Meinhard v. Salmon, 164 N.E. 545 (N.Y. 1928)

Facts

Louisa Gerry leased to Salmon for a 20 year period.  Salmon was partners with Meinhard.  When the lease was near its end, Elbridge Gerry had become the owner and approached Salmon about a new lease.  Salmon entered into the lease but did not tell Meinhard about the new lease.

Issue(s)

Did Salmon have a fiduciary duty to inform Meinhard of an opportunity which would occur after the termination of the lease?

Holding(s)

Yes.

Reasoning/Analysis

The Court found that joint adventurers, like copartners, owe to one another, while the enterprise continues, the duty of the finest loyalty.  Salmon held the lease as a fiduciary for himself and another, sharers in a common venture.  Had this fact been proclaimed, Gerry would have laid before the partners, and not merely before one of them, his plan of reconstruction.  We have no thought to hold that Salmon was guilty of a conscious purpose to defraud.

Judgment/Outcome

The Court found in favor of Meinhard.

Concurring Opinions/Dissenting Opinions/Comments

Andrews dissented stating that the venture inaugurated had in view a limited object and was to end at a limited.  The design was to exploit a particular lease.