Contracts I, Pages 572–579

Halbman v. Lemke

Supreme Court of Wisconsin, 1980

Facts:

Plaintiff, a minor, bought an Oldsmobile from defendant for $1,250. Plaintiff was to pay $25 per week until the balance was paid. After about five weeks, when plaintiff had paid $1,100, a connecting rod on the engine broke. Defendant offered to install a used engine if plaintiff bought one, although he admitted no liability. Plaintiff instead took it to a garage and paid $637.40 to get it repaired, which plaintiff did not pay.

Defendant gave plaintiff the title, even though the vehicle was not paid off to avoid liability. Plaintiff returned the title, disaffirming the purchase contract and demanded the return of all money. Defendant did not return the money plaintiff had paid.

Since neither party would pay the repaid bill, the garage removed the engine and transmission and towed the car to plaintiff's father's house. He asked defendant to remove the car from his house, which he refused. The car was vandalized throughout the process several times and was thus unsalvageable.

Procedural History:

  • Trial court granted judgment in favor of defendant, concluding that when a minor disaffirms a contract for the purchase of an item, he only has to offer to return the property he still has. The court also allowed interest to plaintiff dating from the disaffirmance of the contract, although they later amended it to be from the date of the original order for judgment.

  • The appellate court affirmed the trial court with respect to restitution for depreciation, but reversed on the question of prejudgment interest, again imposing interest dating from the date of disaffirmance.

Issue:

Is a minor who disaffirms a contract for the purchase of a non-necessary vehicle liable for damage to the vehicle before the contract was disaffirmed?

Rule:

A minor is required to return any remaining property he has when he disaffirms a contract for a purchase.

Reasoning:

The depreciation of the car is not property that plaintiff had. He cannot be obligated to return money that he does not have.

Holding:

No, a minor who disaffirms a contract for the purchase of a non-necessary vehicle is not liable for damage to the vehicle before the contract was disaffirmed. Affirmed.

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