Court Opinion

ID: 9601046
Source: CourtListenerOpinion
Date Created: 2023-08-22 01:35:46.323565+00
Date Added: 2024-06-11T09:48:46.666805
License: Public Domain

Hill, J.
(concurring in the result) — I concur in the result. There is no question but that fraud vitiates a contract; and that, as a general rule, a party to a written contract is not foreclosed by a merger clause from proving fraudulent representations made by the other party, or his agent acting within the scope of his authority.
I cannot agree with the majority in its statement that, in view of our holding in Haagen v. Landeis (1960), 56 Wn. (2d) 289, 352 P. (2d) 636, the trial court had no alternative but to enter the judgment we are now reversing. The majority, in its treatment of the Haagen case, sets up a straw man and, then, proceeds with a devastating demolition.
*390It'was never intended that Haagen should overrule sub silentio or any other way the cases enumerated in footnote 2 of the majority opinion, or that it would apply in a case like the present, where no one questions the authority of the agents who made the representations relied on.
Haagen has a very limited application, so far as the merger clause is concerned, and relates to cases where the issue is the authority on the part of an agent (whose misrepresentation is the basis of the claimed fraud) to vary by parol the plain and unambiguous provisions of a written application prepared by his principal. None of the cases listed in the footnote to which we have referred presents such an issue.
Haagen was an action to recover the agreed price of certain advertising. The defendants testified that certain misrepresentations were made by an agent who was urging them to list their properties for sale in a publication called the “National Buyers’ Guide.” The merger clause3 in no way limited the defendants in their proof. The issue was whether, having signed a short and simple application (set out in full in the opinion) for space in that publication, which application clearly stated the amount to be paid and the time of payment, the defendants were entitled to rely on representations by the agent which were that they would not have to pay for the advertising unless they sold their property.
The defendants knew that they were dealing with an agent, and their contention was that he had apparent authority to vary the terms of the application for advertising. There was no evidence of any such authority, except the representations of the agent.
The representations by the agent were not about something extraneous to the writing, but in effect were that the plain and unambiguous provisions relative to payment, contained in the application, did not mean what they said. *391It is difficult to see how a publishing company could do more to make clear the limitation on the authority of an agent soliciting advertising than by limiting the agreement with the advertiser to the application which the advertiser signed. This was not a contract until the application was accepted by the publishing company, and the advertiser could have refused to sign the application unless it contained the terms to which he agreed. The publishing company had nothing to act upon except the application submitted to it.
There is still another reason why the Haagen case was correctly decided. The defendants — after the application for advertising space had been sent to the publishing company — notified that company of the claimed representations by its agent and, then, within 2 or 3 days after this notification, the defendants sent the company the following letter:
“ ‘This note is [to] cancel expressed misunderstanding recently sent you. Please continue service on regular schedule.’ ”
The Haagen opinion states:
“ . . . The letter withdrew respondents’ previous objections to the contract as written and requested performance as provided therein.”
Haagen held:
1. To prove fraud, the person claiming a misrepresentation must prove that he had a right to rely thereon.
2. Where the claimed misrepresentation is made by one known to be an agent, there can be no right to rely thereon, unless the agent was acting within the apparent scope of his authority.
3. Under the circumstances of the case, there being no evidence of apparent authority to vary the printed application for advertising except the fact of agency, the statement in the application that
“. . . ‘This Agreement contains the entire understanding between us and no representation or inducement has been made that is not set forth herein.’ . . . ”
*392conclusively negated the claimed apparent authority of the agent to modify the application orally. (The word “conclusively” was properly used in that case. bécause there was no evidence to the contrary.)
4. The persons claiming fraudulent representations had failed to prove their right to rely thereon by clear, cogent, and convincing evidence.
5. The persons claiming misrepresentations had specifically withdrawn their objection to the agreement claimed to be procured by fraud.
In my opinion, Haagen was correctly decided. Two statements in that; opinion, taken out of context, are the reason for its repudiation by the majority:
A. Since the oral representations, upon which defendants relied, were not. contained in the agreement and, in fact, contradicted the plain and unambiguous provisions thereof, they had no right to rely thereon.
B. The written agreement conclusively negates the alleged apparent authority of the agent to modify the agreement orally.
“A” would not be an accurate statement, if the representations had been made by a party to the agreement or by an agent whose authority to make them was not questioned, or by an agent who had apparent authority to make them. Considered in the context, the defendants in Haagen had no right to rely upon such representations because the agent had no apparent authority to make them. Actually, the merger clause alone is unimportant to a cause of action for fraud, except to the extent that it, together with other language in the contract, shows an absence of apparent authority (as in Haagen), or the presence of that authority, which is conceded in the instant case.
With reference to “B,” we have already commented on the justification for the use of the word “conclusively.”
The court has properly decided this case upon its facts, as it did the Haagen case upon its facts.
Ott, C. J., concurs with Hill, J.

The merger clause in the application for the advertising read: “ ‘This Agreement contains the entire understanding between us and no representation or inducement has been made that is not set fort[i herein.’ ”