PRINCIPAL AND AGENT-COMPENSATION OF UNFAITHFUL AGENT

Plaintiff, manager of defendant's mechanical division under a contract requiring him to devote all his efforts to this employment and providing that he would share the profits and losses of the division equally with defendant as his only compensation, sued to recover a balance of $42,991.90 in his favor after his discharge by defendant. The contract provided that on "any termination" of plaintiff's employment his account should be adjusted and any credit balance paid him, but defendant contended that plaintiff had forfeited his right to compensation by secretly engaging in a partnership in competition with defendant. The trial court found that defendant was not substantially harmed by this activity but dismissed plaintiff's bill for an accounting. On appeal, held, reversed.

The infidelity of plaintiff as an agent should not, as between him and his principal, entail consequences in the matter of compensation which his principal has agreed should not follow from it, although plaintiff will be charged with the entire $1,630.74 profit of his secret occupation and, in addition, any damages defendant may be able to prove at the second trial. Walsh v. Atlantic Research Associates, Inc., (Mass. 1947) 71 N.E. (2d) 580.