Must Salmon Love Meinhard? Agape and Partnership Fiduciary Duties

The following post comes to us from Stephen M. Bainbridge, Professor of Law at the UCLA School of Law.

In a 2004 lecture, Jeffrie Murphy noted that “John Rawls claimed that justice is the first virtue of social institutions,” but Murphy went on to ask “what if we considered agape to be the first virtue? What would law then be like?” A variant on Murphy’s question has been chosen as the motivating question for the Law and Love Conference, to be held at Pepperdine University School of Law, on February 7-8, 2014, at which this article will be presented. As propounded by the convokers, the question read “What would law be like if we organized it around the value of Christian love [agape]? What would be the implications for the substance and the practice of law?” This article poses those questions with respect to partnership law.

When I was asked to contribute a paper on business organization law to the Pepperdine conference, the conference call immediately brought to mind Benjamin Cardozo’s opinion in Meinhard v. Salmon, [1] which famously held that a managing partner “put himself in a position in which thought of self was to be renounced, however hard the abnegation.” [2] The parallels between Cardozo’s framing of the partner’s duties and, to cite but one example, Kierkegaard’s formulation of agape, which avers that “[l]ove of one’s neighbor … is self-renouncing love,” [3] are obvious and striking. What then would partnership fiduciary duty law be like if it were organized around the value of agape?

Part I of this essay briefly outlines Cardozo’s opinion, with an emphasis on the rhetorical framing he gave fiduciary duties. Part II summarizes the nature and requirements of agape. Part III begins by speculating whether Cardozo might have intended to equate fiduciary duties to agapic love. After tentatively concluding that Cardozo did not intend to do so, at least on anything more than an aspirational level, Part III goes on to explain that subsequent legal developments have implicitly rejected agape as the relevant legal standard. Thought of self, in fact, need not be renounced. Part IV argues that the law should not attempt to require partners to love one another—in the agapic sense of the word—but proposes that the law uphold agapic love as an aspirational ideal.

In Meinhard, Cardozo cloaked the fiduciary principle in rhetorical finery:

Joint adventurers, like copartners, owe to one another, while the enterprise continues, the duty of the finest loyalty. Many forms of conduct permissible in a workaday world for those acting at arm’s length, are forbidden to those bound by fiduciary ties. 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. As to this there has developed a tradition that is unbending and inveterate. Uncompromising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the “disintegrating erosion” of particular exceptions. Only thus has the level of conduct for fiduciaries been kept at a level higher than that trodden by the crowd. It will not consciously be lowered by any judgment of this court. [4]

Somewhat later in the opinion, Cardozo observed that Salmon “was much more than a coadventurer. He was a managing coadventurer.” [5] Salmon was “in control” of the enterprise “with exclusive powers of direction.” [6] In that capacity, Salmon owed Meinhard an even higher duty than the one already articulated for equal partners. “Salmon had put himself in a position in which thought of self was to be renounced, however hard the abnegation.” [7]

It was that latter quote, in particular, that calls to mind the virtue of agape. Agape is the “‘perfect love,’ which seeks the good of the beloved beyond thought of self.” [8] Agape thus “is the willingness to let the self be destroyed rather than that the other cease to be; it is the commitment of the self by self-binding will to make the other great.” [9] All of which sounds remarkably like Cardozo’s articulation of the “punctilio principle,” as being “a loyalty that pricks one’s own possible rationalizations of self-interest with the sharp point of selflessness.” [10]

So must Salmon love Meinhard? As I show in the essay, despite Cardozo’s inspiring rhetoric, the law clearly has said “no.” Agape is simultaneously too indeterminate and too demanding a standard to be suitable for business relationships.

Should Salmon love Meinhard? In the essay, I argue that the answer is “yes” (and vice-vice versa). My analysis of Cardozo’s rhetoric and the intent behind it suggests that agape has great instrumental value. Partners who love one another can trust one another. In turn, partners who trust one another will expend considerable less time and effort—and thus incur much lower costs—monitoring one another.

Agape thus should not be the law, but the law should promote agape as best practice.

The full essay is available for download here.


[1] 164 N.E. 545 (N.Y. 1928).
(go back)

[2] Id. at 548.
(go back)

[3] Søoren Kierkegaard, Works of Love 67 (Howard Hong & Edna Hong trans. 1962).
(go back)

[4] Meinhard, 164 N.E. at 546.
(go back)

[5] Id. at 548.
(go back)

[6] Id.
(go back)

[7] Id.
(go back)

[8] Michael J. Dodds, Thomas Aquinas, Human Suffering, and the Unchanging God of Love, 52 Theological Stud. 330, 332 (1991).
(go back)

[9] Gene Outka, Agape: An Ethical Analysis 8, 10 (1972).
(go back)

[10] Robert B. Thompson, The Story of Meinhard v. Salmon: Fiduciary Duty’s Punctilio, in Corporate Law Stories 105, 124 (J. Mark Ramseyer ed., 2009).
(go back)

Both comments and trackbacks are currently closed.