Citation. Meinhard v. Salmon, 249 N.Y. 458, 164 N.E. 545, 62 A.L.R. 1 (N.Y. 1928)
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Brief Fact Summary.
Plaintiff, Morton Meinhard, was a partner with Defendant, Walter Salmon, in the leasing and operation of a hotel. Four months before the lease expired, Defendant entered into an agreement with a third party over the future of the hotel but did not disclose the deal to Plaintiff.
Synopsis of Rule of Law.
Each partner in a partnership owes the other partners a fiduciary duty to act in the best interests of the partnership over the interests of the individual in matters concerning the partnership.
Defendant leased the hotel building from lessor in 1902. Defendant formed a partnership with Plaintiff for each to cover half of the expenses for upgrades and maintenance of the hotel and for the first five years Plaintiff received 60% profits. After five years each party received 50%. Defendant was the manager of the building. Four months prior to the expiration of the lease, Defendant signed a new lease with the lessor that would encompass the hotel plus the surrounding area. The deal was between the lessor and a business solely run by Defendant.