Petit v. Liston
1920 Ore. LEXIS 251, 191 P. 660, 97 Or. 464 (1920)
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Rule of Law:
When a minor has entered into a fair and reasonable contract and was not overreached, the minor cannot recover the amount paid upon disaffirmance without allowing the vendor reasonable compensation for the use and depreciation of the property while in the minor's possession.
Facts:
- A minor entered into a contract to purchase an article.
- The contract was fair and reasonable, and the seller did not engage in any fraud, imposition, or undue influence.
- The minor paid money toward the purchase price.
- The minor took possession of the article and used it.
- As a result of the minor's use, the article depreciated in value.
- The minor subsequently sought to disaffirm the contract and recover the full amount of money paid.
Procedural Posture:
- A minor plaintiff filed a lawsuit in a trial court against a vendor to recover money paid pursuant to a contract.
- The trial court entered a judgment in favor of the vendor, which denied the minor a full recovery of the purchase price.
- The minor plaintiff appealed the trial court's judgment to this appellate court.
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Issue:
Does a minor who disaffirms a contract for the purchase of an article have the right to recover the full purchase price paid without accounting for the value of the use and depreciation of the article while it was in their possession, assuming the contract was fair and the minor was not defrauded?
Opinions:
Majority - Bennett, J.
No. A minor who disaffirms a fair and reasonable contract cannot recover the full amount paid without allowing the seller reasonable compensation for the use and depreciation of the article. The court acknowledges a significant split of authority on this issue but chooses to adopt the rule it finds more equitable and better suited to modern conditions. It rejects the view that a minor can use an article until it is worn out and still recover the full price, reasoning that such a rule encourages dishonesty. Instead, the court follows the principle articulated by Chancellor Kent that the privilege of infancy is to be used as a 'shield and not as a sword.' This rule protects minors from unfair contracts while promoting integrity and fairness to business people who deal with minors in good faith.
Analysis:
This decision establishes a significant precedent in this jurisdiction by rejecting the traditional, strict rule that allowed minors to disaffirm contracts and recover all consideration without liability for depreciation. By adopting the more modern, equitable 'benefit rule,' the court shifts the law to balance the protection of minors with the prevention of injustice to vendors. This ruling requires courts to engage in a factual inquiry into the fairness of the contract and to calculate the value of the benefit the minor received. It makes rescission less of a potential windfall for the minor and provides a measure of protection for merchants who deal fairly with underage customers.
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