Mayer v. Adams

141 A.2d 458 (1958)

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Nature of the Case

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Facts

P was a stockholder in Phillips Petroleum Company (D). She brought an action to redress alleged frauds and wrongs committed by defendant directors of the corporation. The complaint concerned dealings between D and Ada Oil (D1) in which one of the defendant directors was alleged to have a majority stock interest. An amended complaint set forth reasons why demand on the directors for action would be futile; that was not challenged. It also set forth reasons seeking to excuse failure to demand stockholder action; P charged fraud and no majority of stockholders could ratify such acts, and to require a minority stockholder to circularize more than 100,000 stockholders was to in effect engage in a proxy contest with management. P claimed that such a requirement would be intolerably oppressive and unreasonable and would in any even be futile. Ds moved to dismiss in that the stated reasons were insufficient in law. The complaint was dismissed. P appealed.