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DeWitt Truck Brokers v. W. Ray Flemming Fruit Co.

Fourth Circuit Court of Appeals
540 F.2d 681 (1976)



W. Ray Flemming Fruit Co. (the corporation) (defendant) acted as an agent for growers of farm products, selling the growers’ products on their behalf. Under its agreement with the growers, the corporation gave the growers the full sale price, less the corporation’s sales commission, and the transportation costs for transporting the products from the growers to the buyers, which was to be given to DeWitt Truck Brokers (plaintiff). Flemming, the corporation’s president, testified that he owned approximately 90 percent of the corporation’s stock, and was unclear as to who the other stockholders, officers, and directors were. There were never any directors’ or stockholders’ meetings. Flemming was the only stockholder or officer to ever receive a salary or dividend from the corporation, or had any say in its operation. Flemming received $15,000 to $25,000 a year at a time when the corporation was not showing a profit and had no working capital, and which payments were not authorized by the board of directors. Flemming does not dispute that the corporation had no capital reserves. DeWitt brought suit, seeking to impose personal liability on the corporation’s president. The district court pierced the corporate veil and imposed individual liability on Flemming. Flemming now appeals.

Rule of Law


Holding and Reasoning (Russell, J.)

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