From our private database of 35,800+ case briefs...
Abercrombie v. Davies
Delaware Supreme Court
130 A.2d 338 (1957)
Eleven investors, including several oil companies, organized American Independent Oil Company (American) to develop an oil concession in the Middle East. All received voting stock. No single stockholder owned a controlling majority. Effectively each stockholder could elect directors to a board of 15. Phillips Petroleum Company (Phillips) held the largest interest, about one-third of the stock. In 1950, president Ralph Davies and five other stockholders (defendants) who together held more than half the stock formed a coalition to keep Phillips from gaining control. The coalition entered an “Agents’ Agreement” that stated intent to gain voting control of American, transferred their stock into escrow, and gave irrevocable voting rights for 10 years to eight agents—the directors those stockholders elected, including Davies. Seven agents had to agree to vote the stock or could withdraw the stock from escrow and transform the agreement into a formal voting trust. A form voting trust attached as an exhibit paralleled the agreement except “agents” became “trustees” who registered stock as trustees and issued voting-trust certificates instead of receipts to stockholders to meet Delaware statutory requirements. Otherwise, the control schemes were identical. The coalition controlled American for nearly five years. In late 1954, two coalition directors switched sides and swung the board vote against the coalition, threatening its control. Coalition members sued for breach in California and obtained a preliminary injunction. Meanwhile, organizer James Abercrombie, Phillips, and another oil-company stockholder (plaintiffs) sued in Delaware and requested summary judgment, arguing the agreement was an illegal voting trust. The judge disagreed and denied summary judgment. Abercrombie and the other claimants appealed.
Rule of Law
Holding and Reasoning (Southerland, C.J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 620,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.Unlock this case briefRead our student testimonials
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.Learn about our approachRead more about Quimbee
Here's why 620,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 35,800 briefs, keyed to 984 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.