Magna Weld Sales Co., Inc., a Washington Corporation v. Magna Alloys and Research Pty. Limited, an Australian Corporation

Magna Alloys and Research Pty. Limited, an Australian corporation [Magna], appeals from a judgment against it in an action charging that it fraudulently persuaded H. F. Soderling and his sons, Karle and Charles, to enter an agreement to set up a distributorship for Magna’s welding materials. Three grounds of appeal are argued: (1) that the trial court’s findings of fact are clearly erroneous, (2) that the trial court failed to find three essential elements of fraud, and (3) that the computation of damages is in error. We affirm the finding of liability, but reverse and remand the award of damages for reconsideration.

Stated most favorably to the Soderlings, the facts are these: H. F. Soderling, the principal investor in the distributorship, was first introduced to Magna’s welding products when he witnessed a demonstration of them in San Francisco in September of 1969. Having been in the industrial supply business for over 25 years, but knowing nothing about welding supplies, Soderling thought that branching out into distributing Magna’s welding products would be a good investment. He met with Magna’s representatives the day after the demonstration, and they explained their…