Costello v. Skyes

172 N.W. 907 (1919)

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Nature of the Case

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Facts

D owned stock in a Bank. According to the books, the stock par value was $100, but with surplus and undivided profits, the stock was worth $136. D sold the stock to P. When the truth was uncovered the Bank did not have a surplus nor an undivided profit. The Bank employees concealed the true nature of the financial condition, and the stock was worth $60 per share. The employees were insolvent, and there was no way of making good their defalcations. The parties to the sale were mutually mistaken as to the assets of the bank. P then tendered the stock back to D and demanded repayment of the purchase price. D refused and P sued for rescission of the contract for sale.