Remillard-Dandini Company and its wholly owned subsidiary, San Jose Brick & Tile, Ltd. (the manufacturing companies) (defendants) manufactured bricks. Stanley and Sturgis (defendants) controlled a majority of Remillard-Dandini Company and were officers of the manufacturing companies. Stanley and Sturgis also controlled and managed Remillard-Dandini Sales Corporation (the sales corporation) (defendant). Stanley and Sturgis set up a transaction under which the manufacturing companies would sell bricks to the sales corporation. Remillard Brick Company (Brick) (plaintiff) was a minority shareholder of Remillard-Dandini Company. Brick alleged that the directors of the manufacturing companies deprived the companies of their sales function and thus allowed Stanley and Sturgis to gain profits that should have gone to the manufacturing companies. Stanley and Sturgis argued that the transaction was valid, because the common directorship was disclosed to the shareholders, and a majority of the shareholders approved the transaction.