Percival v Wright [1902]

Illustrates
basic principle that directors owe their legal duties to company rather than
shareholders.
Shareholders
wrote to company secretary asking if he knew anyone likely to buy their shares.
Chairman
and two other directors purchased shares.
Shareholders
subsequently discovered that third party offer to purchase company was already
on table, to knowledge of chairman and directors.
This
offer meant shares worth much more than what chairman and directors had paid.
Shareholders
asked for sale to be set aside on ground chairman and directors had been in
breach of duty to shareholders.
Swinfen-Eady
J refused.
No
duty owed by chairman and directors to shareholders.
Their
duties were owed to company.
[This
situation may now be covered by s459 remedy]