Nyquist v. Foster

• Court: Washington Supreme Court
• Writing for the Court: FINLEY; GRADY
• Citation: Nyquist v. Foster, 268 P.2d 442, 44 Wn.2d 465 (Wash. 1954)
• Decision Date: 29 March 1954
• Docket Number: No. 32481
• Parties: NYQUIST, v. FOSTER et ux.

Page 465

44 Wn.2d 465

268 P.2d 442

NYQUIST, v. FOSTER et ux.

No. 32481.

Supreme Court of Washington, Department 2.

March 29, 1954.

Henry C. Perkins, Tacoma, for appellants.

Goodwin & Hicks, Tacoma, for respondent.

FINLEY, Justice.

Virgil Nyquist brought this action to rescind the sale of a trailer which he purchased from appellants, Lloyd Foster and Alice H. Foster, doing business as the Sparlux Sales Company. The trial court, sitting without a jury, held that the sale had been induced by fraudulent misrepresentation, and that Nyquist was entitled to rescission.

Foster is a dealer for the Spartan Aircraft Company, a manufacturer of trailers. In the fall of 1951, Nyquist, desiring to buy an aluminum sidewall trailer, called at Foster's place of business in south Tacoma. At that time, Foster had no aluminum trailers for sale, but endeavored to interest Nyquist in a masonite sidewall trailer. Nyquist were reluctant to purchase anything but an aluminum trailer, and expressed his concern that the masonite sidewalls might buckle and warp. He visited Foster's place of business at least eight times before he signed an order for a trailer. On at least four occasions, he asked Foster whether the masonite sidewalls would buckle or warp. In reply, Foster explained that the Spartan Aircraft Company had spent thousands of dollars in research and had developed a process for treating the masonite, preventing it from warping. He showed Nyquist a pamphlet describing the process.

Nyquist testified that Foster 'definitely stated that it would not warp, absolutely.' Mrs. Nyquist corroborated this testimony of her husband. Foster admitted that Nyquist had asked him directly if the trailer would warp or buckle. Foster denied that he had answered directly. According to his testimony, Foster had made a somewhat oblique reference to the process used to fortify the masonite and the warranty of the manufacturer. In this connection, it should be mentioned that the trial court found that Foster had siad trailer would not warp.

On January 4, 1952, Nyquist paid $3,500 down, and signed a conditional sale contract for the balance due on a masonite sidewall trailer. Three days after delivery of the trailer to Nyquist, the masonite sidewalls began to warp and buckle. The warping continued, but varied in degree according to the weather. At times the masonite warped as much as two inches between the ridges and the depressions. Foster testified that it would cost three hundred to four hundred dollars to replace each sidewall.

Nyquist reported the warping to Foster and demanded a new trailer. The manufacturer was notified. After some delay, two factory field representatives called on Nyquist. At that time, Nyquist demanded that his money be returned. The representatives asked him if he desired to have the trailer repaired and he answered that he did not. (At the trial he explained his position by saying he had purchased a new trailer and did not desire a remodeled one.) There was a conflict between the testimony of Nyquist and Foster as to whether the factory representatives offered to replace the trailer. The representatives were not present to testify.

On February 14, 1952, Nyquist made written demand for the return of his money and, shortly thereafter, had the trailer hauled to Foster's trailer yard where it was left.

Nyquist had made one payment of $66 in February. In May, after an unsuccessful demand for payments had been made by the Minnehoma Financial Company (assignee of the conditional sales contract), Foster repurchased the contract. Later in the same month, he resold the trailer as a used one.

The first major contention of appellants relates to a clause, inserted in both the written order and in the conditional sales contract, disclaiming all 'warranties, express or implied representations, promises or statements' made by the seller, except those endorsed thereon. Appellants argue that, because of this clause the trial court erred in admitting evidence that Foster had made a warranty. Appellants also contend that this clause in the contract expressly prevents any cause of action, based upon parol warranties or representations, from arising. The argument assumes that respondent's action is based upon breach of a contractual warranty. It is clear, however, that respondent's theory, both in the trial court and here, is that of fraudulent misrepresentation. A contention nearly identical to appellants' contention was presented to this court in Producers' Grocery Co. v. Blackwell Motor Co., 123 Wash. 144, 212 P. 154, 155. Therein it was said:

'* * * It is claimed by appellants that the oral testimony with reference to the representations alleged to have been made by the appellant Solberg was not admissible because it tended to vary and contradict the terms of the written order. If the oral testimony had been with reference to oral warranties, then the rule contended for by appellants would be applicable, but it is inapplicable as against testimony tending to show fraud or false representations which were relied upon, and which entered into the making of the contract of purchase. Fraud vitiates everything it touches, and is not merged in the written contract. Schroeder v. Hotel Commercial Co., 84 Wash. 685, 147 P. 417; Wells v. Walker, 109 Wash. 332, 186 P. 857; 22 C.J. 1215; 10 R.C.L. 1058.' See, also, Peoples Bank & Trust Co. v. L. Romano Eng. Corp., 188 Wash. 290, 62 P.2d 445, 65 P.2d 688; Weller v. Advance-Rumely Thresher Co., 160 Wash. 510, 295 P. 482; 3 Williston on Sales 435, § 631b.

Appellants' principal assignments of error, directed to the findings of the trial court on the issue of fraud, challenge three essential findings, summarized as follows:

(1) That appellant, Lloyd Foster, said the masonite sidewalls would not warp;

(2) That respondent relied on the statement; and

(3) That the warping caused material damage to the trailer.

Respondent's unequivocal testimony, as well as that of his wife, support the finding that the representation was made.

On the question of reliance, respondent testified that, without the assurance from appellant Foster that the masonite would not warp, he would not have purchased the trailer. This testimony was strengthened by the admissions of appellant Lloyd Foster that respondent first tried to buy an aluminum trailer, and only after extended inquiries and explanations concerning the qualities of masonite did he agree to buy a trailer with masonite sidewalls.

On the issue of damage, appellants admitted that the trailer warped rather badly and that the factory representatives believed an adjustment was in order. Appellant Lloyd Foster testified that replacement of the sidewalls would cost from three hundred to four hundred dollars per side. Having admitted all of this, his testimony that the warping later cleared up (subsequent to respondent's demand for rescission and the return of the trailer) does not effectively impeach the finding that the warping caused material damage. This improvement in the warping may have been due to improved weather, so far as the evidence reveals. The susceptibility of the trailer to warping was not a disputed fact.

There was clear, cogent, and convincing evidence to support all of the findings of the trial court which pertained to fraudulent misrepresentation.

Appellants next challenge the conclusion of law, 'That the plaintiff was entitled to rescind the contract...