Halbman v. Lemke
99 Wis. 2d 241, 298 N.W.2d 562 (1980)
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Rule of Law:
Absent misrepresentation or tortious damage to property, a minor who disaffirms a contract for a non-necessary item is entitled to a full refund of the purchase price without liability for use, depreciation, or damage to the property.
Facts:
- On July 13, 1973, James Halbman, Jr., a minor, entered into an agreement to purchase a 1968 Oldsmobile from Michael Lemke for $1,250.
- Halbman paid $1,000 upfront and took possession of the car, with an agreement to pay the balance in weekly installments.
- After paying a total of $1,100, a connecting rod on the vehicle's engine broke about five weeks after the purchase.
- Halbman had the vehicle repaired at a garage, incurring a bill of $637.40, which he did not pay.
- In October 1973, Lemke transferred the vehicle's title to Halbman to avoid liability for its use.
- On October 15, 1973, Halbman, through a letter, returned the title to Lemke, disaffirmed the contract, and demanded a full refund of the $1,100 paid.
- The vehicle remained at the repair shop, which eventually removed the engine and transmission to satisfy a garageman's lien.
- The garage then towed the unsalvageable remains of the vehicle to the home of Halbman's father, where it was further vandalized.
Procedural Posture:
- Halbman (plaintiff) initiated an action against Lemke (defendant) in the circuit court for Milwaukee County for the return of the $1,100 purchase price.
- Lemke counterclaimed for $150, the amount still owing on the contract.
- The trial court granted judgment in favor of Halbman.
- Lemke (appellant) appealed the judgment to the court of appeals.
- Halbman (cross-appellant) cross-appealed regarding the date from which interest should be calculated.
- The court of appeals affirmed the trial court's decision on the restitution issue but reversed on the interest issue.
- The Supreme Court of Wisconsin granted review to decide the restitution question.
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Issue:
Does a minor who disaffirms a contract for the purchase of a non-necessary item have to make restitution to the vendor for damage sustained by the item prior to the disaffirmance?
Opinions:
Majority - Callow, J.
No. A minor who disaffirms a contract for a non-necessary item is not required to make restitution for damage or depreciation that occurred before the disaffirmance. The court reasoned that the long-standing infancy doctrine is designed to protect minors from improvident contracts. Upon disaffirmance, a minor must restore as much of the consideration as remains in their possession (a return in specie), but their right to disaffirm is not contingent on making the vendor whole. To require a minor to compensate for diminished value would effectively bind them to a part of the obligation the law permits them to avoid. This rule applies unless the minor misrepresented their age or committed tortious damage to the property, neither of which occurred in this case. The court rejected approaches from other jurisdictions that would force the minor to bear the cost of the very improvidence from which the doctrine is supposed to provide protection.
Analysis:
This decision reaffirms the traditional, protective scope of the infancy doctrine in Wisconsin, establishing a bright-line rule that favors the minor. It squarely places the risk of loss from depreciation or damage onto the adult party who contracts with a minor for non-necessities. By doing so, the court clarifies that the minor's duty is one of restoration (returning what is left), not restitution (compensating for loss). This precedent solidifies the principle that, absent tortious conduct, a vendor cannot recoup losses for damage, effectively treating such losses as a cost of doing business with minors.
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