CHAPTER XI

INSANITY AND INTOXICATION

254. Insanity as Ground for Rescission. Contracts and Deeds Voidable or Void.

255. 256.

Liability for Necessaries and Contracts Beneficial to Lunatic.

257. Notice or Knowledge of Insanity.

258. Same; Rights of Third Persons Purchasing for Value. 259. Effect of Adjudication of Insanity.

260. Time of Making Contract or Conveyance.

261. Deed or Contract Made in Lucid Interval.

264. Mental Weakness Accompanied by Fraud or Undue Influence. 265. Mental Weakness and Inadequacy of Consideration. Monomania; Fixed Particular Delusions.

266.

267.

268.

269.

270.

Old Age and Senile Dementia.

Unconsciousness, Stupor, or Coma.

Obscuration of Faculties Immediately Preceding Death.
Effects of Violent Grief, Anxiety, or Excitement.

271. Eccentricity and Erratic Habits of Mind.

272. Impairment of Faculties Through Addiction to Drugs. 273. Physical Infirmities Not Affecting Mental Powers.

274. Effect of Restoration to Reason.

Restitution or Restoration of Consideration.

275.

Same; Ratification of Contract.

276.

277.

278.

279.

Intoxication as Ground of Rescission.

Degree or Measure of Intoxication.

Intoxication Voluntary or Induced by Other Party.

280. Habitual Drunkenness.

281.

Voidability of Contract; Ratification or Disaffirmance. 282. Restoration of Consideration.

§ 254. Insanity as Ground for Rescission.-In the case of an insane person, that is, one who is wholly unable from mental derangement to make a binding contract,—the law presumes fraud from the relative condition of the parties, the presumption being stronger or weaker according to the position of the parties with respect to each other; and if the other party to the contract had notice or knowledge of the existing insanity, his action in concluding a bargain with the insane person, knowing the disability, constitutes a constructive fraud which authorizes the courts to grant relief, even though there was no actual fraud or un

due influence.1 But if the contracting party had no knowledge of the other's insanity, and dealt with him in entire innocence and good faith, and if, for this reason, the contract cannot be regarded as absolutely void but as voidable at most, still there remains the fact that an insane person cannot give that intelligent consent without which a valid contract cannot be formed, and hence, in this case also, the contract may be avoided or set aside on equitable terms. And the doctrine that where one of two innocent persons must suffer, the loss should fall on him who made the condition possible, has no application to cases where it is sought to set aside a deed on the ground of the insanity of the grantor, for an insane person cannot be held responsible for consequences which he could not understand or prevent. It may be remarked in passing that the absurd doctrine of the early common law, that a person could not be permitted to allege his own mental incompetence because that would "stultify" him, has long since been discarded.3

A contract, deed, or other transaction being voidable for the insanity of one of the parties, that party himself may rescind it or sue for its rescission on being restored to sanity, and is not chargeable with laches on account of his having acquiesced in the contract or failed to take measures against it during the continuance of his incompetency, or for a reasonable length of time after the recovery of his reason. If the insane person does not recover, or while his

1 Sprinkle v. Wellborn, 140 N. C. 163, 52 S. E. 666, 3 L. R. A. (N. S.) 174, 111 Am. St. Rep. 827. And see Clay v. Hammond, 199 Ill. 370, 65 N. E. 352, 93 Am. St. Rep. 146; Combs v. Combs, 23 Ky. Law Rep. 1264, 65 S. W. 13; Austin v. Bridges, 21 Ky. Law Rep. 694, 52 S. W. 966.

2 McKenzie v. Donnell, 151 Mo. 461, 52 S. W. 222.

3 "The earlier authorities of the English law held that a man should not be allowed to stultify himself by alleging his own lunacy or imbecility; but such a doctrine sounds more like the gibberish of a lunatic than like the decree of a humane and enlightened lawgiver. The maxim of the civil law, 'furiosus nullum negotium gerere potest, quia non intelligit quid agit,' expresses the sense of modern jurisprudence on the subject." 1 Daniel, Nego. Instr. (3d edn.) § 209. 4 Patton v. Washington, 54 Or. 479, 103 Pac. 60.

5 Alston v. Boyd, 6 Humph. (Tenn.) 504.

• Bushnell v. Loomis, 234 Mo. 371, 137 S. W. 257, 36 L. R. A. (N. S.) 1029.

BLACK RESC.-43

incapacity still continues, rescission may be effected by his guardian or committee, if one has been appointed, or, where real property is involved, by his devisees or heirs at law." But whoever it is that seeks to set aside a contract on the ground of insanity must assume the burden of proving the existence of that disability."

If the transaction in question is regarded as absolutely void (and not merely voidable) on account of the insanity of a party, it may be that a court of law can afford the proper relief, and that there will be no necessity for asking the aid of equity. Thus, in Alabama, it is held that a deed made by a person who is completely and permanently deranged is entirely void, and if he is not in possession at the time of suit brought, those acting in his interest, or claiming title under him, cannot maintain a bill in equity for relief against the conveyance, since the law gives a complete and adequate remedy in the form of an action of ejectment. But deeds so made are not universally regarded as absolutely void, and generally speaking, where a business transaction of any kind is to be avoided on the ground of insanity of a party, the court of equity is the proper forum to grant relief, on a bill for rescission or cancellation of the contract or the deed, as the case may be.10 And one who takes a conveyance from a person whom he knows to be of unsound mind is not entitled to a tender of the price as a prerequisite to the avoidance of the instrument,11 nor is it necessary that the bill for cancellation should contain an offer or allege a readiness to return the consideration received.12 But incompetence by reason of insanity should be made the basis of a direct action for relief, and not of defense in a collateral

7 Brigham v. Fayerweather, 144 Mass. 48, 10 N. E. 735; Young v. Blanchard, 165 Mich. 340, 130 N. W. 694.

8 Wray v. Wray, 32 Ind. 126.

Lewis v. Alston, 184 Ala. 339, 63 South. 1008; Boddie v. Bush, 136 Ala. 560, 33 South. 826; Letohatchie Baptist Church v. Bullock, 133 Ala. 548, 32 South. 58; Galloway v. Hendon, 131 Ala. 280, 31 South. 603; Wilkinson v. Wilkinson, 129 Ala. 279, 30 South. 578.

10 Luffboro v. Foster, 92 Ala. 477, 9 South. 281; Walton v. Malcolm, 264 Ill. 389, 106 N. E. 211, Ann. Cas. 1915D, 1021; Logan v. Vanarsdall, 27 Ky. Law Rep. 822, 86 S. W. 981.

11 Thrash v. Starbuck, 145 Ind. 673, 44 N. E. 543.

12 Ronan v. Bluhm, 173 Ill. 277, 50 N. E. 694.

proceeding. Thus, where a lunatic has given a conveyance of property, and his grantees have mortgaged it, and the committee of the lunatic has taken no steps to obtain a rescission of the conveyance, he cannot defeat the mortgage in an action brought to foreclose it.18

14

Applying these principles to various classes of transactions, it may be remarked in the first place that a deed, mortgage, or other conveyance made by an insane person may be set aside or canceled by decree of court, although it does not appear that any fraud or undue influence was exerted or that any unfair advantage was taken of his condition. And an exchange of property to which one of the parties was a lunatic, or a person of obviously deranged mind, is invalid.15 So, a promissory note made by a person who is insane is void in the hands of the original parties,1 except, perhaps, where it was given for the reasonable value of necessaries furnished to him or for another consideration, adequate in itself and beneficial to the insane person.17 Also it is held that a note signed by an insane man, although negotiable in form, is not within the rule of commercial law which protects negotiable paper in the hands of a bona fide purchaser for value against defenses to which it was

16

18 German Sav. Bank v. Wagner, 164 App. Div. 234, 149 N. Y. Supp. 654.

14 Maggini v. Pezzoni, 76 Cal. 631, 18 Pac. 687; Pinkard v. Smith, Litt. Sel. Cas. (Ky.) 331; Langley v. Langley, 45 Ark. 392; Riggan v. Green, 80 N. C. 236, 30 Am. Rep. 77; Dicken v. Johnson, 7 Ga. 484; Valpey v. Rea, 130 Mass. 384; Jacox v. Jacox, 40 Mich. 473, 29 Am. Rep. 547; Goodyear v. Adams, 52 Hun, 612, 5 N. Y. Supp. 275; Northwestern Mut. Fire Ins. Co. v. Blankenship, 94 Ind. 535, 48 Am. Rep. 185; New England L. & T. Co. v. Spitler, 54 Kan. 560, 38 Pac. 799; Curtis v. Brownell, 42 Mich. 165, 3 N. W. 936; Chew v. Bank of Baltimore, 14 Md. 299; Karrick v. Landon, 41 App. D. C. 416. The deed of an insane grantor may be set aside even as against the objection that it was made with intent to defraud third persons. Crawley v. Glaze, 117 Va. 274, 84 S. E. 671.

15 Halley v. Troester, 72 Mo. 73.

16 Allen v. Babcock, 1 Har. (Del.) 348; Ellars v. Mossbarger, 9 Ill. App. 122; Musselman v. Cravens, 47 Ind. 1; Taylor v. Dudley, 5 Dana (Ky.) 308; Schmidt v. Ittman, 46 La. Ann. 888, 15 South. 310; Hosler v. Beard, 54 Ohio St. 398, 43 N. E. 1040, 35 L. R. A. 161, 56 Am. St. Rep. 720; Moore v. Hershey, 90 Pa. 196.

17 Hosler v. Beard, 54 Ohio St. 398, 43 N. E. 1040, 35 L. R. A. 161, 56 Am. St. Rep. 720; McCormick v. Littler, 85 Ill. 62, 28 Am. Rep.

subject in the hands of the payee, but the purchaser takes it charged with notice of the maker's disability, occupies no better position as against him than the payee, and is subject to the same burden of proof when the maker's incapacity is pleaded in defense to an action brought by the holder. 18 For similar reasons, the transfer of a promissory note by indorsement by an insane payee is voidable if not absolutely void, since it involves the making of a contract to which a lunatic cannot give a valid consent.19 So, a contract by which an insane person assumes the liabilities of a surety is void, even though the other party had no knowledge of his insanity.20 And a release of a claim for damages for a personal injury, obtained from the releasor while he was insane, is voidable, and he is not estopped from avoiding it by having accepted money under it.21 Again, an insane person has no power to appoint an agent whose acts shall be binding upon him,22 and the supervening insanity of a principal revokes the authority of his agent, except where the agency involves the grant of a power coupled with an interest, or where a valuable consideration has been given by a third person trusting to the apparent authority of the agent and in ignorance of the principal's insanity; 28 and

18 Hosler v. Beard, 54 Ohio St. 398, 43 N. E. 1040, 35 L. R. A. 161, 56 Am. St. Rep. 720; Seaver v. Phelps, 11 Pick. (Mass.) 304, 22 Am. Dec. 372; Van Patton v. Beals, 46 Iowa, 62; McClain v. Davis, 77 Ind. 419; Moore v. Hershey, 90 Pa. 196; Wirebach v. First Nat. Bank, 97 Pa. 543, 39 Am. Rep. 821; Sentance v. Poole, 3 Car. & P. 1. But see, per contra, Lancaster County Nat. Bank v. Moore, 78 Pa. 407, 21 Am. Rep. 24; Bank v. Sneed, 97 Tenn. 120, 36 S. W. 716, 34 L. R. A. 274, 56 Am. St. Rep. 788.

19 Walker v. Winn, 142 Ala. 560, 39 South. 12, 110 Am. St. Rep. 50, 4 Ann. Cas. 537; Burke v. Allen, 29 N. H. 106, 61 Am. Dec. 642; Pittsburgh Nat. Bank v. Palmer, 22 Pittsb. Leg. J. (O. S.) 189.

20 Edwards v. Davenport (C. C.) 20 Fed. 756; Van Patton v. Beals, 46 Iowa, 62. But the insanity of a surety is no defense to his liability, where the note sued on was a renewal of a similar note imposing the same liability upon him, which he signed when sane. Whitaker v. First Nat. Bank, 163 Ky. 623, 174 S. W. 47.

21 Texas Pac. Ry. Co. v. Crow, 3 Tex. Civ. App. 266, 22 S. W. 928. 22 Amos v. American Trust & Sav. Bank, 125 Ill. App. 91.

23 Davis v. Lane, 10 N. H. 156; Matthiessen & Weichers Refining Co. v. McMahon, 38 N. J. Law, 536; Hill v. Day, 34 N. J. Eq. 150; Motley v. Head, 43 Vt. 633; Bunce v. Gallagher, 5 Blatchf. 481, Fed. Cas. No. 2,133.