Source: https://caselaw.findlaw.com/us-supreme-court/273/18.html
Timestamp: 2019-04-18 13:48:58+00:00

Document:
[273 U.S. 18, 19] Mr. George P. Lemm, of Washington, D. C., for Myers.
[273 U.S. 18, 20] Mr. Henry C. Clark, of Washington, D. C., for Hurley Motor Co., Inc.
'Clarence H. Myers, plaintiff in error, on the 28th day of April, 1923, then a minor of the age of 20 years, represented to the defendant company that he was 24 years of age, and engaged in the hacking business in the District of Columbia; whereupon he contracted with defendant for a Hudson touring car at the price of $650, upon terms set out in a conditional sales contract. Plaintiff turned in as cash payment a Ford touring car at the price of $250, which was subsequently sold by defendant company for that price. Plaintiff subsequently made payments on the contract to the amount of $156.12, making a total payment on the contract of $406.12.
'On October 3, 1923, plaintiff being in default in his payments, defendant company repossessed itself of the Hudson car, under the terms of its sale agreement. Plaintiff attained the age of 21 years on October 21, 1923, and, on the 1st day of November following, disaffirmed his contract and demanded the return of $406.12, the amount paid upon the contract. Upon defendant's refusal to comply with plaintiff's request, the present suit was brought in the municipal court of the District of Columbia by plaintiff to recover $ 406.12, the amount paid by him.
'Defendant company set up, as a counterclaim, the amount of $525.96, supported by a bill of particulars, showing that this amount was required in the way of repairs and expense to place the Hudson car in as good condition as it was when sold to plaintiff. The municipal court gave judgment upon defendant's plea of set-off for the full amount of $525.96, from which the case was brought to the Court of Appeals on writ of error.
(1) Is the plaintiff, by reason of the misrepresentations as to his correct age, estopped from maintaining an action to recover the amount paid under the conditional sales contract upon the purchase price of the Hudson car?
(2) If the plaintiff is not so estopped, may defendant, by way of affirmative defense against plaintiff's claim, set off the amount paid for the repair of the damaged Hudson car, or so much thereof as will equal plaintiff's claim?
The statement that the authorities are all one way in holding that an estoppel in pais is not-that is to say, is never-applicable to infants, at least of doubtful accuracy when made, is clearly incorrect at the present time A review shows that many, perhaps the major part, of the state decisions, hold that in equity the rule is otherwise. See Bigelow on Estoppel (6th Ed.) 627; 1 Williston on Contracts, 245. In any event, the most that can be said is that the decisions upon that subject are conflicting and to some degree in confusion. The doctrine of the Everhardt Case, however, was followed in MacGreal v. Taylor, 167 U.S. 688, 696 , 17 S. Ct. 961, and has been made the basis of decisions in several of the lower federal courts (Bartlett v. Okla. Oil Co. (D. C.) 218 F. 380, 391; Alfrey v. Colbert (C. C. A.) 168 F. 231, 235; Sanger v. Hibbard (C. C. A.) 104 F. 455, 457), and has become the established federal rule. Likewise it has been accepted and followed by many of the state courts. See, for example, Tobin v. Spann, 85 Ark. 556, 559, 109 S. W. 534, 16 L. R. A. (N. S.) 672; Cobbey v. Buchanan, 48 Neb. 391, 394, 67 N. W. 176; Kirkham v. Wheeler-Osgood Co., 39 Wash. 415, 424, 81 P. 869, 4 Ann. Cas. 532; Alvey v. Reed, 115 Ind. 148, 149, 17 N. E. 265, 7 Am. St. Rep. 418. In this state of the matter, we are not disposed now to re-examine the question in the light of the conflict of authority; but, following the Everhardt Case, we hold that the doctrine of estoppel in pais cannot be invoked to defeat plaintiff's action.
Here the action brought by the quondam infant is one for money had and received-the payments under the disaffirmed contract having been either in money or in property converted into money before the disaffirmance. Such an action, though brought at law, is in its nature a substitute for a suit in equity; and it is to be determined by the application of equitable principles. In other words, the rights of the parties are to be determined as they would be upon a bill in equity. The defendant may rely upon any defense which shows that the plaintiff in equity and good conscience is not entitled to recover in whole or in part. Rathbone v. Stocking, 2 Barb, (N. Y.) 135, 145, 147; Barr v. Craig, 2 Dall. 151, 154; Wright v. Butler, 6 Wend. (N. Y.) 284, 290, 21 Am. Dec. 323; Eddy v. Smith, 13 Wend. (N. Y.) 488, [273 U.S. 18, 25] 490; Christie v. Durden, 205 Ala. 571, 572, 88 So. 667; Gifford v. Wilcox, 81 Ind. App. 378, 381, 143 N. E. 368.
It has been held that, where an infant, after coming of age, seeks the aid of a court of equity to avoid a contract, under which he has received property, and restore to him the possession of obligations with which he has parted, he will be required, wholly irrespective of his own good faith in the transaction, to do equity, which may extend to compelling him to make full satisfaction for the deterioration of the property due to his use or abuse of it.
How far the equitable maxim, that he who seeks equity must do equity, applies generally in suits brought for relief because of infancy, we need not inquire; nor do we need here to go as far as the authorities just cited. The maxim applies, at least, where there has been, as there was here, actual fraud on the part of the infant. When an infant of mature appearance, by false and fraudulent representations as to his age, has induced another person to sell and deliver property to him, it is against natural justice to permit the infant to recover money paid for the property without first compelling him to account for the injury which his deceit has inflicted upon the other person.
Our conclusion that the affirmative defense is available in this action does not rest upon the doctrine of estoppel, though the result may be the same. It recognizes the [273 U.S. 18, 27] plaintiff's right to repudiate his promise and sue for the return of his payments, and his immunity from a plea of estoppel in so doing. Its effect is not to enforce the disaffirmed contract directly or indirectly, but to allow him to invoke the aid of the court to enforce an equitable remedy arising from the disaffirmance only upon condition that, 'seeking equity, he must do equity.' And the application of the maxim is not precluded because defendant's claim might not be enforceable in any other manner. 1 Pomeroy's Equity, 386; Sturgis v. Champneys, 5 Myl. & C. 97, 102; Farmers' Loan & Trust Co. v. Denver, L. & G. R. Co. (C. C. A.) 126 F. 46, 51.
The question remains whether defendant should have judgment for the amount by which its expenditures exceeded plaintiff's demand. We are not advised of any statutory rule upon the subject applicable in the District of Columbia; and the matter must be determined in accordance with general principles. The defense, in effect, is that the plaintiff was guilty of tortious conduct to the injury of the defendant in the transaction out of which his own cause of action arose. In such case it is well settled that the relief is by way of recoupment-that is, that the amount of defendant's damage can be allowed only in abatement or diminution of plaintiff's claim- and that defendant cannot, at least in that action, recover any excess. Winder v. Caldwell, 14 How. 434, 443; Dushane v. Benedict, 120 U.S. 630, 642 , 7 S. Ct. 696; Ward v. Fellers, 3 Mich. 281, 287, 291; Waterman v. Clark et al., 76 Ill. 428, 430; Holcraft v. Mellott, 57 Ind. 539, 544.
It follows that the first question should be answered in the negative and the second question in the affirmative, with the qualification that the amount allowed defendant shall not exceed the amount of plaintiff's claim.

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