Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545 (N.Y. 1928)
Meinhard v. Salmon is one of the most frequently cited fiduciary duty cases in American business law.
Whether a managing co-venturer breaches his fiduciary duty of loyalty by secretly appropriating a renewal or expansion opportunity—arising from and closely related to the subject of the joint venture—without disclosure and without offering his co-venturer the chance to share in it.
Partners and joint venturers owe one another the highest fiduciary duties of loyalty, good faith, and full disclosure with respect to matters within the scope of or closely related to the venture. A managing co-venturer may not, without disclosure and consent, appropriate for himself a business opportunity that arises out of the venture or is an extension, renewal, or enlargement of it. If a fiduciary wrongfully appropriates such an opportunity, equity will impose a constructive trust or other equitable remedy to protect the beneficiary's proportionate interest.
Yes. Salmon, as managing co-venturer, breached his fiduciary duty by secretly obtaining the new lease that was a continuation and expansion of the joint venture's subject matter. The court imposed a constructive trust over the new lease to the extent of Meinhard's equitable share, awarding him a one-half interest consistent with the venture's profit-sharing arrangement.
Meinhard v. Salmon is the canonical statement of fiduciary loyalty in partnerships and joint ventures. It anchors the modern understanding that managing fiduciaries must disclose and cannot usurp opportunities derived from the venture. The case is frequently taught alongside the corporate opportunity doctrine and remains a key precedent for imposing constructive trusts when a fiduciary attempts to freeze out a co-owner near the end of a term or during renewal negotiations. For law students, it illuminates the contours of when an opportunity is sufficiently related to a venture to trigger fiduciary obligations, how courts weigh timing and source, and why equitable remedies often provide the principal relief.