- 11 - Neither buyer nor seller was put back into "the relative positions that they would have occupied had no contract been made." Id. at 181. The parties (petitioners and the IRS) stipulated that the January 3 sales were made without condition. The buyers never relinquished to petitioner the stock purchased on January 3, 1989. Although petitioner purchased 96,600 shares of WalMart stock in December 1989, he stipulated that those shares were not the same shares of stock sold on January 3, 1989. To facilitate the December 28 purchase, petitioner borrowed $1,350,000 from his father. Petitioner did not owe any money to his father for stock purchases prior to the January 3 sale. Even if the parties involved are petitioners and Merrill Lynch, as petitioners contend, the requirements of Rev. Rul. 80- 58, supra, have still not been satisfied. Before the end of 1989, petitioners submitted the rescission claim against Merrill Lynch to arbitration. As an alternative to the unilateral rescission theory, petitioners allege that this claim was the equivalent of application to a court for a decree of rescission because the agreement between petitioners and Merrill Lynch contained an enforceable arbitration provision. Agency 2 sec. 44 (1958) ("If an authorization is ambiguous because of facts of which the agent has no notice, he has authority to act in accordance with what he reasonably believes to be the intent of the principal although this is contrary to the principal's intent"), petitioners would be bound to the January 3 buyers by the apparent authority Merrill Lynch exercised on behalf of petitioners. See 3 Am. Jur. 2d, Agency, secs. 71, 270 (1986).Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 Next
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