(dissenting):
So far as I can see, the majority decides this case on an issue that was never raised or argued below by the parties. It also does not give leave to the plaintiffs to amend their complaint. While an appellate court is not automatically precluded from ruling on an issue never presented to the court below, see Hormel v. Helvering, 312 U.S. 552, 556, 61 S.Ct. 719, 721, 85 L.Ed. 1037 (1941); Helvering v. Gowran, 302 U.S. 238, 245, 58 S.Ct. 154, 157, 82 L.Ed. 224 (1937), this may only occur when the case is exceptional, to avoid injustice, Hormel, supra, 312 U.S. at 557, 61 S.Ct. at 158, see 9 C. Wright & A. Miller, Federal Practice and Procedure § 2588, at 749-50 (1971), or where the proper resolution is beyond any doubt. Singleton v. Wulff, 428 U.S. 106, 121, 96 S.Ct. 2868, 2877, 49 L.Ed.2d 826 (1976). Even if this qualifies as such a case, which I doubt, it would seem that the losing party should be given “the opportunity to establish [in the lower court] additional facts which would affect the result.” Gowran, supra, 302 U.S. at 247, 58 S.Ct. at 158. Since this involves a dismissal of a complaint for failure to state a claim for relief, at the very least appellants should have the opportunity to amend their complaint, to make it more specific in the allegations pertaining to the relation between Olinkraft and Morgan Stanley. Fed.R.Civ.P. 15(a); see 6 C. Wright & A. Miller, supra, § 1484, at 417 & n.9 (many cases cited).
Even without an amendment, I think the complaint, when construed liberally as Fed. R.Civ.P. 8(f) requires, see New York State Waterways Association, Inc. v. Diamond, 469 F.2d 419, 421 (2d Cir. 1972), can be said to allege that Morgan Stanley was acting in a fiduciary capacity, although the word “fiduciary” is never used. Cf. Patch v. Stanley Works, 448 F.2d 483, 487 n.9 (2d Cir. 1971) (complaint not specifically pleading strict liability nevertheless deemed sufficient to raise that issue).
Here Morgan Stanley’s Mergers and Acquisitions Department was engaged by Kennecott Copper Corporation to find a company which Kennecott could acquire for itself. One to be considered was Olinkraft, which, the complaint alleges, “cooperated with Mergers and Acquisitions in its work on the Kennecott Bid and supplied it with highly favorable confidential internal earnings projections,” for an obviously “polite” if not a “friendly” possible tender offer. Moreover, “Mergers and Acquisitions” was instructed by Olinkraft that the Confidential Inside Information was to be used in connection with the Kennecott Bid and was to be returned to Olinkraft if such bid did not go through.” The complaint goes on to allege that Mergers and Acquisitions nevertheless retained the confidential information after the Kennecott bid was abandoned, and Morgan Stanley’s Arbitrage Department purchased a substantial block of Olinkraft common stock. Mergers and Acquisitions subsequently provided the “Confidential Inside Information” to Johns-Man-ville Corporation in an effort to induce it to make a higher offer than that already made by another company, Texas Eastern Corp., for the Olinkraft acquisition. The complaint concludes that the conduct of Mergers and Acquisitions prohibited Morgan Stanley from purchasing Olinkraft shares, and that it should not be allowed to “profit[ ] from a tortious breach of duty” in violation of the common law.
The question presented very briefly is whether the complaint, broadly construed, states a sufficient relation between Morgan Stanley and Olinkraft so as to prevent the former from utilizing nonpublic material information obtained from the latter for its own profit. I think it does. True, Morgan Stanley was hired and presumably paid by *801Kennecott for its services, and it was not hired by Olinkraft. Thus, at least during the initial approaches on Kennecott’s behalf made by Morgan Stanley, it was surely not an agent of, and owed no especial duty to, Olinkraft or Olinkraft’s stockholders. But after Olinkraft began to cooperate in the deal by turning over the “Confidential Inside Information” as to favorable earnings prospects, I think the acceptance of such information by Morgan Stanley, on the confidential terms, along with its understood role as intermediary in a cooperative takeover, imposed a duty on the investment banker under well-established common law principles not to use that information for its own profit. As Professor Scott stated in his treatise, “The same principles [that prevent a fiduciary from taking personal advantage of confidential information obtained as such, as against the beneficiary] are applicable even though the parties are not technically in a fiduciary relation, if one of them acquires confidential information from the other.” 3 A. Scott, The Law of Trusts § 505, at 2428 (1939) (citing Tyler v. Tyler, 54 R.I. 254, 172 A. 820 (1934), where a son was held accountable to his father for profiting from confidential information furnished by his father).1
While ordinarily this doctrine has been applied in the employee context, where an employee already had a duty as agent to his employer, e. g., Hunter v. Shell Oil Co., 198 F.2d 485, 488-89 (5th Cir. 1952) (geologist employed by oil company), or where an employee acquired secret information relating to a portion of his' employer’s business with respect to which he was not an agent, e. g., Brophy v. Cities Service Co., 31 Del. Ch. 241, 70 A.2d 5, 7-8 (1949),2 I see no logical reason why it should not extend to the case of a corporate marriage-broker where the parties are cooperative, absent agreements to the contrary. The fact that Morgan Stanley had no inherent pre-exist-ing duty to Olinkraft should not prevent us from constructing a fiduciary relationship once the banker presumably agreed to use the information only for the Kennecott bid.3 Indeed, in Brophy, only after the employee acquired the confidential information did he become a fiduciary, thereby creating a duty and trust relationship. Id. at 7. As Judge Learned Hand noted when this court upheld for a third time the constitutionality of Section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78p(b) (dealing with a sale by a director or corporate officer of stock in his company to an outsider based on inside information):
When they sold shares, it could indeed be argued that they were not dealing with a beneficiary, but with one whom his purchase made a beneficiary. That should not, however, have obscured the fact that the director or officer assumed a fiduciary relation to the buyer by the very sale; for it would be a sorry distinction to allow him to use the advantage of his position to induce the buyer into the position of a beneficiary, although he was forbidden to do so, once the buyer had become one.
Gratz v. Claughton, 187 F.2d 46, 49 (2d Cir.), cert. denied, 341 U.S. 920, 71 S.Ct. 741, 95 L.Ed. 1353 (1951), quoted in Cady, Roberts & Co., 40 S.E.C. 907, 914 n. 23 (1961), in *802turn quoted in Chiarella v. United States, -U.S. -, -, n. 8, 100 S.Ct. 1108, 1114 n. 8, 63 L.Ed.2d 348 (1980).
To my mind, the need to police this sort of use of confidentially revealed information inheres in the role of the investment banker during merger/acquisition activity. As was pointed out by Morgan Stanley’s own Robert F. Greenhill in an ABA Symposium, discussing the responsibilities of the investment banker in the tender offer context:
In terms of establishing and maintaining communications between both sides, he has an invaluable role. The ability to be recognized as advisor and yet not bind the principals permits confidential negotiations to progress while the public stance of the two companies is apparently that of adversaries. Secrecy is vital. Each side in the dialogue must trust the conduit through which the discussions take place. The investment banker maintains the dialogue.
Greenhill, Structuring an Offer, 32 Bus. Law. 1305, 1309 (1977). In this posture of a “dialogue,” with confidential information changing hands and secrecy vital, it appears to me improper for the corporate marriage-broker, a potential insider to both acquiring and target companies, consciously and intentionally to profit from the dialogue.4 For me, this case is distinguishable from the late Judge Gurfein’s Frigitemp Corp. v. Financial Dynamics Fund, Inc., 524 F.2d 275 (2d Cir. 1975), which refused to hold an investment-company debenture buyer accountable for profits realized in connection with the debenture acquisition, even though it had been previously furnished with confidential information. There the information was, as the court’s opinion pointed out, “required” to be disclosed to the investment company for the purpose of selling the debenture to it in an arm’s length transaction. Id. at 279. Here, Olinkraft furnished its projections to Kennecott through Morgan Stanley, only in connection with Kennecott’s contemplated acquisition, and not because it was required to do so but because it evidently wanted to cooperate. Olinkraft instructed Morgan Stanley to return the “Confidential Inside Information” if it was not used for the Kennecott bid. Unlike the defendants in Frigitemp, Morgan Stanley was not a party to the acquisition and received the information strictly as a result of its brokering efforts to bring the parties together.
Nor is this case like those holding that a commercial bank has no fiduciary duty to refrain from financing the takeover of a borrower and that the bank is not precluded from using information from one borrower to evaluate a loan to another. E. g., Washington Steel Corp. v. TW Corp., 602 F.2d 594, 599-604 (3d Cir. 1979), discussed in 14 Ga.L.Rev. 116 (1979); American Medicorp, Inc. v. Continental Illinois National Bank and Trust Co., No. 77 C 3865 (N.D.Ill. Dec. 30, 1977), discussed in Note, Bank Financing of Involuntary Takeovers of Corporate Customers: A Breach of a Fiduciary Duty?, 53 Notre Dame Law. 827 (1978) (financing not a per se breach of fiduciary duty but misuse of confidential customer information may be a breach). The investment bank's role as broker in a friendly takeover and Morgan Stanley’s purchase of Olinkraft stock distinguish this case from the commercial bank situation, even assuming arguendo the correctness of the bank cases’ holdings.
This is not to say that plaintiffs below should be entitled to summary judgment; quite to the contrary, because serious factual issues are presented even reading the complaint in the most favorable light as I have done above. In the first place I wonder how the confidential information — here favorable earnings projections — could be “returned” as the complaint alleges. Surely the pieces of paper on which the projections are written could be returned, but one *803would have to be very naive to think that an experienced analyst would not be able to retain in his memory such favorable projections. I would assume that the highly capable people at Morgan Stanley or any other investment bank have facts and figures floating around in their heads that would on paper constitute the contents of many corporate annual reports.
Moreover, the precise role of Morgan Stanley in the instant transaction may be overstated in the complaint. One gathers that Olinkraft had employed the investment banking firm of Blyth Eastman Dillon & Co., Incorporated (Blyth), to render an opinion in connection with the merger proposals of both Texas Eastern and Johns-Manville. The joint proxy statement does not indicate when Blyth was engaged or whether it was employed in connection with the previous Kennecott tender offer possibility. I would be less inclined to find a fiduciary duty on the basis of Morgan Stanley’s relation as broker to both parties, and the receipt of confidential information, were Olinkraft to have had its own broker on whom it relied for advice in the transaction. Olinkraft’s use of its own broker would lessen the exclusivity and dependence the complaint implicitly alleges in the instant case. The usual other defenses of immateriality, lack of causation and the like are, of course, always open.
Finally, I do not think that considering the complaint to state a claim for relief would overly inhibit investment bankers in a takeover situation. While they surely want to acquire all the information they can, see McAtee, The Role of the Dealer Manager in the Disclosure Process, 32 Bus. Law. 1331, 1332 (1977), perhaps they should acquire confidential information only on the express understanding that it may be utilized in their Arbitrage Department, or that they may turn it over to other clients. Or perhaps they should erect a “Chinese wall” between their Mergers and Acquisitions Department and their Arbitrage Department. While there may be no “general duty between all participants in market transactions to forgo actions based on material, nonpublic information,” Chiarella v. United States, supra, 100 S.Ct. at 1117, the duty here arises from a specific relation and agreement between the parties, at least in my view.
I need not belabor the other points which were briefed and argued but are not addressed in the majority opinion. Since Delaware law requires no allegation of actual injury to the corporation in a derivative action brought to recover profits obtained from a breach of fiduciary duty, Brophy v. Cities Service Co., supra, the conclusion of the court below that plaintiffs lacked standing because no injury to the corporation was alleged is improper. Morgan Stanley also argues that plaintiffs lacked standing to bring this suit because they were no longer shareholders of either Olinkraft or the new Olinkraft as of January 19, 1979. But a Delaware statute, Del.Code Ann. tit. 8, § 261, provides among other things that any civil action pending “by or against” a corporation prior to a merger may be continued in the name of the surviving corporation. In that this action was “pending” at the time Olinkraft was merged into a Johns-Manville subsidiary, and since appellants do own stock in the parent corporation of the new Olinkraft, I think there is standing here under Delaware law. Furthermore, I believe that plaintiffs did comply with the requirements of Fed.R.Civ.P. 23.1, in that they “allege[d] with particularity” their efforts to have Olinkraft directors bring the action. They did telegraph the directors, and it was hardly likely that the directors would sue the investment banker arranging the deal under the circumstances.
With some hesitation, because we are in a rather uncharted area, but with belief in the fundamentally applicable principles, I respectfully dissent.
. Agency law itself suggests that a party not presently in an agency relationship may nevertheless be subject to the same duties not to use or reveal confidential information provided by another party. See Restatement (Second) of Agency § 395, Comment d at 222 (1958) (“A person who, in view of a prospective agency, invites a confidence from or permits the prospective principal to reveal confidential information to him, is subject to the same duties [as in an agency relationship].”).
. The Brophy case finds analogous support in the work of Professor Scott. 70 A.2d at 8 (quoting from 3 A. Scott, The Law of Trusts § 505.1, at 2429 (1939) (discussing employee’s use of employer trade secrets)).
. I extrapolate Morgan Stanley’s agreement from the complaint’s allegations that Olinkraft “instructed” the investment banker on the sole use to which the information could be put. Once Morgan Stanley accepted the information knowing Olinkraft’s terms of transmittal, I would imply its agreement to abide by such restrictions. In this way, perhaps appellants here would have the makings of a breach of contract action, although the damages would admittedly be speculative.
. It is unnecessary here to consider whether a “Chinese wall” could be erected between the Arbitrage Department and the Mergers and Acquisitions Department. That question has yet to be decided by this circuit. Cf. Slade v. Shearson Hammill & Co., 517 F.2d 398 (2d Cir. 1974) (investment broker/securities broker; “Chinese wall” question improvidently certified).