Pennington Trap Rock Co. v. Pennington Quarry Co

In Pennington Trap Rock Co. v. Pennington Quarry Co., 22 N.J. Misc. 318, 38 A.2d 869 (Sup.Ct.1944), defendant Gilbert was the sole stockholder in a corporate defendant which had leased a quarry and its operating equipment from plaintiff. Plaintiff sued the corporate tenant for breach of contract, but in separate counts of the complaint, also charged Gilbert with tortious actions taken to damage plaintiff's property and business interests. It claimed that Gilbert had directed the "demolition of parts of the machinery and equipment leased to the corporate defendant" and caused damage to the buildings and the quarry equipment which had depreciated the value of the leased property. It also charged Gilbert with doing that in order to establish a crushed stone monopoly, and "to eliminate plaintiff as a future competitor." Id. at 319-20, 38 A.2d 869. Pennington is consistent with the general rule that absolves a corporate officer from breach of contract liability when he acts for what he conceives to be the best interest of the corporation. It suggests a possible imposition of tort liability against an individual officer or director for "wrongful" (that is, tortious) activity only where such activity goes well beyond mere breach of contract.