Procedural Posture

Appellant laundry corporation sought review of a judgment of the Superior Court of Orange County (California), which awarded damages to respondent driver for an alleged breach of contract for commissions for washing clothing.

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Overview

Respondent driver paid the director of appellant laundry corporation for a car and the exclusive right to gather and deliver laundry for customers on a certain route. Difficulties arose, and when appellant refused to wash laundry for respondent, appellant hired another driver and advised customers to patronize the new driver. Respondent continued his service on the route for customers, but he took the laundry to a competitor for washing. Respondent sued appellant corporation and its directors, alleging lost business and damages. The trial court granted a motion for nonsuit as to the directors but denied it as to the corporation against whom damages were assessed. The corporation appealed. The court reversed, finding that the agency created between respondent and the director was terminable at will by either party, and since it was for an indefinite term, its revocation was not a breach. Appellant corporation was also deemed not a party to the contract and was not bound by the agreement. Finally, the court found that the trial court erroneously assumed that damages for wrongfully appropriating customers was the proper remedy in an action for breach of contract.

Outcome

The court reversed the trial court’s judgment.