{"id":1438,"date":"2024-10-24T15:36:59","date_gmt":"2024-10-24T15:36:59","guid":{"rendered":"https:\/\/fawyerz.in\/judgments\/?p=1438"},"modified":"2025-03-12T16:25:14","modified_gmt":"2025-03-12T10:55:14","slug":"emile-erlanger-v-new-sombrero-phosphate-co-case-summary","status":"publish","type":"post","link":"https:\/\/fawyerz.in\/judgments\/company-law\/emile-erlanger-v-new-sombrero-phosphate-co-case-summary\/","title":{"rendered":"Emile Erlanger v. New Sombrero Phosphate co. (1878) (Case Summary)"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"1438\" class=\"elementor elementor-1438\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-top-section elementor-element elementor-element-587d677a elementor-section-full_width elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"587d677a\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-1db72d03\" data-id=\"1db72d03\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<section class=\"elementor-section elementor-inner-section elementor-element elementor-element-60c34225 elementor-section-boxed elementor-section-height-default elementor-section-height-default wpr-particle-no wpr-jarallax-no wpr-parallax-no wpr-sticky-section-no wpr-equal-height-no\" data-id=\"60c34225\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"elementor-column elementor-col-100 elementor-inner-column elementor-element elementor-element-4b66bfa6\" data-id=\"4b66bfa6\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-46c937e5 elementor-widget elementor-widget-heading\" data-id=\"46c937e5\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h1 class=\"elementor-heading-title elementor-size-default\">Emile Erlanger v. New Sombrero Phosphate co. (Case Summary)<\/h1>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4ae85d63 elementor-widget elementor-widget-image\" data-id=\"4ae85d63\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"718\" src=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co.jpg\" class=\"attachment-1536x1536 size-1536x1536 wp-image-1439\" alt=\"Emile Erlanger v. New Sombrero Phosphate co.\" srcset=\"https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co.jpg 1280w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co-300x168.jpg 300w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co-1024x574.jpg 1024w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co-150x84.jpg 150w, https:\/\/fawyerz.in\/judgments\/wp-content\/uploads\/Emile-Erlanger-v.-New-Sombrero-Phosphate-co-768x431.jpg 768w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" title=\"\">\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-1ce4f242 elementor-widget elementor-widget-text-editor\" data-id=\"1ce4f242\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p><span style=\"font-weight: 400;\">This is a landmark English case law, on contract and company Law. The case emphasizes the legal position and fiduciary duty of promoters of a company in making necessary disclosures in related party transactions. <\/span><\/p><div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 ez-toc-wrap-left counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #000000;color:#000000\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #000000;color:#000000\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/emile-erlanger-v-new-sombrero-phosphate-co-case-summary\/#Facts_of_Emile_Erlanger_v_New_Sombrero_Phosphate_co\" >Facts of Emile Erlanger v. New Sombrero Phosphate co.<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/emile-erlanger-v-new-sombrero-phosphate-co-case-summary\/#Issues_framed\" >Issues framed<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/fawyerz.in\/judgments\/company-law\/emile-erlanger-v-new-sombrero-phosphate-co-case-summary\/#Judgment_of_Emile_Erlanger_v_New_Sombrero_Phosphate_co\" >Judgment of Emile Erlanger v. New Sombrero Phosphate co.<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Facts_of_Emile_Erlanger_v_New_Sombrero_Phosphate_co\"><\/span><span style=\"color: #993300;\"><b>Facts of Emile Erlanger v. New Sombrero Phosphate co.<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Erlanger, a businessman, bought an island for <\/span><span style=\"font-weight: 400;\">\u00a3<\/span><span style=\"font-weight: 400;\">55,000 that was a mining site for phosphate.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A company named phosphate co. was incorporated. After the incorporation, Erlanger sold the said land to this company for <\/span><span style=\"font-weight: 400;\">\u00a3110,000<\/span><span style=\"font-weight: 400;\">.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The company had one independent director and other directors were mere puppets of Erlanger, giving him control of the company.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Through promotion and advertisements, the phosphate co. got many investors.<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">After some time, the investors got to know that the land that the company bought was essentially of Erlanger and he sold the land at double price to the company and had made huge profits out of the investors money.\u00a0<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Phosphate co. sued Erlanger, seeking recession of the contract for not disclosing about the ownership of the island and the profit that he was personally making from the transaction. As it was his fiduciary duty to disclose these related party transactions. <\/span><\/li><\/ol><h2><span class=\"ez-toc-section\" id=\"Issues_framed\"><\/span><span style=\"color: #993300;\"><b>Issues framed<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><ol><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Whether the contract between Erlanger and Sombrero Phosphate co. valid?<\/span><\/li><li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Whether a promoter can make \u201csecret profits\u201d from its company?<\/span><\/li><\/ol><h2><span class=\"ez-toc-section\" id=\"Judgment_of_Emile_Erlanger_v_New_Sombrero_Phosphate_co\"><\/span><span style=\"color: #993300;\"><b>Judgment of Emile Erlanger v. New Sombrero Phosphate co.<\/b><\/span><span class=\"ez-toc-section-end\"><\/span><\/h2><p><b><span style=\"font-weight: 400;\">The court allowed the contention of phosphate co. and held that Erlanger is a promoter of the company. Therefore, he had a fiduciary duty to make necessary disclosures. The promoters can not make \u201csecret profits\u201d from the company. <\/span><\/b><b><span style=\"font-weight: 400;\"><br \/><\/span><span style=\"font-weight: 400;\">The court held that the contract is entitled to<\/span><span style=\"font-weight: 400;\">be<\/span><\/b><b><span style=\"font-weight: 400;\">rescinded and also ordered restitution of the profits made by Erlanger.<\/span><\/b><\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>This is a landmark English case law, on contract and company Law. The case emphasizes the legal position and fiduciary duty of promoters of a company in making <\/p>\n","protected":false},"author":3,"featured_media":1439,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9],"tags":[26],"class_list":["post-1438","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-company-law","tag-companies-act"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1438","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/comments?post=1438"}],"version-history":[{"count":35,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1438\/revisions"}],"predecessor-version":[{"id":4653,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/posts\/1438\/revisions\/4653"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/media\/1439"}],"wp:attachment":[{"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/media?parent=1438"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/categories?post=1438"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/fawyerz.in\/judgments\/wp-json\/wp\/v2\/tags?post=1438"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}