Quality Motors, Inc. v. Hays
225 S.W.2d 326, 216 Ark. 264, 1949 Ark. LEXIS 910 (1949)
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Rule of Law:
An infant (minor) may disaffirm a contract for a non-necessary item without being required to return the consideration received in its original condition, except for any part remaining in specie in their hands, especially when the adult seller refused to accept the item's return. The minor is not liable for damages to the property occurring while they still held title, as their possession is not considered conversion if the seller refuses acceptance.
Facts:
- On January 21, 1949, sixteen-year-old Johnny Hays went to Quality Motors, Inc. to inspect and test a Pontiac car.
- Salesman E. C. Buttry refused to sell the car to Johnny due to his age, stating the purchase must be made by an adult.
- Johnny returned shortly with Harry R. Williams, a 23-year-old man he had just met, and Johnny gave Quality Motors, Inc. a cashier's check for $1,800, payable to him, for the car.
- A bill of sale was made to Harry Williams, who then transferred title to Johnny, and the car was delivered to Johnny at Arkansas State College.
- On the night of January 25, 1949, Johnny's father, Dr. Hays, learned of the purchase and contacted Quality Motors, Inc., asking them to take the car back, which they refused to do over several conversations on January 26 and 27.
- On February 12, 1949, while Dr. Hays was out of town, Johnny took the car to Kentucky and later, on March 21, returned to Jonesboro after the car had been involved in a wreck.
- During a conversation on March 21, Buttry and Ebbert of Quality Motors, Inc. tried to persuade Johnny to leave the car for repairs 'until this thing is settled,' but Johnny immediately departed for Kentucky, where the car was involved in a second, more serious wreck.
- At the time of trial, the car was in Kentucky, subject to a repair bill for $557 and an attachment for $125, and was not in running condition.
Procedural Posture:
- Johnny M. Hays, by his next friend Dr. D. J. Hays, initiated a lawsuit in a chancery court (a type of trial court) against Quality Motors, Inc. to disaffirm his purchase of a Pontiac automobile and recover the purchase price.
- The special chancellor (the trial judge) initially ordered Johnny to return the wrecked car within seven days.
- Upon the car's return, the special chancellor issued a final decree ordering Quality Motors, Inc. to pay Johnny Hays $1,750.
- Quality Motors, Inc. (appellant) appealed the chancery court's decree.
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Issue:
Does a minor who disaffirms a contract for a non-necessary item, after the adult seller refused to accept the item's return, have to return the consideration received in its original condition or be liable for damages to the item that occurred while the minor had possession?
Opinions:
Majority - Dunaway, J.
No, a minor who disaffirms a contract for a non-necessary item is not required to return the consideration in its original condition or be liable for damages that occurred while they had possession, especially when the seller refused to accept the item's return. The court reiterated that Arkansas law is well-settled that an infant may disaffirm contracts, except those for necessaries, without being required to return the consideration received, except for any part remaining in specie in their hands. The court cited Arkansas Reo Motor Car Co. v. Goodlett, which allowed a minor to recover the full amount paid on a car that was returned in a wrecked and practically valueless condition. The court found that proper tender of the car had been made through Dr. Hays' and his attorney's repeated offers to return it, and that actual delivery was not required because Quality Motors, Inc. had repeatedly refused to accept it, making further tender vain and useless. Furthermore, the court rejected Quality Motors, Inc.'s contention that Johnny was liable for conversion, noting the company was in an inconsistent position: denying the sale to Johnny while simultaneously insisting he was liable for damages. Until the court decreed return of the car and recovery of the consideration, Johnny still held title, and one cannot be liable for conversion of one's own property. The court distinguished the case from Smith v. Moschetti, where a minor fraudulently converted property held as a trustee or bailee. Here, Quality Motors, Inc. had insisted 'it's not our car.' The court concluded that the loss suffered by Quality Motors, Inc. was a direct result of its own actions in knowingly selling to a minor through subterfuge and then resisting disaffirmance.
Analysis:
This case strongly reinforces the protective nature of the infancy doctrine in contract law, particularly regarding a minor's right to disaffirm contracts for non-necessaries. It clarifies that minors are generally not liable for depreciation or damage to the purchased item, even if significant, when exercising their right to disaffirm, especially if the adult seller has refused a timely tender of return. The ruling places a substantial burden on adult parties to ensure they are contracting with individuals of legal age or to accept the financial risks associated with disaffirmance, thereby encouraging caution in transactions involving minors. This decision serves as a significant precedent for the scope of protection afforded to minors in contractual agreements.
