fix or replace clutch

Greetings, Gurus !

i just joined around Noon today to ask advice, but think i may have used the wrong format, because it is different from this one, so maybe it is languishing in forum Limbo ...,
    I'm the second owner of a 90 Corolla, which a close friend bought new, and it's been well maintained with regular service and repairs.  The only problems were:  1. the A/C went out and several attempts to repair it failed; and 1. it would not shift into 3rd, so bypassed that and went from 2nd to 4th.  I inherited it this way and it seemed to make a smooth transition, as if it were a 3 gear setup.  
However, the garage owner who does most of our repairs, sent it to his trans specialist last year to install a used transmission, but the fellow decided to re-create a linkage for 3rd gear instead, and it has never really worked smoothly since but the job was part of a separate financial deal and so I did not ask for a re-do.

It recently developed problems getting into reverse which quickly worsened to no shifting possible at all, so it was towed to our garage, about mid-October .. After being stymied, they sent it back to their tran-man on Nov 2nd.  
    After 2 weeks or more he told me that when he removed a cap to drain it and take a look, no fluid came out -- nothing but metal shavings, which was how he discovered the seal was bad and there was obviously a leak.  He told me it needed a new seal but that he was checking on another prospect and would report back to me.  I asked whether he could just replace the seal and saturate the gears in fluid and they could work, and he said they were shifting adequately, except 3rd was a bit rough, which i told him had always been the case since he added it.
    After two more weeks, he finally told me on Wednesday afternoon Nov 22nd that he had another toyota whose transmission he thought he might be able to use for my car, and that it was worth $200 to him; he said that the whole bill, including parts and labor, would be $400.  Since I cannot afford that amount right now, he told me the car is driveable and i could pick it up, and bring it back when I get more money.   I drove it about a mile or two and in the morning found all the fluid leaking out. Due to that being Thanksgiving Day, I had to wait till this afternoon to get answers to my calls.  
    It turns out he gave it to me to drive without replacing the seal because he did not think it would leak at such a fast rate, and wanted to save the new seal for after putting in the other transmission.

   It cannot be driven or even put into gear. So, tomorrow I have to tow it (from the driveway of a friend's house where I have been pet sitting, and she returns tonight) and so I wonder what steps you advise.  Is $400 a good deal?  Is it necessary?  Maybe I should not return to someone who would tell me the car is ok to drive when it was not.
     thanks for any ideas.
                             vintage barb