Bowne v. Windsor

• Decision Date: 10 July 1930
• Citation: 151 A. 124
• Parties: BOWNE et al. v. WINDSOR.
• Court: New Jersey Court of Chancery

151 A. 124

BOWNE et al.

v. WINDSOR.

Court of Chancery of New Jersey.

July 10, 1930.

Syllabus by the Court.

The relation of joint adventurers, like that of copartners, is fiduciary, one of trust and confidence, calling for the utmost good faith, permitting of no secret advantages or benefits.

Additional Syllabus by Editorial Staff.

Suit by John E. Bowne and another against Arthur C. Windsor for an accounting.

Decree for complainants.

Heine & Laird, of Newark, for complainants.

Lintott, Kahrs & Young and Merritt Lane, all of Newark, for defendant.

BACKES, Vice Chancellor.

Windsor was a joint adventurer with Bowne and Mertz in the ownership of a large factory building on Washington street, Newark, for seven years, when he bought their interests and five days later sold the factory to a tenant at a profit in excess of $50,000. The charge is, that at the time Windsor bought his associates' shares the tenant was a prospective purchaser, negotiating with him, and that he concealed the fact from them. The relation of joint adventurers, like that of copartners," is fiduciary, one of trust and confidence, calling for the utmost good faith, permitting of no secret advantages or benefits. 15 R. C. L. 500 et seq. Gilbert & O'Callighan v. Anderson, 73 N. J. Eq. 243, 66 A. 926; Jackson v. Hooper, 76 N. J. Eq. 185, 74 A. 130. The venture, undertaken in 1922, was not promising up to the time the three met on January 3, 1929, to apportion among them the proceeds of an $80,000 mortgage effected on the factory. They differed over whether the money was divisible equally or proportionally and whether according to the terms of an agreement to divide upon a sale. Windsor, whose investment was largest, held to the proportional view, and he was right. The dispute had continued for three days and with acrimony, terminating in a sale of the property to Windsor which yielded Bowne $30,000 and Mertz $14,000, leaving both heavy losers. Years of disappointment, a gloomy outlook and at loggerheads over the division of the mortgage money influenced the sale. Who suggested it is not clear, but Bowne made the first offer to buy at $115,000. Windsor made a counter offer, the one eventually agreed upon. He is pictured as eager to buy, yet at one stage in the negotiations and in an apparent spirit of fairness, he offered to draw slips from a hat to decide to which one of them should fall the lot of taking over the property, but on what terms does not appear: and at other times he was urged to take it over as the logical purchaser and was reluctant. The seemingly conflicting testimony of what happened during the three days of wrangling is reconcilable only on the theory that the hostile parties gave self-favoring phases of everchanging and conflicting events in a prolonged struggle, and leaves the mind neutral on the point for which it was offered, that Windsor's conduct reflected accomplishment of the secret dealings charged to him. It is of slight significance and of little guidance on the question of double-dealing, for if Windsor's motives were upright his conduct was consistent, while if there was overreaching, a pretense of eagerness to sell instead of buying would have been but subtle subterfuge. The interesting thing is what happened before: No sooner had he the title than Windsor addressed himself to the bookkeeper of the tenant, that he had bought the Bowne and Mertz interests and that ho was the sole owner of the property and "I wonder if we cannot make some kind of a proposition to Mr. Stockman," meaning the president of the Delagrave Company, the tenant, and commissioned him to offer to his employer the property for $175,000. The same day, he says, the bookkeeper "rushed in" with an offer of $140,000, which he met by a counter offer of $165,000, and at that figure the deal was made within the next day or two. Was this fortuitous? The price was for the land on which the factory stood and a twenty-five foot strip adjoining. Ten days later the remaining seventy-five feet of land was included in the sale at $35,000. Windsor admits that, in August preceding, he had offered Stockman the building plot for $175,000, and the entire plot for $200,000, and upon pressing him with, 'Why don't you take it?" that Stockman shrugged his shoulder, and that later, in September, he spoke to him again and was met with an argument that "he wanted to be all under one place, that he wanted to be close together where he could oversee everything." The factory was just such a place. Stockman says there was much more to it than the shrug of his shoulder and the argument. It was in October, maybe November...