First Federal Savings and Loan Association v. Twin City Savings Bank, Fsb, and Twin City Savings Bank, Fsa

ALVIN B. RUBIN, Circuit Judge:

The issue presented is whether, under the pre-1985 provisions of the Louisiana Civil Code, a contract may be rescinded for fraud when the party seeking rescission was negligent in not investigating the misrepresentations.

I

First Federal Savings and Loan contends that Twin City Savings Bank fraudulently deceived it when Twin City sold First Federal a participation in a loan, known as the “Sea Oats” loan. First Federal seeks recision of the contract and return of the purchase price, or, alternatively, damages.

Twin City Savings Bank, which has its main office in…