Montgomery v. Hughes Developers, Inc.

The plaintiff, Mays E. Montgomery, appeals from the judgment of the trial court finding that Montgomery could not recover from the defendant corporation, Hughes Developers, Inc. ("Hughes"), for its issuance of a spurious stock certificate, which Montgomery took as collateral to secure a personal loan he made to the president of Hughes Developers. We affirm in part, reverse in part, and remand.

I. Facts

On May 20, 1991, Mays E. Montgomery lent Morris W. Frank $100,000; to secure that loan Frank executed a promissory note, which contained a notation stating that "(5%) 50 shares of Hughes…