Webster v. L. Romano Engineering Corp. , 178 Wash. 118 ( 1934 )

It is plain that the majority utterly disregard the force and effect of all of our cases holding that fraud vitiates everything it touches, and is not merged in the written contract. Dieterichv. Rice, 115 Wn. 365, 197 P. 1; Little Co. v. Fynboh,120 Wn. 595, 207 P. 1065, 211 P. 766; Titan Truck Co. v.Richardson, 122 Wn. 452, 210 P. 790; Producers Grocery Co.v. Blackwell Motor Co., 123 Wn. 144, 212 P. 154; Long v.Five-Hundred Co., 123 Wn. 347, 212 P. 559; Pratt v.Thompson, 133 Wn. 218, 233 P. 637; Leschen Sons Rope Co.v. Case Shingle Lumber Co., 152 Wn. 37, 276 P. 892;Nelson Co. v. Goodrich, 159 Wn. 189, 292 P. 406; Weller v.Advance-Rumely Thresher Co., 160 Wn. 510, 295 P. 482;Marion Steam Shovel Co. v. Aukamp, 172 Wn. 455,20 P.2d 851.

Furthermore, the majority opinion is based upon the false premise that there was no misrepresentation as to an existing fact. The existing fact alleged was that the grader was capable, adequate and sufficient for operating in hard and wet earth and gravel as well as in soft earth, as it was in that kind of earth it was desired to operate it in Mount Baker National Park and elsewhere in Washington. That was not a mere promise or representation of what the promissor would do in the future, but what its implement could and would do in the present. Neither is it material that it was not sold by the manufacturer itself, but by its dealer, any more than it was material in the Weller or the Aukamp cases, supra.

The cases of Eilers Music House v. Oriental Co., 69 Wn. 618,125 P. 1023; Winton Motor Carriage Co. v. Blomberg,84 Wn. 451, 147 P. 21, were not cases where it was alleged in the pleading of the vendee that false and fraudulent representations entered into and induced the making of the contract.

In a case very similar to this, Jones v. Brandt,173 Wis. 539, 181 N.W. 813, that court, which is one of the courts of highest repute in the land, announced the same rules that we have followed where false representations enter into, and induce the making of, the contract. There, the purchaser brought an action to rescind a contract for fraud inducing its execution, to retrieve the amount paid, and also counterclaimed for damages for the amount which he had expended in testing the dredge. The court held that the testimony that the sale of the dredge was fraudulently induced by representations as to the capacity of the dredge and the equipment thereon was admissible to prove fraud, notwithstanding the provision of the contract that it embodied the entire understanding between the parties, and that the seller's liability should not be affected by any statement or representation not contained therein. It further held that the seller's representations that the dredge was of a kind and construction such as to properly do the work desired and that it was equipped with an engine of a particular kind and capacity, were actionable, as they were not mere expressions of opinion. (Italics mine). The court there said:

"Appellants assign as error the admission of testimony as to the representations made at the time of the sale of the dredge. It is urged that the admission of the evidence violated the parol-evidence rule, and that it was especially objectionable by reason of the clause in the contract purporting to exclude such representations. This testimony was offered and admitted on the theory that it tended to prove the allegations of the cross-complaint that the representations were fraudulently made and for the purpose of inducing defendants to enter into the contract. . . .

"It is argued that the representations only related to the warranties in the written agreement. The only warranties in the very elaborate agreement were that the machine would excavate thirty yards an hour, and that it was of good workmanship and material. The representations above stated relate to various collateral facts not mentioned in the agreement.

"We cannot concur in the view that a party to a contract can exclude fraudulent representations made to induce the contract itself by inserting a clause that the agreement shall be the sole evidence of the transaction. Such a theory would permit the most flagrant frauds by an easy device. It is the well settled rule of this state that it is competent to show by parol that a contract was entered into relying on fraudulent representations. [Citing cases.] . . . We are satisfied that there were such statements concerning matters both of fact and opinion that they were properly submitted to the jury. Some of the statements related to existing facts as to which plaintiffs had, or ought to have had, superior knowledge, and they were statements on which defendants had the right to rely.

"The jury and the court found that it was represented that the dredge was of a kind and construction such as to properly do the work desired; that the machine was equipped with a kerosene engine of ample capacity for operating all motions either independently or simultaneously; that it was equipped with a traction mechanism sufficient to propel or move it by means of the power of the engine; that the machine could be set up or taken down in 3 days; that the defendants relied on the representations and that they were false.

"While it is true that mere promises are not a basis for fraud, and that ordinarily fraud cannot be predicated on mere expressions of opinion, yet it is well settled that statements taking the form of expressions of opinions may under some circumstances be treated as statements of facts. [Citing cases.]"

The decision of the majority in this case is contrary to our own rule of decision and to the great weight of authority in all of the states.

The judgment should be reversed, and the cause remanded for further proceeding.

BEALS, C.J., MITCHELL, and TOLMAN, JJ., concur with HOLCOMB, J.