Court: Supreme Court of Arkansas; February 1, 1971; Arkansas; State Supreme Court
Phillip Moore appealed a decision from the Poinsett County Chancery Court, where he sought rescission of a contract and a refund for stock purchased in Glenn Insurance Company, claiming failure of consideration. Glenn Insurance denied this claim, asserting that stock certificates were delivered to Moore, who subsequently requested their cancellation and reissuance to GlenMore Corporation. The chancellor effectively awarded specific performance. Moore's appeal hinges on the alleged error of not rescinding the contract and ordering restitution.
Moore, along with his brothers Jake and Earl, operated a family farming corporation, Moore Farms, Inc., while Glenn Insurance was similarly a family-run entity. Moore purchased 6,000 shares of Glenn Insurance stock for $6,000 on December 1, 1966, followed by an additional 10,000 shares for which he executed a $10,000 note. Despite making multiple requests for the stock certificates, Moore claimed he never received them. He argued that his brother Jake handled some transactions for him and that he was informed by Jake and Howard Glenn, the president of Glenn Insurance, that certificate No. 99 was pledged as collateral for the note.
Moore stopped making payments on the note, asserting he had not received his stock, although payments were made on his behalf by Moore Farms, Inc. Testimony from Forrest Smith, assistant secretary at Glenn Insurance, indicated that certificates for 2,000 shares (Nos. 2 and 72) were issued to Moore in January 1967, and that certificate No. 99 for 6,667 shares was issued shortly after. These certificates were allegedly kept in Moore's personal file, and when offered to him, he declined them. Smith noted that after he left the company, the certificates were marked 'void' and had not been endorsed by Moore. Burl Glenn corroborated Smith's account, stating that Moore was shown the certificates at a board meeting but refused them unless all were provided.
Jake Moore testified about his business associations with his brother, Phillip, and their involvement with Glenn Insurance and the formation of a holding corporation, GlenMore. Both he and Howard Glenn contributed $500 each to GlenMore and received five shares of stock each. Subsequently, this stock was transferred to Moore Farms, Inc. and another entity, 'Insurance Service,' owned by the Glenns. Approximately 147,000 shares of Glenn Insurance Company stock were either canceled and reissued or transferred to GlenMore, with Phillip Moore’s original stock certificates being marked void and reissued to GlenMore without his authorization. Jake expressed confusion over these transactions, and a pending lawsuit exists between him and Howard Glenn regarding the dissolution of GlenMore, with disputes over the retransfer of Glenn Insurance stock. The record lacks clarity on the solvency of Glenn Insurance or whether its stock was fully issued. Phillip purchased $16,000 worth of stock, but the related certificates were never delivered to him and were voided before he received them. The appellee insurance company indicated its readiness to reissue the stock to Phillip upon direction. The chancellor ruled that Glenn Insurance must issue stock certificates to Phillip Moore, and this decree was affirmed, as there was sufficient evidence to support it.
