In late 1989 or early 1990, plaintiff, Lan England, agreed to sell 258,363 shares of stock to defendant, Eugene Horbach, for $2.75 per share resulting in a total price of $710,498.25. Although the purchase money was to be paid in the first quarter of 1990, the defendant made periodic payments on the stock at least through September 1990. The parties met in May of 1991 to finalize the transaction. At this time, the plaintiff believed that defendant owed at least $25,000 of the original purchase price. The defendant did not dispute that amount. The parties then reached a second agreement whereby the defendant agreed to pay to the plaintiff an additional $25,000 and to hold in trust two percent of the stock for plaintiff. In return, the plaintiff agreed to transfer the stock and to forego his right to sue the defendant for breach of the original agreement.

In December, 1992, the plaintiff made a demand for the two percent stock, but the defendant refused, contending that the two percent agreement was meant only to secure his payment of the additional $25,000. The plaintiff sued for breach of the two percent agreement. Prior to trial, the defendant discovered additional business records which the defendant claimed documented that, before entering into the second agreement, he had actually overpaid the plaintiff for the purchase of the stock. The trial court dismissed plaintiff’s complaint, ruling that plaintiff could not enforce the second agreement as an accord and satisfaction because it was not supported by consideration and because it was based upon a mutual mistake that defendant owed additional money on the original agreement.