Add focus to drag code so the objects won't interfere with each other while dragging on the screen.

dragfocus.lua

-- create objects
local rect1 = display.newRect( 0, 0, 100, 100 )
local rect2 = display.newRect(300,300, 50,50)
 
-- touch listener function
local function move(self, event )
  if event.phase == "began" then
		--set focus on touched object so it won't interfere with other display objects.
		display.getCurrentStage():setFocus( self, event.id )
		self.isFocus = true
		--store the first location of the object 
		self.x0 = self.x -- store x location of object
		self.y0 = self.y -- store y location of object

	elseif event.phase == "moved" then
		--add the amount of distance that you move the object, to first location of the object
		local x = (event.x - event.xStart) + self.x0
		local y = (event.y - event.yStart) + self.y0
		self.x, self.y = x, y -- move object based on calculations above
	
	elseif event.phase=="ended" or event.phase=="canceled" then
		--remove the focus on the object
		display.getCurrentStage():setFocus( self, nil )
		self.isFocus = false
	end
	return true
end
 

rect1.touch=move
rect2.touch=move
rect1:addEventListener( "touch", rect1)
rect2:addEventListener("touch", rect2)