Court Opinion

ID: 9884905
Source: CourtListenerOpinion
Date Created: 2023-10-06 03:23:07.779473+00
Date Added: 2024-06-11T07:48:42.113739
License: Public Domain

Mr. Justice Friend Dissents. I dissent.both (1) from the procedure adopted by the majority of the court in granting the petition for rehearing through participation of a new member of the court, and (2) from the conclusions of the majority upon the merits of the case. 1. The petition for rehearing was filed after the reassignment of Judges Tuohy and Feinberg to other divisions of the Appellate Court on June 18, 1951. There remained of the former members of the division as of that date only one justice, Judge Niemeyer, who had filed a dissenting opinion. Judge Burke and I, who were assigned to sit with Judge Niemeyer as the reconstituted division,' had been members of the third and second divisions, respectively, and took no part whatever in the original consideration or decision of the case. When the petition came up for disposition in executive session on September 17,1951,1 dissented from the order granting the petition because it seemed to me that the establishment of such a precedent, under the prevailing circumstances, was fraught with danger and might well have mischievous and unfortunate results ; it would, upon ‘change of a part of the court, present the temptation to parties who had judgments against them by a divided court to seek a rehearing for the purpose of producing a different decision by the votes of new members who had not in any way participated in the original appeal. That is precisely what occurred in this proceeding, with the result that the former dissenting opinion has now, through participation of one of the new members, become the" majority opinion, operating as a review and reversal by the present court of the decision of the court as previously constituted, which had decided the appeal after full hearing and careful consideration. It is well known, of course, that the Appellate Court in this district is, for purposes of convenience, divided into three separate divisions, all housed on one floor of the building which they occupy, and that Judges Tuoht and Feinberg were and presently are readily available so that, pursuant to a temporary reassignment order of the Supreme Court, they could review their own decision and pass upon the petition for rehearing. It was and still is my contention that the unusual situation presented should have been resolved either by denying the petition or by referring the matter to the Supreme Court with the request that the first division be reconstituted for the sole purpose of disposing of the petition. After the petition was allowed, plaintiffs filed their answer with supporting authorities, in the forepart of which they cited and discussed numerous decisions in various jurisdictions holding that upon basic principles underlying orderly judicial administration, new members of the court should, as a matter of propriety, refrain from considering a petition for rehearing where they had taken no part in the decision of the cause. The case was then reargued and the question under consideration was fully presented by plaintiffs’ counsel. Although defendants had ample time to study the answer and consider the cases cited by plaintiffs, they presented no authorities to the contrary but took the position that the question was moot. If the question was moot it was rendered so by the order of the court allowing the petition, and since the sole question then being considered was whether the order had been improvidently entered, the court could in good conscience still have reconsidered its allowance of the petition and vacated the order. The defense of the order allowing the petition through participation of a new judge is not and was not made by defendants, but by the court. Therefore, in stating my views, frequent reference will of necessity be made to the majority opinion rather than to defendants’ contentions. The functions of a petition for rehearing are well understood by bench and bar, and the fundamental principles governing the attitude of courts toward rehearings and rearguments are well established. Most reviewing courts prescribe the conditions under which a rehearing may be sought. In this district Rule 13 of the Appellate Court provides that the petition11 shall state concisely the points supposed to have been overlooked or misapprehended by the court” and that “in no case will any argument be permitted in support of such petition.” The paradox is self-evident in procedure which calls upon two new judges of a court of three to consider points supposed to have been overlooked or misapprehended by them in a decision in which they had no part. The impropriety of consider-' ing a petition for rehearing by a newly constituted court was early recognized by Chief Justice Taney in Brown v. Aspden, 55 U. S. 25 (1853). In passing upon a motion for rehearing he announced the rule of the court that no reargument would be heard in any case after judgment unless some member of the court who concurred in the judgment afterwards doubted the correctness of his opinion and desired further argument. The rule was re-enunciated in Ambler v. Whipple, 90 U. S. 278 (1874), and has been adhered to since. There is implicit in these early decisions the sound conclusion of the court that the only office of the petition is to call to the attention of the majority the point supposed to have been overlooked or misapprehended by them in their decision and not to open up the case for reconsideration and redecision; and of course there was in this instance no majority nor, in fact, any member of the majority, of the court to whom a petition for rehearing could be properly addressed. I have carefully studied the decisions presented by plaintiffs in their answer to the petition, as well as those cited in the majority opinion, and comments therein on plaintiffs ’ authorities. With the exception of Metropolitan Water District v. Adams, 19 Cal. (2d) 462, 122 P. (2d) 257 (1942) (following an earlier decision in that state, Luco v. DeToro, 88 Cal. 26, 25 Pac. 983), wherein the court merely held that in the absence of any constitutional or statutory restrictions it had the ‘ ‘ power ’ ’ or right to grant rehearings without considering the propriety of doing so, I find no case in any jurisdiction, State or Federal, which, upon similar facts, sanctions the procedure allowed in the case before us. The authorities are almost unanimously to the contrary. The precise question arose in Cordner v. Cordner, 91 Utah 474, 64 P. (2d) 828 (1937), wherein three members of the court concurred in the majority opinion and two members dissented. A petition for rehearing was filed. In the meantime one of the majority judges retired and a new member was appointed to his position. After a full consideration of the matter and review of the cases of other jurisdictions, the court unanimously concluded that the new member should not participate upon the question of a petition for rehearing, and said: “For the new member of the court to participate would require that he consider the case on its merits and if, after considering the case, he should be compelled to disagree with the conclusion reached by a majority of the court as constituted at the time the decision was rendered, the ultimate effect would be to reverse the decision made. This question has not heretofore been squarely presented to this court. The effect of the participation of a new member of the court, where the court is evenly divided on the question after the retirement of the former member, would establish a precedent fraught with dangerous implications. The principles underlying the proposition involved and controlling the court’s conclusion as to this matter have been long and well established by the courts of other jurisdictions.” (Citing and quoting from Brown v. Aspden’s Administrators, 14 How. 25, 55 U. S. 25,14 L. Ed. 311, Ambler v. Whipple, 23 Wall. 278, 90 U. S. 278, 23 L. Ed. 127, People v. Evening News Ass’n., 51 Mich. 11,16 N. W. 185, People v. Mayor of New York, 25 Wend. (N. Y.) 252, 35 Am. Dec. 669, McCutcheon, Adm’r. v. Common Council of the Village of Homer, 43 Mich. 483, 5 N. W. 668, 38 Am. Rep. 212, Gas Products Co. v. Rankin, 63 Mont. 372, 207 Pac. 993, 24 A. L. R. 294, Woodbury v. Dorman, 15 Minn. 341 (Gil. 274), some of which will hereinafter be more fully discussed.) Following Cordner v. Cordner, the Supreme Court of New Mexico in Flaska v. State, 51 N. M. 13, 177 P. (2d) 174 (1946, 1947) considered the identical problem of passing upon a petition for rehearing when there had been a change in the court personnel after an initial decision by a divided court. Originally three judges had concurred in the majority opinion and two had dissented. There were two motions for rehearing. By the time the second motion was filed one of the judges who had concurred in the majority opinion had retired and a successor had been appointed. Because the question was also one of first impression in that state extensive consideration was given to the propriety of participation by the successor in passing upon the second application for rehearing. After a full and careful consideration of the numerous decisions in other jurisdictions the court decided that the new member should not participate upon the question for rehearing. Becau.se the reasons for the decision of the court are so forcefully stated and precisely applicable to the question here involved, I quote at length from the opinion: “We think the weight of authority, and the better reasoning, supports the conclusion that a judge who takes his place upon a court by succeeding a former judge thereof after said court, as so previously constituted, has rendered judgment and has denied rehearing in a case, cannot with propriety participate in the consideration and determination of a further motion for rehearing in such decided case. A number of authorities to this effect are collected and cited in the cases of Cordner v. Cordner, 91 Utah 474, 64 P. (2d) 828, and Gas Products Co. v. Rankin, 63 Mont. 372, 207 Pac. 993, 24 A. L. R. 294, wherein the Supreme Courts of Utah and Montana each arrive at the same conclusions on the proposition. If it may be said that the case of Metropolitan Water District, etc. v. Adams, 19 Cal. (2d) 463,122 P. (2d) 257 (a case decided upon complicated facts and impressed by practice rules of California), announces another conclusion, we are not in accord with it. (Emphasis ours.) The Gordner case, supra, on its facts is on all fours with the case before this court, except that there the first petition for rehearing was involved, and quotation from it, including quotations therein given, is appropriate: ‘. . . The effect of the participation of a new member of the court, where the court is evenly divided on the question after the retirement of the former member, would establish a precedent fraught with dangerous implications. . . .’ People v. Mayor, etc., of City of New York, 25 Wend. (N. Y.) 252, 35 Am. Dec. 669. ‘It would be mischievous in. a high degree to permit the re-opening of controversies every time a new judge takes his place in the court, thereby encouraging speculation as to the probable effect of such changes upon principles previously declared and enforced in decided cases.’ McCutcheon, Admr. v. Homer, 43 Mich. 483, 5 N. W. 668, 38 Am. Rep. 212. ‘If a reargument were now allowed, and the former decision reversed, this result would follow, not from a conviction upon the part of the members of the court by which the case was originally heard and determined that the decision was erroneous, nor from the consideration of reasons and arguments not before advanced and considered, but solely from the change in the composition of the court. Under such circumstances, a relaxation of the ordinary rules governing applications for re-argument, would seem to be peculiarly ill-timed. It would, in our opinion, be a violation of proprieties in the administration of justice, which it is the duty of a court to maintain, and would tend to destroy that respect for, and confidence in judicial tribunals, the loss of which every good citizen would deplore. ’ Woodbury v. Dorman, 15 Minn. 341, Gil. 274. With the principles thus announced we agree.” (Italics supplied.) In Gas Products Co. v. Rankin, 63 Mont. 372, 207 Pac. 993 (1922), one of the justices of the Montana Supreme Court was incapacitated by illness and a district court judge was called in to sit in his stead. The decision was rendered by a divided court, the district judge voting with the majority. Before the petition for rehearing was heard, the incapacitated justice had died and his vacancy was filled by an appointment. The petition for rehearing was denied for the reason that it did not present any question which had not been fully considered by the court in rendering its decision, and on petition nothing was presented to change the opinion of any member of the court who participated in the original decision. The opinion on the question of rehearing was rendered per curiam, the same district judge again participating in the place of another member of the court at that time incapacitated by illness, but the new appointee took no part; there is, however, a notation following the opinion stating that “while Mr. Justice Farr [the new appointee] takes no part in deciding the petition for rehearing, he agrees with the views herein expressed as to the reasons for his not participating.” The effect of the decision was that the court adhered to the principle that the newly appointed justice should be excluded from passing on the petition for rehearing, notwithstanding that at that time he was a fully qualified member of the court. It said: “Mr. Justice Farr has not given any consideration to this case on its merits, and expresses no views thereon. For him to now participate in the consideration of the petition for rehearing would require that he consider the case on its merits, and, if after so considering the case he should be compelled to disagree with the conclusion reached by Mr. Justice Galen and concur with the dissent of Justices Cooper and Holloway, the ultimate effect would be to reverse the decision made just shortly before he became a member of this court. The real effect of such a conclusion, in the opinion of all the Justices, would be to establish a precedent that might have mischievous and unfortunate results. ’ ’ Golden Valley County v. Greengards, 69 N. D. 171, 284 N. W. 423 (1938, 1939), was decided by a divided court, three members concurring in the majority opinion and two dissenting. Before the petition for rehearing was decided, one of the justices concurring in the majority opinion retired and was succeeded by a new justice. The court in denying the petition for rehearing recognized that the petition could be only a reargument of questions determined by the former court and held that the fact that there had been a change in the composition of the court did not afford any reason for a rehearing. The same result obtained in an earlier case in North Dakota, Carroll v. N. Y. Life Ins. Co., 49 N. D. 798, 193 N. D. 471 (1922, 1923). The principles enunciated by the Utah, New Mexico, Montana and North Dakota courts had been earlier established and followed in New York (People v. Mayor of New York, 25 Am. Decisions 669 (1840)); in Michigan (McCutcheon, Adm’r v. Common Council of Village of Homer, 43 Mich. 483, 5 N. W. 668 (1840); People v. Evening News Ass’n, 51 Mich. 11, 16 N. W. 691 (1883)); and in Minnesota (Woodbury v. Dorman, 15 Minn. (Gil.) 274 (1870)). The majority opinion readily concedes that “Woodbury v. Dorman, 15 Minn. (Gil.) 274, Gas Products Co. v. Rankin, 63 Mont. 372, Cordner v. Cordner, 91 Utah 474, and Flaska v. State, 51 N. M. 13, support plaintiffs’ contention that successor judges should not act on a petition for rehearing of a case decided during the incumbency of their predecessors,” but it seeks to minimize the force of these cases, which are precisely in point, by summarily disposing of them with the statement that “these decisions are based on grounds of expediency.” Woodbury v. Dorman is referred to as stating the theory of these decisions and exposing “its weakness.” In that case two members of the court who joined in denying the application for rehearing because, as they said, a reargument would be a violation ■ of proprieties in the administration of justice and tend to destroy respect for and confidence in judicial tribunals, reserved the right in any future case that might come before the court to re-examine the question res nova of what they considered to be a mistaken rule of property, and overrule the decision “if our present views should remain unchanged.” It is significant that, notwithstanding the disagreement of these two judges with the rule of property laid down in the original and controlling opinion, they joined the other member of the court in denying the application for rehearing; nevertheless the majority in the instant proceeding conclude that “surely it would have been better [in Woodbury v. Dorman] ... if the court had re-examined the question involved as to the validity of the mortgage as res nova. Its decision then would have rested on the sound judgment and conviction of the court and not on judicial courtesy.” This argument begs the question and entirely overlooks the vital point here under consideration; it also carries with it the implication that the original majority opinion of Judges Tuohy and Feinberg was conceived in error and that the majority opinion of the newly constituted court, which reverses the original decision, rests “on the sound judgment and conviction of the court.” The majority brush aside entirely the proprieties enunciated in the cases cited and discussed herein, and embrace instead the “right” of the newly constituted court to act. They say that this right, as expressed in the lone California jurisdiction, “is consistent with Illinois practice.” They admit, however, that they “find no reported Illinois case in which the question presented by plaintiffs has been decided,” but say that “in at least two cases newly elected justices of the Supreme Court have participated in the disposition of petitions for rehearing of cases in which the opinion had been filed prior to their election and qualification. ’ ’ Lees v. Chicago and N. W. Ry. Co., 409 Ill. 536 (1951), is one of the cases to which reference is made. In that case the question was not raised; moreover the case was decided by a court on which, there still remained a majority who participated in the decision. Shortly after the instant case was reargued defendants submitted a written memorandum reviewing the history of People ex rel. Lawrence v. Village of Oak Park, 356 Ill. 154 (1934). This is the other case cited in the majority opinion as being “consistent with Illinois practice.” That case certainly does not support the adoption of the dangerous policy of judicial administration to which the majority subscribe. Four members of the Supreme Court (Justices Orr, Stone, De Young and Jones), constituting the majority of the seven-member court, were on the bench during the entire time the case was in the Supreme Court. The decision clearly indicates that the court did not pass upon the merits of the cause but dismissed the appeal because they considered the controversy moot. The question of the propriety of the new members of the court to pass upon the merits of the controversy was, not raised or argued, as shown by an examination of the briefs, and of course the situation in the Lawrence case is not analogous because in the instant proceeding Judges Tuohy and Feinberg are still readily available pursuant to a temporary reassignment order of the Supreme Court to review their own decision and pass upon the petition for rehearing. Although the precise question has never been decided in this State, the fundamental principle of the foregoing decisions was enunciated and adhered to in Garrett v. Peirce, 84 Ill. App. 31 (1899). Plaintiffs there had originally filed a bill to foreclose a mortgage. The trial court sustained a demurrer and dismissed the bill. On appeal the Appellate Court reversed the trial court, held that the bill stated a cause of action and remanded the cause (Peirce v. Garrett, 65 Ill. App. 682). The case then proceeded to a decree which was reversed in Garrett v. Peirce, 74 Ill. App. 225, for errors in the decree, following which the trial court entered another decree of foreclosure which became the subject matter of the appeal in the case cited as 84 Ill. App. 31. The justices who first decided the case were no longer members of the Appellate Court. The contention that the complainants could not maintain the bill was again argued by defendants in the third appeal, but the court declined to consider those questions and said that “the brief of plaintiffs in error is devoted chiefly to another discussion of the same questions presented when the case was first here. We are still of the opinion that the first decision of this court must be treated as the law of this case until the Supreme Court decides otherwise. As an ordinary rule a mere change in the membership of an appellate tribunal ought not to reopen in the same case questions once settled by it. Such a course would introduce great confusion.” (Italics supplied.) , In all the cases cited herein there remained on the court a substantial number of the members who had joined with the majority in the decision of the appeal. I find no case in any jurisdiction where there remained in the reconstituted court only the dissenting member. In the instant case there is less justification for entertaining and allowing the petition for rehearing than in any of the reported decisions. As to the merits of the case. 2. Without unduly extending these combined opinions, I wish to emphasize, as briefly as possible, the sharp variations between the original and the present majority opinion, both as to the interpretation of the salient facts and the law applicable thereto. Defendants take the position, and the majority now hold, that when the hope or expectation of renewal of the lease was extinguished, Silverman, who had acquired and become the owner of all the stock of Essaness, acting in his own interest, was “free to negotiate independently of the partnership” and go in and buy the Woods Theatre property without breach of his fiduciary relationship to plaintiffs. In essence, the present majority opinion reaches the conclusion that from the latter part of January until the Franciscans by letter of April 25, 1949 finally advised Essaness that they would not grant an extension or make a new lease, Silverman continued his efforts to obtain a renewal, and only when all hope or expectancy had ended, and because he was convinced that the Woods partnership could not successfully finance so large an undertaking, did he decide to purchase the property for himself. The original opinion, written by Judge Tuohy and concurred in by Judge Feihberg, and the record as I view it, present an entirely different picture. According to the testimony of Arthur Bubloff, a Chicago realtor whose recollection was refreshed by a memorandum made at the time, Silverman, as early as June 11, 1946 told Bubloff in a telephone conversation that he planned a new corporation to take over the theatre property at a price of $1,800,000 in the expectation of giving a twenty-year lease on the theatre at $100,000 a year; that the then effective lease was controlled by a number of interests with which he was “not concerned”; that he would go along with those interests until 1951, when the new corporation would take over. He offered Bubloff ten per cent of the new corporation. This evidence is significant as indicating that three years before the actual negotiations began, Silverman was even then considering acquiring the property, not for his beneficiaries but for himself or a corporation which he would control. On September 22, 1948 Nash, an officer of The Beal Estate Corporation which throughout the entire transaction acted on behalf of the Franciscans, notified Stern, an employee of Essaness, that the Franciscans would not exercise their right of termination in the year 1949. After the receipt of that letter Stern commenced negotiations for an extension of the lease beyond April 1951. There were talks on the subject in January and February 1949. Silverman, who went to California in the early part of March, stated that up to April 18, 1949, when he returned to Chicago, he had never discussed anything except the leasing of the theatre; but Stern testified that he had been advised by Nash that Silver-man had, early in March 1949, requested Nash to contact Blackman, Silverman’s attorney, for the purpose of continuing the talks and transactions in connection with the sale of the Woods Theatre building. According to Nash, this conversation took place before Silver-man went to California. Nash was not called to deny this conversation. Stern also testified that about the middle of March 1949 he talked to Silverman at the Racquet Club in Palm Springs, California. “He did not tell me that he had been discussing the Woods Theatre with Mr. Blackman over the telephone. Mr. Silverman told me that he had heard there were a number of people trying to purchase the Woods property and fee.' He mentioned some names. . . . He didn’t say that he was one of the persons trying to buy the Woods Theatre and fee. . . . After Mr. Silverman returned to Chicago in April 1949, the first time we discussed the Woods Theatre was around approximately the 21st or 22nd of April.” The following questions and answers are revealing: “Q. What did he say? A. He told me he was dealing and trying to purchase the Woods building and fee, and there were a lot of other people trying to do the same thing, and he cautioned me not to say anything to anybody, including my wife. . . . Q. Did you tell your wife? A. I did not, no. Q. Did you tell anyone about it at that time? A. I did not.” Stern was not-a member of the Woods Theatre partnership, but his wife was. This is significant in view of defendants ’ contention that Silverman had advised Stern of his intention to buy and that it constituted notice to the partnership. There is also the testimony of Silverman that between March 1-9, when he left for California, he instructed Blackman to investigate on behalf of Essaness the mortgage possibilities of the property so that in the event Ben Gold's offer (which was ultimately rejected by the Franciscans) did not materialize, unhurried consideration could be given to the question of going ahead with an offer of purchase by Essaness. Subsequently, on April 26, when the formal contract for the purchase of the property was signed, Silverman for the first time announced at a meeting that he had ascertained that the property could be purchased for $1,200,000, subject to the additional payment of $50,000 as broker’s commission, and also that a loan of $750,000 could be obtained from the New England Mutual Life Insurance Company. Up to this time none of the plaintiffs knew that Silverman was purchasing the property, except Stern, who had been so advised by Silverman two or three days before and cautioned not to disclose the fact to anyone, including his wife. Morris Glasser testified that on arriving home, about midnight of April 25 he telephoned Silver-man in compliance with a message to call regardless of time; that Silverman told him that he had spoken to Stern and asked Stern to get in touch with him (Glasser) ; that something had come up in connection with the Woods Theatre; that the Franciscans had been negotiating for the sale of the property and “if we wanted to protect our interests we would be able to work out a deal to buy the property.” After a short discussion Silverman suggested that Glasser meet with him the following day to discuss the matter further in the hope of reaching some conclusion. Pursuant to their telephone appointment, Glasser went to Silverman’s office at eleven o’clock on April 26. Stern was there, and Blackman arrived shortly thereafter. Grlasser testified that Blackman had not discussed with him the possibilities of purchasing the Woods property prior to the conversation that he had had with Silver-man on the evening before. “Neither Mr: Silverman nor Mr. Stern had ever mentioned it to me. I had never been approached by anyone representing Essaness Theatres Corporation about the purchase of Woods Theatre Corporation.” Grlasser stated that at this conference Silverman started the discussion by saying that there was little more to add to what he had said the night before, that there had been negotiations for the sale of the Woods property, that it could be purchased for $1,200,000 subject to the payment of $50,000 as broker’s commission, and that he could arrange for a loan of $750,000 from the New England Insurance Company. Blackman testified that either Nash or Silverman or both had told him some time prior to April 20, 1949 that the Franciscans were negotiating for the sale of the property to somebody at a figure around $1,600,000 and until those negotiations had concluded, they would not commence negotiations with Essaness; that about April 20 the negotiations with the other party had concluded without a sale being made"; and that the “first time I was doing any actual negotiating for the purchase of this property was some time around April 20th. We were checking into the value of this property before then because we knew that negotiations had been going on with other parties for the sale of the property, and we were contacting various insurance companies to get a feel on what they would do in the way of a loan. I would say I started getting this feel to purchase the property several weeks before that. . . . Mr. Silverman was in California several weeks prior to April 20, 1949. I had frequent conversations with him by telephone. He or Mr. Nash told me about the possibilities of the sale of the Woods property. ... He told me that I should investigate it as a possibility for the partners or the Essaness Theatres Company. He told me either one or both. I don’t think that I ever mentioned the possibility of purchase to any member of the partners prior to April 25, 1949.” This evidence clearly indicates that negotiations with the Franciscan Fathers had been going on since March or early April without notice to any of the Woods Theatre partners, and that all the groundwork looking forward to the purchase of the property by Essaness had been laid and had apparently extended over a long period of time. It is inconceivable that a transaction of this magnitude could have been reduced to writing without considerable prior negotiation. On the record, only the salient portions of which have been summarized, it would be naive to conclude that on April 26, 1949 Silverman stepped in to buy the property only after he had been finally advised by letter dated April 25, 1949, which was the first written rejection of negotiations for renewal of the lease, that the Franciscans would not extend it. It strikes me as incredible that there could be such a casual and hasty consideration of a million dollar real estate transaction; rather it seems a fair inference from the circumstances related that he had coveted the property for approximately three years and had planned during that time and had finally taken definite steps to acquire it long before hope or expectation of renewal of the lease had terminated, without advising the Woods Theatre partnership of his intention so to do. His desire to acquire the property can be readily understood in the light of the steadily mounting income of the leasehold; during the year ending August 31, 1941 it yielded an income of only $23,013.08, and the following seven years the yield increased until in 1948 there was an income of $232,831.-51. In retrospect it is not surprising that, desiring, as they did, to sell the property, the Franciscans were not anxious to negotiate an extension of the lease when arrangements for its sale were under way with Essaness as the prospective purchaser. If Silverman’s desire to purchase the property had not been known to the Franciscans it is quite possible that, although their primary interest was to sell it, if a suitable purchaser could be obtained, they would have renewed the lease as they had on five previous occasions, with cancellation provision, until such time as they could find a suitable buyer. Notwithstanding their strong motivation for unburdening themselves of the property, it had been leased by the Franciscans on succeeding leases for seven years after they had acquired it, for the simple reason that they were unable to sell it on any satisfactory basis. Prospective sales to Gold and others had not materialized. The conclusion is inescapable that if the Franciscans had been unable to dispose of the property by sale, they would have continued to rent it rather than permit the theatre to remain idle. Silverman, by entering into negotiations as purchaser, destroyed every possibility that was then open to the Woods partnership for a renewal of the lease. There is no question that a principal-and-agent relationship existed between the Woods partnership and Essaness. As to all matters within the scope of its agency, Essaness acted in a fiduciary capacity and was bound to the exercise of the utmost good faith in dealing with and concerning the interests of its principals; it could not regard the Woods property as fair game to acquire in competition with its principal, the partnership ; and when it undertook to carry on negotiations for purchase of the property in competition with others who were seeking to acquire it, thereby defeating any possibility of the extension of the leasehold for the partnership, it violated a fundamental rule of the law of trusts, which is well expressed in the following cases. In Commercial Merchants Bank v. Kloth, 360 Ill. 294, the court said: “Where one voluntarily assumes the confidential relation towards another, he will not be permitted, at the expense of such relation, to deal in the'property of the opposite party for his own pecuniary profit. . . . The burden is on the fiduciary to show the fairness of any transaction between him and the grantor, .... Before a court of equity will permit a transaction between parties occupying a fiduciary relation to stand, the dominant party who has profited thereby must overcome the presumption of fraud by clear and convincing proof that he has exercised good faith and has not betrayed the confidence reposed in him.” The reasons for the rule are well stated in Trice et al. v. Comstock et al., 121 Fed. 620, as follows: “For reasons of public policy, founded in a profound knowledge of the human intellect and of the motives that inspire the actions of men, the law peremptorily forbids every one who, in a fiduciary relation, has acquired information concerning or interest in the business or property of his correlate from using that knowledge or interest to prevent the latter from accomplishing the purpose of the relation. If one ignores or violates this prohibition, the law charges the interest or the property which he acquires in this way with a trust for the benefit of the other party to the relation, at the option of the latter, while it denies to the former all commission or compensation for his services. This inexorable principle of the law is not based upon, nor conditioned by, the respective interests or powers of the parties to the relation, the times when that relation commences or terminates, or the injury or damage which the betrayal of the confidence given entails. It rests upon a broader foundation, upon that sagacious public policy which, for the purpose of removing all temptation, removes all possibility that a trustee may derive profit from the subject-matter of his trust . . . .” In the early case of Davis v. Hamlin, 108 Ill. 39, the basis for the rule was cogently explained: “Public policy, we think, must condemn such a transaction .... To sanction it would hold out a temptation to the agent to speculate off from his principal-to the latter’s detriment. ... If a manager of a business were allowed to obtain such a lease for himself, there would be laid before him the inducement to produce in the mind of his principal an underestimate of the value of the lease, and to that end, may be, to mismanage so as to reduce profits, in order that he might more easily acquire the lease for himself. . . . Although there was here no right of renewal of the lease in the tenant, he had a reasonable expectation of its renewal, which courts of equity have recognized as an interest of value, secretly to interfere with which, and disappoint, by an agent in the management of the lessee’s business, we regard as inconsistent with the fidelity which the agent owes to the business of his principal.” Numerous other cases cited in plaintiffs’ brief and in the original majority opinion approve the well-established law of trusts enunciated in the foregoing decisions. Defendants cite, and the present majority opinion largely relies on, Crittenden & Cowler Co. v. Cowler, 72 N. Y. Supp. 701, and Thanos v. Thanos, 313 Ill. 499, which, they say, is controlling. In the Crittenden case the defendant and one Barber were the sole directors of the plaintiff corporation. Barber threatened to deprive defendant of the management of the corporate business. Both he and the corporation then applied to the landlord for a new lease. The landlord thereupon proceeded to investigate the situation and after a meeting, at which Barber and all the stockholders of the corporation were represented, he decided not to lease to the corporation. In commenting on these circumstances the court said: “Here there was no secret leasing, no act done' ‘behind the back.’ Here we have a positive refusal on the part of the landlord to accept the corporation as a tenant. This refusal, after application made and considered, disposed of and cut off that ‘expectancy’ which is declared by some authorities to run with every lease, — the expectancy of a renewal. ’ ’ Barber did nothing to accelerate the end of the expectancy, as Silverman did in the instant case by destroying all hope of renewal through negotiation with the Franciscans, while the expectancy still existed. In Thanos v. Thanos, the question was whether a leasehold was purchased with partnership funds or with the funds of an individual defendant, and it was held in effect that if the property was not purchased with partnership funds, such fact would constitute evidence that it was the intent of the partners that the property should not belong to the partnership. The facts in that case clearly distinguish it from the one at bar. The classic pronouncement of Judge Cardozo in Meinhard v. Salmon, 249 N. Y. 458, expresses the standard of conduct to which fiduciary in the instant case should be held: “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 (Wendt v. Fischer, 243 N. Y. 439, 444). 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.” The decree of the Superior Court should be reversed and the cause remanded with directions to enter a decree in conformity with the prayer of the complaint and as ordered in the original majority opinion.