United Merchants & Manufacturers, Inc. v. Sanders

In United Merchants & Manufacturers, Inc. v. Sanders, 508 So. 2d 689 (Ala. 1987), the Court reiterated the long-standing principle regarding the issue of personal liability of corporate officers, stating: "Fletcher's Cyclopedia of Corporations 1135, at 267-68 (1986) summarizes the general rule as to liability of directors and officers to third persons for torts as follows: "'It is thoroughly well settled that a person is personally liable for all torts committed by him, consisting in misfeasance -as fraud, conversion, acts done negligently, etc. -- notwithstanding he may have acted as the agent or under directions of another. And this is true to the full extent as to torts committed by the officers or agents of a corporation in the management of its affairs. The fact that the circumstances are such as to render the corporation liable is altogether immaterial. ... Corporate officers are liable for their torts, although committed when acting officially. ... This rule does not depend on the same grounds as "piercing the corporate veil," that is, inadequate capital-ization, use of the corporate form for fraudulent purposes, or failure to comply with the formalities of corporate organization. This principle is applicable to directors, officers, and agents of a corporation when funds entrusted to it have been converted, even though they were used for the benefit of the corporation and not the officers concerned. They are liable for their torts regardless of whether the corporation is liable....'" (Id. at 691.)