Poweroil Manufacturing Co. v. Carstensen

Plaintiff corporation brought this action against the individual members of its board of directors accusing them of giving unlawful preference to themselves when they voted to take quantities of the company’s oil in repayment of their personal loans to the corporation. John M. Eisen, president and majority stockholder, instigated the litigation.

Mr. Eisen had developed a formula for blending oil, a product which he sold largely around Spokane to various garages and automobile dealers under the trade name of “Poweroil.” In February, 1960, he incorporated the business, organizing the plaintiff,…