Meinhard v. Salmon

Facts

On April, 1902, Louisa M. Gerry leased to the defendant Walter J. Salmon the premises known as the Hotel Bristol in the city of New York. The lease was for a term of twenty years ending April 30, 1922. The lessees undertook to change the hotel building for use as shops and offices at a cost of $200,000. Salmon, while in course of treaty with the lessor as to the execution of the lease, was in course of treaty with Meinhard, the plaintiff, for the necessary funds. The result was a joint venture. Meinhard was to pay to Salmon half of the moneys and Salmon was to pay to Meinhard 40 percent of the net profits for the first five years of the lease. Salmon, however, was to have sole power to manage, lease and operate the building. The two were co-adventurers, subject to fiduciary duties. On January, 1922, the lease between Gerry and the Midpoint Realty Company was signed. Salmon had not told Meinhard anything about it. Meinhard demanded on the defendants that the lease be held in trust as an asset of the venture. The demand was refused.