Rice v. Boyer.

Jordan, 17 Tex. 341, that "aside from any question of authority, the rule given, in the case last cited, by HEMPHILL, C. J., as the rule of the Spanish, derived from the civil law, that if a minor represents himself to be of age, and from his person he appears to be so, he will be bound by any contract made with him, seems to be most consonant with reason and justice."

Mr. Pomeroy pushes the doctrine much farther than we are required to do here, for he says: "If an infant procures an agreement to be made through false and fraudulent representations that he is of age, a court of equity will inforce his liability as though he were adult, and may cancel a conveyance or executed contract obtained by fraud." 2 Pom. Eq. Jur., § 945.

In addition to cases cited which sustain our view may be cited the following authorities: Fitts v. Hall, 9 N. H. 441; Eckstein v. Frank, 1 Daly, 334; Schuneman v. Paradise, 46 How. Pr. 426; Tyler Inf. 182; 1 Pars. Cont. 317, note; 1 Story Eq. Jur. 385.

The English cases recognize a distinction between suits of equitable cognizance and actions at law, and declare that a representation as to age, when falsely and fraudulently made, will bind an infant in equity. Ex parte Unity, etc., Ass'n, supra, and authorities cited. Under our system we can recognize no such distinction, a distinction which is, as we think, a shadowy one under any system, for in our system the rules of law and equity are merged and mingled. Under such a system as ours courts should pursue such a course as will render justice to suitors under the rules of equity, which after all are but the embodiment of the principles of natural justice. It cannot be the duty of any court of Indiana to deny substantial justice because the complaint states a cause of action in a peculiar form, for under our system courts must render such judgments as yield justice to those who invoke their aid, irrespective of mere forms, in all cases where the substantial facts are stated, and are such as entitle the party to the general relief sought. They will not inquire whether the proceeding which asks their aid is at law or in equity, but they will render justice to those who ask it in the method prescribed by our Code of Civil Procedure.

It is laid down as a general rule by all the text-writers, that infants are liable for their torts, but many of these writers, when they consider such a question as we have here, are sorely perplexed by the early English decisions, and by subtle refinement attempt to discriminate between pure torts and torts connected with con

Rice v. Boyer.

tracts, and to create an artificial class of actions. Their reasoning is not satisfactory. Aside from mere personal torts, it is scarcely possible to conceive a tort not in some way connected with a contract, and yet all the authorities agree that the liability of infants is not confined to [mere personal torts. There is a connection between a contract and a tort in every case of bailment of the bargain and sale of personal property, and of the purchase and sale of real estate, and if an infant is not responsible for his fraudulent representation of his age, in connection with such transactions, there is not within the whole range of business transactions any case in which he could be made liable for his fraud. There are many cases, far too numerous for citation, where there is some connection between the contract and the tort, and yet it is unhesitatingly held that the infant is liable for his tort. Cooley Torts, 112, authorities cited in notes. The cases certainly do agree; it is indeed difficult, if not impossible, to perceive how it could be otherwise, that although there may be some connection between the contract and the wrong, the infant may be liable for his tort. It seems to us that the only logical and defensible conclusion is, that he is liable, to the extent of the loss actually sustained, for his tort where a recovery can be had without giving effect to his contract. The test, and the only satisfactory test, is supplied by the answer to the question; can the infant be held liable without directly or indirectly enforcing his promise? There is no enforcement of a promise where an infant who has been guilty of a positive fraud is made to answer for the actual loss his wrong has caused to one who has dealt with him in good faith and has exercised due diligence. Nor does such a rule open the way for a designing man to take advantage of an infant, for it holds him to the exercise of good faith and reasonable diligence, and does not enable him to make any profit out of the transaction with the infant, because it allows him. compensation only for the actual loss sustained. It does not permit him to make any profit out of an executory contract, but it simply makes good his actual loss.

It is worthy of observation that in the cases which hold that an infant's representation will not estop him to deny his disability, it is generally declared that he may nevertheless be held liable fo his tort.

It may often happen that the age and appearance of the infant will be such as to preclude a recovery for a fraud, because reasona

Rice v. Boyer.

ble diligence, which is exacted in all cases, would warn the plaintiff of the nonage of the defendant. On the other hand, the infant may be in years, almost of full age, and in appearance entirely so, and thus deceive the most diligent by his representations. Suppose a minor, who is really twenty years and ten months old, but in appearance a man of full age, should obtain goods by falsely and fraudulently representing that he is twenty-one years of age, ought he not, on the plainest principles of natural justice, to be held liable, not on his contract, but for the loss occasioned by his fraud? The rule which we adopt will enable courts to protect, in some measure, the honest and diligent, but none other, who are misled by a false and fraudulent representation, and it will not open the way to imposition upon infants, for in no event can any thing more than the actual loss sustained be recovered, and no person who trusts, where fair dealing and due diligence require him not to trust can reap any benefit. It will not apply to an executory contract which an infant refuses to perform, for in such a case, the action would be for the breach of contract, and the terms of our rule forbid such a result, but it will apply where an infant, on the faith of his false and fraudulent representation, obtains property from another and then repudiates his contract. Any other rule would in many cases suffer a person guilty of positive fraud to escape loss, although his fraud had enabled him to secure and make way with the property of one who had trusted in good faith to his representation, and had exercised due care and diligence. We are unwilling to sanction any rule which will enable an infant who has obtained the property of another, by falsely and fraudulently representing himself to be of full age, to enjoy the fruits of his fraud, either by keeping the property himself or selling it to another, and when asked to pay its just and reasonable value successfully plead his infancy. Such a rule would make the defense of infancy both a shield and a sword, and this is a result which the principles of justice forbid, for they require that it should be merely a shield of lefense.

Judgment reversed with instructions to overrule the demurrer to the complaint. Judgment reversed.

Naltner v. Dolan.

NALTNER V. DOLAN.

(108 Ind. 500.)

deposit of client's money in attorney's name—liability for loss.

Where an attorney deposits his client's moneys in a solvent bank, in his own name in a separate account, but with no indication of the trust, he is liable for loss by the subsequent insolvency of the bank, notwithstanding he was prevented from transmitting the moneys by garnishment proceedings against him.

S. Claypool and W. A. Kitcham, for appellant.

J. R. Courtney, for appellee.

MITCHELL, J. Naltner, on the 24th day of February, 1883, commenced proceedings in attachment against Dolan, and on the same day caused a summons in garnishment to be served on the appel lants herein. On the 7th day of March following, upon his intervening petition, Montague was admitted as a party to the proceeding. He filed a cross complaint, in which he alleged, in substance, that the fund in the hands of the appellants, being the subject of the attachment and garnishee proceeding, had been assigned to him by Dolan, for a valuable consideration, before the proceedings were commenced. He prayed judgment for the recovery of the money.

The appellants, with the general denial, answered specially, admitting the possession of a fund which they averred had come to their hands as the attorneys of Dolan. They alleged that they had been notified by Montague of his claim after the proceedings in garnishment had been commenced, and averred their readiness to pay the money to whomsoever the court should adjudge entitled thereto. Other answers were filed, to which demurrers were sus

tained.

The facts were found specially by the court, and are presented in the following summary: Dolan, who at the time the suit was commenced lived in Illinois, owed Nalter $600, then due.

Naltner v. Dolan.

The appellants, as attorneys, had in their hands for collection a claim in favor of Dolan, against the Indiana, Bloomington and Western Railway Company, which Dolan, on the 13th day of September, 1882, transferred for value to Montague. On February 24, 1883, the day on which the attachment suit was commenced, appellants received from the clerk of the United States District Court, for the district of Indiana, checks for something over $80,000 which was in payment of claims against the Indiana, Bloomington and Western Railway Company, which payment was made to them in behalf of Dolan and many others of their clients. Dolan's claim against the railway company was $600. Upon receiving the check they deposited it with the Indiana Banking Company, which was then in good standing, the deposit being to the credit of themselves in their firm name. The money thus received belonged to some hundreds of their clients, and the computation of interest, and the division to each of his share required several days' continuous work before distribution could be niade.

The appellants were lawyers, partners, actively engaged in practice. They had an account at the bank in question in which all money collected for, and belonging to their various clients was deposited and checked out in the firm name, but such moneys were not mingled with their own.

Before they had time or opportunity to pay out the money in controversy, the appellants were garnished at the suit of Naltner. They received notice of the assignment to Montague, February 28, 1883, four days after the suit was commenced. Montague, within a few months after giving notice of his claim, and while the proceedings in garnishment were pending, made demand on the garnishee defendants for the money remaining in their hands, which was derived from the Dolan claim.

On the 9th day of August, 1883, the Indiana Banking Company, having until that time continued in good standing and credit, failed. A receiver was appointed for the bank August 13, 1883. The appellants brought the certificate of the receiver of the bank for the money in dispute into court, and offered to surrender it to the person entitled as the court should direct. The amount remaining in their hands in the manner above stated, was $445.69.

Conclusions of law were stated favorable to a recovery by Montague against the appellants of the amount thus remaining in their hands.