Wilshire Oil Company of Texas v. Riffe
| Decision Date | 17 March 1969 |
| Docket Number | No. 10049.,10049. |
| Citation | 406 F.2d 1061 |
| Parties | WILSHIRE OIL COMPANY OF TEXAS, a corporation, Appellant, v. L. E. RIFFE, Appellee. |
| Court | U.S. Court of Appeals — Tenth Circuit |
Richard H. Shaw, Denver, Colo. (Leland E. Modesitt, of Modesitt & Shaw, Denver, Colo., and Robert J. Woolsey, of Farmer, Woolsey, Flippo & Bailey, Tulsa, Okl., of counsel, with him on the brief), for appellant.
David M. Thornton, Tulsa, Okl. (Thornton, Stamper & Dalton, and Gerald
G. Stamper, Tulsa, Okl., with him on the brief), for appellee.
Before PHILLIPS, HILL, and SETH, Circuit Judges.
This is an appeal by the plaintiff-appellant from a portion of the judgment of the trial court in this action which was commenced by the plaintiff corporation against one of its former corporate officers. The suit was to recover profits made by the corporate officer by participating in competitive enterprises, in receiving personally commissions for corporate construction work, and to recover the compensation paid to the officer by the corporation during the period he was interested in a competitive corporation.
This is the second appeal. This court on the first appeal reversed and remanded the case, holding that the defendant had breached his duty to the corporation and had engaged in activities contrary to the terms of his contract of employment (Wilshire Oil Co. of Texas v. Riffe, 381 F.2d 646). On remand the trial court entered judgment on the claims for recovery of the profits made through participating in a competitive corporation, but denied the corporation recovery of the compensation it paid to the defendant for this period.
The nature and extent of the fiduciary duties owed by a corporate officer to the corporation he serves have been long established. This matter was considered at some length in the previous opinion in this case as it related to these facts and need not be repeated here. As stated in the first opinion the acts of the appellee also constituted a breach of his contract of employment. On the prior appeal all the basic and determinative issues were thus decided.
When a corporate officer engages in activities which constitute a breach of his duty of loyalty, or if it is a wilful breach of his contract of employment, he is not entitled to compensation for services during such a period of time although part of his services may have been properly performed. In the Restatement (Second), Agency § 469 the above doctrine is set forth, and this is followed by the comment which states in part:
"An agent, who, without the acquiescence of his principal, acts for his own benefit or for the benefit of another in antagonism to or in competition with the principal in a transaction is not entitled to compensation which otherwise...
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Lawson v. Baltimore Paint and Chemical Corporation
...has been a wilful breach of his duty, full recovery by the plaintiff has generally been allowed. See e. g., Wilshire Oil Co. of Texas v. Riffe, 406 F.2d 1061 (10 Cir. 1969), cert. den. 396 U.S. 843, 90 S.Ct. 105, 24 L.Ed.2d 92 (1969); Backus v. Finkelstein, 23 F.2d 357 (D.Minn.1927). Where,......
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...breach took place nor does it excuse one any more than a failure to make money demonstrates a breach of duty." Wilshire Oil Co. v. Riffe, 406 F.2d 1061, 1062-63 (10th Cir.1969), cert. denied, 396 U.S. 843, 90 S.Ct. 105, 24 L.Ed.2d 92 (1969). See also Chelsea Industries, Inc. v. Gaffney, 389......
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