Fred and John form a partnership to apply window tinting in cars. On week-ends, John takes in individual window tinting jobs without informing Fred. When Fred learns of this, he is upset and demands his share of the money John made from the week-end work. John defends himself by saying this work was done outside of normal business hours. Address these two questions: a.Define "fiduciary relationship". b. How does the case of Veale v. Rose on page 396 assist you in deciding who should win this case?

LEGAL BRIEFCASE Veale v. Rose 657 S.W.2d 834 (Texas Ct. of App. 1983) FACTS which the jury could have inferred that the work which Rose Veal Sr., Beale Jr., Gibson, Parker, and Rose were partners in did for Right Away Foods... was of the type which did not re- an accounting firm. The partnership agreement permitted quire the services of a CPA. However, Rose... admitted that partners to pursue other business interests so long as doing there was no reason why he could not have rendered (those so did not conflict with the partnership practice. Rose per services as a partner in the accounting firm. ... In fact in re- formed accounting work for Right Away Foods and Payne, re- gard to services in connection with mergers and acquisitions, ceiving the compensation personally. Rose's partners claimed [Parker testified) that he was unaware of any (such work that that he owed them a share in that he had competed with the was not] prepared by public accounting firms. The preponder- firm in violation of the partnership agreement. The jury held for ance of all the evidence clearly establishes that Rose... per- Rose. The partners appealed. formed accounting services for Right Away Foods ... in competition with the partnership. The [jury] was in error. Chief Justice Nye ... Rose also admitted that he performed accounting ser- vices for (Payne) for which he billed and received payment personally. There is no question that those services were pub- The partnership agreement between Rose and the appellants lic accounting services. His later testimony that he performed provided in part: the services, in effect, after hours, or in addition to his duties to the partnership, is of no value in light of the obligations im- Except with the expressed approval of the other partners as posed by the partnership agreement and by the common un to each specific instance, no partner shall perform any derstanding of the term "competition." public accounting services... other than... on behalf of [Reversed and remanded.] this partnership Partners ... occupy a fiduciary relationship towards one Questions another which requires of them the utmost degree of good 1. a. Why was Rose's work for Right Away Foods considered faith and honesty in dealing with one another.... a violation of the partnership agreement? It is undisputed that while a partner ... Rose rendered ac- b. Why did Rose's "after-hours" argument fail? counting services for Right Away Foods for which he billed 2. Could Rose operate a gas station without violating the and received payment personally. (The) partnership did not partnership agreement? share in the proceeds. ... There was some testimony from LEGAL BRIEFCASE Veale v. Rose 657 S.W.2d 834 (Texas Ct. of App. 1983) FACTS which the jury could have inferred that the work which Rose Veal Sr., Beale Jr., Gibson, Parker, and Rose were partners in did for Right Away Foods... was of the type which did not re- an accounting firm. The partnership agreement permitted quire the services of a CPA. However, Rose... admitted that partners to pursue other business interests so long as doing there was no reason why he could not have rendered (those so did not conflict with the partnership practice. Rose per services as a partner in the accounting firm. ... In fact in re- formed accounting work for Right Away Foods and Payne, re- gard to services in connection with mergers and acquisitions, ceiving the compensation personally. Rose's partners claimed [Parker testified) that he was unaware of any (such work that that he owed them a share in that he had competed with the was not] prepared by public accounting firms. The preponder- firm in violation of the partnership agreement. The jury held for ance of all the evidence clearly establishes that Rose... per- Rose. The partners appealed. formed accounting services for Right Away Foods ... in competition with the partnership. The [jury] was in error. Chief Justice Nye ... Rose also admitted that he performed accounting ser- vices for (Payne) for which he billed and received payment personally. There is no question that those services were pub- The partnership agreement between Rose and the appellants lic accounting services. His later testimony that he performed provided in part: the services, in effect, after hours, or in addition to his duties to the partnership, is of no value in light of the obligations im- Except with the expressed approval of the other partners as posed by the partnership agreement and by the common un to each specific instance, no partner shall perform any derstanding of the term "competition." public accounting services... other than... on behalf of [Reversed and remanded.] this partnership Partners ... occupy a fiduciary relationship towards one Questions another which requires of them the utmost degree of good 1. a. Why was Rose's work for Right Away Foods considered faith and honesty in dealing with one another.... a violation of the partnership agreement? It is undisputed that while a partner ... Rose rendered ac- b. Why did Rose's "after-hours" argument fail? counting services for Right Away Foods for which he billed 2. Could Rose operate a gas station without violating the and received payment personally. (The) partnership did not partnership agreement? share in the proceeds. ... There was some testimony from