Step 1: Concept
A line perpendicular to $ax + by + c = 0$ is of the form $bx - ay + \lambda = 0$.
Step 2: Analysis
The given line is $1x + 1y + 1 = 0$. The perpendicular line is $1x - 1y + \lambda = 0$.
Since it passes through $(1, 2)$, substitute these values: $1(1) - 1(2) + \lambda = 0 \Rightarrow 1 - 2 + \lambda = 0 \Rightarrow \lambda = 1$.
Step 3: Conclusion
The equation is $x - y + 1 = 0$.
Final Answer: (A)