This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
There is another theory of the nature and effect of an infant's voidable contract, which is inconsistent with the operation of the principles already laid down, and often gives, in particular cases, the opposite result from that which they would indicate. This theory is that a contract of an infant, if fair and reasonable, cannot be rescinded as far as it is executed unless the adversary party is placed substantially in statu quo.1 The list of cases cited might be greatly increased by adding cases which involve this general principle, but which have been overruled on the specific point decided. The operation of this principle places an infant's contracts on much the same footing as a contract for necessaries, that is, they are to be enforced if fair and reasonable, as far as they are executed, though the reasonable value rather than the contract price controls. This principle is enforced to its fullest extent in New Hampshire, where the adversary party must be put in statu quo,2 at least to the full extent of the benefit received by the infant.3 Thus an agreement by a minor to apply certain chattels to a debt due to him can be repudiated to the extent that only the value of the chattels need be applied on the debt.4 In other jurisdictions it has been applied to special cases rather than broadly and generally. Thus, it has been held that an infant lessee who avoids his lease cannot recover the rent paid for the time that he used the premises.5 So beneficial legal legal services may be enforced against the infant's estate.6 So a minor cannot recover premiums paid by him for insurance,7 at least, where not in excess of a fair value of the risk actually incurred by the company ; though where an additional sum is added thereto to form an accumulating fund, as is generally done under modern methods of insurance, he may recover this additional sum.8 So, in order to avoid a minor's assignment of a life insurance policy on his father's life he must repay the premiums paid by the assignee before the assignment was avoided, to keep the policy up.9 So an infant who buys goods, not necessaries, must account for the benefit derived therefrom.10 Thus where an infant bought a bicycle on the installment plan, paid for it in part, used it awhile, and then returned it and sued to rescind, it was held that she must account for a reasonable value for its use, which in this case, equaled what she had paid in.11 While this theory may in some cases be reconciled with the one generally received, it cannot be so reconciled in others, and it had better be classed as a divergent holding; nor can it be classed as an obsolete theory. It must be reckoned with at Modern Law as a principle that still shows evidences of vitality. Even where the theory discussed in this section is in force, an infant may avoid any contract which is not fair and reasonable, without making any compensation beyond returning so much of the consideration received by him as he has left.12
Dec 105; Walker v. Davis, 1 Gray (Mass.) 506; Taft v. Pike, 14 Vt. 405; 39 Am. Dee. 228; Mustard v. Wohlford, 15 Gratt. (Va.) 329; 76 Am. Dec. 209.
1 Valentini v. Canali, L. R. 24 Q. B. D. 166; Adams v. Beall. 67 Md. 53; 1 Am. St. Rep. 379; 8 Atl. 664; Johnson v. Insurance Co., 56 Minn. 372; 45 Am. St. Rep. 473; 26 L. R. A. 187; 59 N. W. 992; 57 N. W. 934; Epperson v. Nugent. 57 Miss. 45; 34 Am. Rep. 434; Clark v. Tate, 7 Mont. 171; 14 Pac. 761; Hall v. Butterfield, 59 N. H. 354;
47 Am. Rep. 209; Heath v. Stevens,
48 N. H. 251; Rice v. Butler, 160 N. Y. 578; 73 Am. St. Rep. 703; 47 L. R. A. 303; 55 N. E. 275; Searcy v. Hunter, 81 Tex. 644; 26 Am. St. Rep. 837; 17 S. W. 372.
2 Heath v. Stevens, 48 N. H. 251; Locke v. Smith, 41 N. H. 346.
3 Bartlett v. Bailey. 59 N. H. 408 ; Hall v. Butterfield, 59 N. H. 354; 47 Am. Rep. 209.
4 Kimball v. Bruce, 58 N. H. 327. 5 Valentini v. Canali, L. R. 24
Q. B, D. 166.
6 Epperson v. Nugent, 57 Miss. 45; 34 Am. Rep. 434; Searcy v. Hunter, 81 Tex. 644; 26 Am. St. Rep. 837; 17 S. W. 372. In the case last cited it was said that they might be considered as necessaries.
7 Metropolitan Life Ins. Co. v. Bowser, 20 Ind. App. 557; 50 X. E. 86. "We do not assent to the view that as a further consequence of his disability, he may recover back the dues and assessments he may have already paid." Chicago, etc., Association v. Hunt. 127 111. 257, 277; 2 L. R. A. 549; 20 N. E. 55.
8 Johnson v. Ins. Co., 56 Minn. 372; 45 Am. St. Rep. 473; 26 L. R. A. 187; 59 N. W. 992; 57 N. W. 934 (note the modification on rehearing, in accordance with the text). Contra, under general theory of infancy. Simpson v. Ins. Co.. 184 Mass. 348: 68 N. E. 673.
9 City Savings Bank v. Whittle, 63 N. H. 587; 3 Atl. 645.
10 Hall v. Butterfield. 59 X. H. 354; 47 Am. Rep. 209; Rice v. Butler, 160 X. Y. 578; 73 Am. St. Rep. 703; 47 L. R. A. 303; 55 N. E. 275.
11 "The plaintiff, having had the use of the bicycle during the time intervening between her purchase and its return, ought, in justice and fairness, to account for its reasonable use or deterioration in value, otherwise she would be making use of the privilege of infancy as a sword, and not as a shield." Rice v. Butler. 160 X. Y. 578, 583; 73 Am. St. Rep. 703; 47 L. R. A. 303; 55 X. E. 275; criticising Pyne v. Wood. 145 Mass. 558; 14 X. E. 775: McCarthy v. Henderson. 138 Mass. 310. Contra, as to a sale of a bicycle on the installment plan. Gillis v. Goodwin. 180 Mass. 140; 91 Am. St. Rep. 265; 61 X. E. 813.