Oh my God, yes! I vaguely remember this. I think it might have been German. The kid could always laugh his way out of trouble (think he knocked some woman's oranges over and just laughed his way out of it). The bloke was jealous of his laugh and did some deal with him which ended up with the bad guy being able to laugh and smile which he couldn't do before, and the kid lost the ability to do this. Was it called something like (kid's name)'s laugh or (kid's name)'s smile? Argh, gonna bug me now!