Three actions, consolidated by orders of Supreme Court, New York County, are here considered. Involved on *140■the one hand are Alfred and Sidney Manette, and Irving Levinson (the selling stockholders), Stuyvesant Press Corporation, of which the selling stockholders were principals; on the other hand are P & F Industries, Inc. (Industries), its wholly owned subsidiary, P & F Press, Inc. (P & F), Sidney Horowitz and Eugene L. Solomon, who are principals in Industries, and a cluster of other corporate subsidiaries, a recital of which is not essential to disposition of the case. On March 3, 1969, P & F "entered into a written agreement with Stuyvesant’s selling stockholders by which P & F was to acquire the stock of Stuyvesant in exchange for a number of shares of Industries based on the value of Stuyvesant-shar'es as shown by Stuyvesant’s February, 1968 financial statement, warranted by Stuyvesant. P & F was to provide substantial financing for the purchase of new printing equipment, mainly a large press. P & F was to have full access to the books and records of Stuyvesant and representations made in the agreement were to survive any investigation made by P & F prior to closing. It was represented that Stuyvesant had no liabilities save as set forth in the statement, and that the value of its inventory was ‘ ‘ reflected at the lower of cost or market.” It was further agreed that Alfred Manette and Levinson were to be given positions for seven years at $45,000 per annum, guaranteed for the first two years by Industries; the guarantee also covered the sums to be advanced for new equipment. After the closing, $150,000 was advanced to purchase equipment, and $40,000 was loaned to Alfred Manette.
It was ascertained after a short period that the statement of inventory furnished was incorrect. It soon became apparent, as printing work in progress advanced toward delivery, that its selling price would not be high enough to produce expected profits above production cost.. Investigation, inclusive of questioning of Stuyvesant personnel by a P & F representative, disclosed that, indeed, the inventory value had not been stated “ at the lower of cost or market ” but at selling price. When it was further ascertained that Stuyvesant’s statement of liabilities had omitted the amount of salesmen’s commissions, a most important item of production costs, it soon became apparent that the financial status of the newly acquired corporation, as given by the selling stockholders to the purchaser, was, to say the least, distorted. The difference between the projected picture and that uncovered by the investigation was approximately $100,000. Seeking to make the best of a bad bargain, the P & F principals met with the selling stockholders and offered to call the deal off and to afford the selling stockholders an opportu*141nity to restore the advances .and loans received over a period of time. This oral offer of rescission was rejected,, and demand was made for a continuance of the advances. The next step taken was a meeting in September, 1969 of directors of Industries at which formal action to rescind was authorized. The contract required that rescission could be initiated only by a writing.
At this juncture, it should be stated that there is no point in distinguishing action taken by Industries from that taken by P & F Press. The former owned and controlled the latter. Though the contract was made by P & F, Industries cannot be relegated to the status of mere guarantor: it actually provided the finances and made the decisions, some implemented through its vassal, P & F, and some directly. Each must therefore be-considered for the purposes of. this case to be the alter ego of the other.
Before formal action to rescind could be taken, the selling stockholders instituted suit in October, 1969 against Industries and P & F (and several subsidiaries) for breach of contract and breach of the guaranteed employment agreements (Action No. 1). Then the selling stockholders, though they had ceased to be directors of Stuyvesant upon its acquisition by P & F, took steps under the Federal Bankruptcy Act (tit. 11, ch. 11) to adjust the liabilities of that corporation; the immediate tangible result of that action was to bring about a direction by the bankruptcy court to reduce the Manette and Levinson salaries by $15,000 a year to $30,000. Shortly after Action No. 1 was instituted, P & F and Industries (and subsidiaries) sued the selling stockholders and Stuyvesant for rescission, based on fraud and misrepresentation in the inducement, and for monetary damage resulting therefrom. A year later, in a third action, Stuyvesant and an affiliate corporation sued P & F, Industries, and their principals for damage caused, it was alleged, to plaintiffs in that suit as third-party beneficiaries of the contract of purchase by reason of withholding of continued financing of the new equipment, as well as conspiracy to destroy their business. In the interval, in April, 1970, in an endeavor to salvage something of value from the transaction, P & F offered to pay the difference owing to the seller of the new press, the most important item of new equipment, to have it taken over by another subsidiary of Industries, and to. credit Stuyvesant against the advances with the down payments Stuyvesant had made to the supplier of the press; .the offer was refused.
The consolidated cases were tried to the court without a jury. The court found no misrepresentation by the selling stockhold*142ers because P & F had had full access to Stuyvesant’s records; that there had been full disclosure, apparently referring to an alleged oral disclosure concerning salesmen’s commissions; that P & F and Industries did not raise a claim for rescission until they had decided to renege on the agreement; that the chapter 11 move had saved Stuyvesant from disaster brought about by P & F’s willful and intentional breach; that the offer to take over the new press was a gesture in the same direction; that Industries was responsible for the guarantee of the two salaries reduced by the bankruptcy court and was required to pay the difference of $15,000 each ;* that Stuyvesant was damaged to the extent of $100,000, and the advance of $150,000 for purchase of equipment is forfeit, this by some theory of offset which does not deduct the damage awarded to Stuyvesant against Industries; that the $40,000 loan to Alfred Manette is not recoverable because it had been agreed that it is not to be paid until he is permitted to sell his stock in Industries. The decision cannot stand.
Regardless of the motives of the stockholders, the two principal items that were not revealed, whether or not deliberately concealed, are most material to one purchasing a going business because they are basic to whether or not a profit can be made. Access to books and records is not a substitute for required revelation, especially when information furnished has been distorted, and, most particularly, when what is to be found in the books and records is not, unless on the closest and most informed examination, to be substituted for - erroneous information furnished in the form of conclusion, i.e., the inventory figures. And, as to the salesmen’s commissions, an oral statement is no substitute for a written representation in the contract. Further, it must be remembered that the contract provided for survival of the representations even .after investigation. In sum, one does not renege on a contract when, quite obviously, had the truth been known, there would have been no contract. We disagree with other inferences and conclusions, having little to do with credibility evaluations, made by the Trial Justice. The meeting at which an oral rescission offer was made and the offer to take over the new press were apparently seen by him as moves in a conspiratorial process of reneging; we see them as a prudent effort to cut losses. The “damage” assessed against P & F in favor of Stuyvesant is nowhere explained in decision, findings or conclusions; it might have been plucked out of the *143air. Reference is made to an offset, never explained except possibly for the forfeiture of the $150,000 advance, which is not offset. Is it to be concluded that damage, if any, was actually $250,000 of which $100,000 remains after deduction of the advance ? And are Alfred Manette and Levinson to be paid for reduction of their salaries by reason of their own unauthorized act as directors functus officio of Stuyvesant in having sought the processes of chapter 11 ?
The only logical conclusion to be derived from the evidence — and, again, this is not a credibility judgment — is that Industries and P & F are entitled to judgment of rescission in the disclosed circumstances and to be returned to status quo : repayment of $150,000 advanced, deletion of the damages awarded to Stuyvesant, and to Alfred Manette, and Levinson. As to the $40,000 loan to Alfred Manette, the condition precedent to repayment, i.e., sale of the stock of Industries, can never eventuate, and, the transaction as to him being part and parcel of the main transaction, rescission must also necessarily result in complete return of P & F to status quo, and therefore judgment against him for the amount of the loan. The case having been tried non-jury, it is our duty to substitute an appropriate judgment for .that granted by the trial court.
Our disposition is not based in any wise upon errors in the admission of evidence; we have been adverted to none. The trial court did, however, err, in our view, in several important respects: in drawing unwarranted inferences from that evidence; in permitting testimony as to conversations to dominate over written contractual provisions; in apparently considering as •immaterial certain representations to the purchasers, deemed by the parties to be of sufficient importance, they had agreed, to survive inspection by the purchasers; and in failing to give appropriate weight in terms of legal consequence to the writing itself. Therefore we reject those findings and conclusions of the trial court which are not in consonance herewith, for which we substitute those implicit in this decision.
Accordingly, insofar as appealed from, the judgment entered August 2, 1972, should be reversed on the law and the facts in all details thereof, and defendant-appellant-respondent P & F Industries, Inc. should have judgment for rescission of the agreement of March 3, 1969, by reason of misrepresentation in the inducement thereof, and. return to status quo by judgment against defendant-respondent Stuyvesant Press Corp. for $150,000, with interest from the date of advance of each portion thereof, and against defendant-respondent-appellant Alfred *144Manette for $40,000, with interest from the date of payment to him, and otherwise the judgment should he affirmed, without costs. Settle judgment accordingly.
Manette and Levinson, dissatisfied with this award for one year’s reduction only, have cross-appealed to increase this amount.