Western Rock Co. v. Davis,

432 S.W.2d 555 (1968)

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Nature of the Case

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Facts

Davis (P) sued Western Rock (D) and other individuals for negligence in blasting operations. The trial court ruled that Stroud (D1), president of D, and Fuller (D2) who was a director of D, were liable for the torts of D. The facts revealed that D1 and D2 were on the board of D and that D engaged in blasting activities. The physical assets used by D were leased from D2 and D2's family corporation. D2 was in a position to profit if D profited. D2 was also in a position to withdraw all his assets from D if D were insolvent. D2 testified that he was deep into the operations of D as he was basically the man who supplied all the equipment and all the lines of credit. D2 also attended D's board meetings and visited the job site in question on at least three occasions. D2 testified that he was in touch with D1 every day of the week. D1 was aware of the damages from the blasting. Right about that time D began to run into financial difficulties. Lawsuits were filed against D, and the insurance company declared its might not be able to pay for the damages. D1 claimed that he eventually informed D2 of these difficulties about 6-8 weeks later. D1 and D2 then decided to continue the activities despite the lawsuit and the lack of insurance coverage. They continued for another four months. When the claim was submitted to the jury, D2 personally stepped in the next day and took control of D's operations. When the trial was concluded, and the verdict issued against D, all assets of D were assigned to and repossessed by D2's family corporation. D1 became the superintendent of the operation for D2. D1 and D2 were found personally liable. They appealed.