief

General Automotive Manufacturing Co. v. Singer case brief summary
120 N.W.2d 659 (1963)


CASE SYNOPSIS
Defendant employee appealed a judgment from a trial court (Wisconsin), which found defendant had breached his contract of employment with plaintiff employer by engaging in business activities directly competitive with plaintiff.

CASE FACTS
Plaintiff employer hired defendant employee as general manager of its business and affairs and defendant accepted employment pursuant to a written contract. Plaintiff brought suit against defendant for breach of contract. The trial court found that defendant had breached his contract of employment with plaintiff because his sideline business was in direct competition with plaintiff. Defendant appealed.

DISCUSSION

  • The court modified the trial court's judgment, and as modified, affirmed it. 
  • The court held that by failing to disclose all the facts relating to certain orders and by receiving secret profits from the orders, defendant violated his fiduciary duty to act solely for the benefit of plaintiff. 
  • Therefore, defendant was liable for the amount of profits he earned in his sideline business. 
  • The court held that defendant's operations were in competition with plaintiff, and that he had received undisclosed personal profits. 
  • The court found that the amount of recovery by plaintiff was to be limited by plaintiff's stipulation. 
  • Therefore, the judgment was modified reducing the recovery allowed by the trial court.

CONCLUSION
The court modified the trial court's judgment by limiting plaintiff employer's recovery to the amount of plaintiff's stipulation and affirmed as modified. The court held that defendant employee violated his fiduciary duty to act solely for the benefit of plaintiff. Therefore, defendant was liable for the amount of profits he earned in his side line business.

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