Story Case

Howard Mix, an infant twenty years old, sold twenty shares of railroad stock to Edward Mills. This stock was of uncertain value and fluctuated on the market to a considerable extent during the course of a few weeks. The sale to Mills was made at the market price. When Mix became of age, the stock was still worth approximately the same amount as he received for it. Six months later it had a quick substantial rise in the market and was soon worth double the amount Mix received. Then Mix informed Mills that he repudiated the contract made while he was an infant and demanded a return of the stock, offering at the same time to return the money Mills had paid to him. Can Mix do this?

Ruling Court Case. Goodnow Vs. Empire Lumber Company, Volume 31 Minnesota Reports, Page 468; Volume 47 American Reports, Page 798

The plaintiff, during the period of non-age, sold and conveyed certain land which he owned to the defendant. This was an action to recover the land of the defendant, upon the theory that he, the plaintiff, had elected to repudiate the sale. Three years and a half had elapsed since the plaintiff had come of age and during that time he had taken no steps to disaffirm, nor had he given any notice of an intention to do so. It further appeared that there was no reason why the plaintiff might not have done so. For these reasons it was contended by the defendant that the plaintiff had lost the right to disaffirm.

Mr. Justice Gilfillan said in part: "In every other case of a right to disaffirm, the party holding it is required, out of regard to the rights of those who may be affected by its exercise, to act upon it within a reasonable time. A reasonable time after majority within which to act is all that is essential to the protection of infants. That ten, fifteen, or twenty years should be necessary as a matter of protection to the infant, is absurd. The only effect of giving more than a reasonable time is to enable the mature man, not to correct what he did amiss in his infancy, but to speculate on the events of the future - a consequence entirely foreign to the purpose of the rule, which is solely for protection to infants. Reason, justice to others, public policy (which is not subserved by cherishing defective titles), and convenience, require the right of disaffirmance to be acted upon within a reasonable time. What is a reasonable time will depend upon the circumstances of each particular case, and may be either for the Court or the jury to determine.

"Three years and a half, the delay in this case, after the time within which to act had commenced to run, was prima facie more than a reasonable time, and prima facie the conveyance was ratified."

Accordingly it was held that the plaintiff could not recover.

Ruling Law. Story Case Answer

An affirmance by an infant of a voidable contract is a voluntary recognition of the contract, accompanied by a manifest intention to be bound by it. Whether in a given case an infant has affirmed, is a question for the jury to determine in the light of all the circumstances of the case. Obviously, if the infant makes a new promise after coming of age, this will render binding the formerly existing voidable contract. This is true without any new consideration. When the infant, after reaching majority, deals with property or money which he has received under the voidable contract, as if it were his own, such conduct will generally be held to be equivalent to an affirmance of the contract. If the infant makes an unreasonable delay in disaffirming after coining of age, such conduct is very strong evidence of an intention to affirm the contract, but it is not conclusive. In the Story Case, since the property sold was stock in a railroad, and since this stock had a fluctuating value, a reasonable time during which Mix could disaffirm would be much shorter than if, for instance, the property had been land. Silence during the six months' period would probably be construed as an affirmance, and, therefore, Mix could not recover the stock.