The Salmon-Meinhard contract had the following terms. Meinhard would
contribute half of the funds necessary to renovate the property; in return Salmon would pay Meinhard forty percent of the net profits for five years and fifty percent thereafter. The parties would share equally in losses. Salmon was given full authority to manage the property.The deal turned out to be a spectacular success. As Salmon predicted, mid-town Manhattan prospered, and with it came demand for commercial office space. The Bristol (el edificio construido sobre el solar se llamaba así) commanded good rents from the start and increased in profitability over the years. A tax case involving Meinhard reported that the enterprise lost money only in the first year and showed ever-increasing profits thereafter…. Over the life of the lease Meinhard and Salmon each received over $550,000 on their investments of slightly more than $52,000.
Meinhard questioned charges that Salmon was making for expenses and complained that Salmon was not informing him about management decisions. The parties resolved the issues in 1908: Salmon promised to brief Meinhard on request about the affairs of the venture, and Meinhard agreed to allow Salmon a fixed charge of 6% of the rentals for management expenses. But this compromise didn’t heal the wounds. Relations between Meinhard and Salmon deteriorated to the point that they had essentially no contact after 1917”
Pero, aunque a Salmon no le diera igual, (Salmon “reportedly sent Cardozo a bouquet of flowers on each anniversary of the opinion”) la sentencia es hoy recordada, no por el fallo sino por la fórmula utilizada por Cardozo para definir los deberes de lealtad
A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior… the level of conduct for fiduciaries [has] been kept at a level higher than that trodden by the crowd.
By 1934 his estate owed $845,000 on the 500 Fifth Avenue property and could not satisfy its charitable bequests. Walter J. Salmon bought out the estate’s interest at a bargain price
Actualización: Jorge Benavides