Champlin v. Transport Motor Co.

March 19, 1932, the plaintiff bought from defendant a Hupmobile. The parties executed a conditional bill of sale containing the following stipulation:

"No warranties, representations or agreements have been made by the seller unless specifically set forth herein."

The contract recited a cash payment of four hundred dollars (which it is conceded was made as an allowance on an old car traded in), and provided for six monthly payments of forty dollars each. The balance, $783.56, was due and payable November 1, 1932.

Shortly after its execution, the defendant sold its interest in the contract to Commercial Credit Company. On November 21st, plaintiff having failed to pay the balance of the purchase price, as provided in the contract, Commercial Credit Company repossessed the car. Thereafter, plaintiff commenced this action for damages against defendant, alleging:

"That plaintiff was induced and intimidated and compelled to enter this contract, first, by representations of E.P. Olson, defendant's agent, that his connections with the defendant corporation would be immediately severed unless he entered the agreement; second, that the defendant corporation would assist plaintiff to resell the car on or before September 1, 1932, and that they would save him harmless from any monetary loss arising from the purchase aforesaid."

Plaintiff, testifying in support of those allegations, said that he had entered the employ of defendant as a salesman on January 5, 1932; that the term of his employment was indefinite; that his compensation was to be ten per cent on gross sales made by him, less freight; that, about two weeks prior to March 19th, the manager of defendant informed him that, in order to hold his job, he would have to buy a new car; that he did not want to buy a new car, but, in order to hold his job, he entered into the contract of March 19th, upon the assurance that defendant "would save him harmless from any monetary loss arising from the purchase" of the new car. All of these alleged representations and promises were made prior to the execution of the written contract. Plaintiff took possession of the car and drove it more than six thousand miles prior to the time it was repossessed by Commercial Credit Company.

The trial court, in a memorandum opinion, said:

"Plaintiff was not compelled to buy. He acted as a free agent, actuated no doubt by the promises above mentioned. There was no false representation of any existing or past fact made by defendant's agent in reliance upon which plaintiff bought the car."

Nevertheless, it entered judgment for plaintiff in the sum of five hundred dollars. The majority of this court now sustains that judgment. This holding, I believe to be utterly without precedent and without reason. The effect of the holding is simply this: The rights of the vendor and the obligations of the vendee under a written contract are, in the absence of fraud, accident, mistake or duress, completely ignored and held for naught. Not only that — obligations are imposed on the vendor and rights are conferred on the vendee under a prior oral contract covering exactly the same subject matter. In other words, the court refuses to enforce the obligation of the vendee under the written contract to purchase the car, and at the same time imposes on the vendor an obligation (in substance) to buy it back under a priororal contract.

The justification for this abandonment of fundamental principles of the law of evidence and contract is "business compulsion." Until recently, unambiguous contracts could be enforced, in the absence of fraud, accident, mistake or duress. There is now in the course of development something that is neither fraud, accident, nor mistake, and which falls short of duress, whereby courts are disposed to relieve persons of plain and unambiguous obligations arising under contracts. It is this thing called "business compulsion." It has not reached a stage of development where it is subject to definition.

Until now, I had supposed that "business compulsion" existed only in cases where a party to a contract failed to assert an existing right because of fear of injury from the threatened summary exercise of illegal power held over him by the other party to the contract. But now the majority extends the doctrine to relieve the plaintiff of obligations under a written contract which, in entering into, he had no existing right to protect. For he testified that his employment was not for a fixed term. Furthermore, as a matter of law, his employment could have been terminated at any time by the corporation, even though by its terms, it had been for a definite time. Williams v. GreatNorthern Ry. Co., 108 Wash. 344, 184 P. 340; Hansen v.Stirrat Goetz Investment Co., 144 Wash. 118, 256 P. 1033. In other words, plaintiff, in executing the written contract, did not forego the assertion of any existing right. The defendant had the right to discharge him, and he had the right to quit.

Business compulsion may, in the course of development, become a salutary instrumentality for justice. It cannot become such, as applied in this case. Here it serves quite the opposite purpose, in that it undermines the stability of written contracts, and completely abrogates the parol evidence rule.

MAIN, MILLARD, and STEINERT, JJ., concur with BLAKE, J.