Lexis Nexis - Case Brief

Not a Lexis Advance subscriber? Try it out for free.

Law School Case Brief

State ex rel. Hayes Oyster Co. v. Keypoint Oyster Co. - 64 Wash. 2d 375, 391 P.2d 979 (1964)

Rule:

Directors and other officers of a private corporation cannot directly or indirectly acquire a profit for themselves or acquire any other personal advantage in dealings with others on behalf of the corporation. 

Facts:

State ex rel. Hayes Oyster Co., president, manager, and director, attempted a bail out of Keypoint Oyster Company et al. (Keypoint), and the deal involved a benefit to State ex rel. Hayes Oyster Co., and possession of a percentage of Keypoint’s stock. Keypoint subsequently brought an action to rescind the agreement between the parties and sought to prevent its enforcement and recover any right or interest in the disputed stock. The trial court denied Keypoint any right or interest in the disputed stock but allowed a specific award of stock shares.

Issue:

Was Keypoint entitled to recovery?

Answer:

No

Conclusion:

The court affirmed the portion of the trial court's order denying appellants, oyster corporation and companies, any right or interest in the disputed stock, and reversed the trial court's specific award of stock shares. The Court held that Keypoint was not entitled to the recovery of a $ 5,100 judgment against State ex rel. Hayes Oyster Co. The court  further determined that the agreement between the parties was not void because respondent director did not use undue influence or business compulsion, and respondent director gave valuable consideration.

Access the full text case Not a Lexis Advance subscriber? Try it out for free.
Be Sure You're Prepared for Class