FRAMPTON, J. pro tem.
Plaintiff filed his complaint herein on January 13, 1967. The named defendants, on January 26, 1967, filed a general and special demurrer to each cause of action of the complaint and a motion to strike. Upon hearing, the court sustained the general demurrer as to each of the three causes of action set forth in the complaint, with 10 days leave to amend. The
Plaintiff's complaint sets forth three causes of action. The facts set forth in the first cause of action are in substance as follows: Defendant, Jewels by Edwar, Ltd., hereinafter Jewels, is a California corporation; defendants, Edward Kalpakian, hereinafter Edward, and Lucy Kalpakian, hereinafter Lucy, were officers and directors of Jewels and acted as agents of the corporation within the scope of the agency; Edward and Lucy dominated and controlled Jewels and its officers, as well as its business affairs and property; unity of interest and ownership exists between Edward, Lucy and Jewels; the individuality and separateness of said individuals and the corporation has ceased, and the corporation is a mere shell which said individuals have used and now use as a conduit of their personal business; Jewels was created and is being continued pursuant to a fraudulent plan conceived by Edward and Lucy whereby the income of the corporation is diverted to them; adherence to the fiction of the corporate entity would sanction a fraud against plaintiff. In October 1965, Edward asked plaintiff to close the latter's jewelsmith business and become a manager and jewelsmith for Jewels; after repeated requests and on or about January 3, 1966, plaintiff and defendant Edward, acting on behalf of his codefendants, entered into an oral agreement of employment under which defendants agreed to employ and to continue to employ plaintiff for so long as plaintiff should satisfactorily perform as manager of and jewelsmith for Jewels, and under which plaintiff agreed to close his manufacturing jewelsmith business upon entering the employ of defendants.
The complaint, in the first cause of action, alleged further, in substance, that under the terms of the agreement plaintiff was to receive $250 per week plus 2 percent of the yearly gross income of Jewels; that on or about January 10, 1966, pursuant to the oral agreement, plaintiff closed his manufacturing jewelsmith business and entered the employ of Jewels; thereafter plaintiff duly performed all of the conditions and obligations of the oral agreement on his part to be performed; he has at all times been and he is now ready and willing to
The second cause of action incorporates the first 14 paragraphs of the first cause of action, and alleges in substance that in October 1965, the defendants knew that plaintiff was engaged in business in the City of Beverly Hills as a manufacturing jewelsmith; on about January 3, 1966, Edward, acting on behalf of his codefendants, promised plaintiff that if he would close his business and enter the employ of Jewels, the defendants would employ and continue to employ plaintiff so long as he should satisfactorily perform the duties of manager of and jewelsmith for Jewels; at the time said promise was made the defendants did not intend to perform it; such promise was made by defendants with the intent on their part to induce plaintiff to close his business and thereby remove him as a competitor of defendants and to induce plaintiff to enter into and remain in their employ until such time as they should, at their will, elect to terminate such employment; plaintiff was ignorant of the defendants' intention not to perform their promise, and could not, by the exercise of reasonable diligence, have discovered their secret intent; in reliance on said promise, plaintiff was induced to, and did close his business and enter the employ of defendants; had plaintiff known the true facts, he would not have so acted; defendants failed to abide by their promise and on or about February 1, 1966, terminated plaintiff, and have refused to allow plaintiff to perform his duties and have refused to pay him under the agreement; plaintiff satisfactorily performed his duties under the contract of employment; but for the unlawful termination, plaintiff could have and would have continued to satisfactorily perform his duties under the contract; subsequent to February 1, 1966, plaintiff learned that the acts of the defendants hereinabove alleged were part of a fraudulent scheme devised by them and utilized on several occasions for the purpose of eliminating other jewelsmith businesses operating in competition with the corporate defendant. Actual damages,
The third cause of action incorporates certain allegations of the first cause of action and paragraph 34 of the second cause of action, which relates to the alleged fraudulent scheme on the part of defendants used on several occasions to eliminate jewelsmith businesses operating in competition with the corporate defendant, and alleges that from September 1965 to January 1966, the defendants entered into a conspiracy to prevent the competition of plaintiff's jewelsmith business with that of the corporate defendant; the purpose of the conspiracy was to eliminate plaintiff as a competitor of the corporate defendant in the manufacture and sale of fine jewelry; plaintiff was eliminated as a competitor on or about January 10, 1966, when at the special instance and request of the defendants he closed his business to enter the employ of the corporate defendant; defendants' acts in entering into the oral contract of employment with plaintiff were in furtherance of their common scheme and plan to prevent competition of plaintiff's jewelsmith business with that of the corporate defendant in violation of section 16700 et seq. of the Business and Professions Code (the Cartwright Act). Treble damages were sought.
Section 16720 of the Business and Professions Code defines a trust as "... a combination of capital, skill or acts by two or more persons for any of the following purposes...." The proscribed purposes are set forth in the section which generally prohibits combinations in restraint of trade.
Plaintiff's third cause of action, in summary, alleges that the defendant corporation entered into a combination or conspiracy with its officers and directors, who were at all times acting as the agents of the corporate defendant, to prevent the competition of the plaintiff's jewelsmith business with that of the corporate defendant. Plaintiff has cited no authority and we have been unable to find authority in this jurisdiction which would support the plaintiff's position that the combination or conspiracy alleged to have existed between the corporation
We are of the opinion that the language of section 16720 of the Business and Professions Code contemplates concert of action by separate individuals or entities maintaining separate and independent interests, and that the third cause of action in plaintiff's complaint charges only wrongful conduct on the part of a single entity acting through its officers and agents.
The judgment is reversed with directions to overrule the demurrer to the first and second causes of action and to allow the defendants a reasonable time in which to answer.
Ford, P.J., and Moss, J., concurred.