the fact of insanity has been judicially established, is that 200 Parker v. Marco (C. C.) 76 Fed. 510; Ex parte Northington, 202 the wife of a lunatic joined with him in conveying her land in part payment for a steamboat purchased by him, knowing his insanity but concealing it from the other party, and acquiesced in the purchase until, owing to a seizure of the boat on a claim for repairs and his becoming insolvent, it was too late for the other party to be put in statu quo.2 So, where a mortgage was given to secure the purchase price of personal property sold by defendants to the mortgagors, who were at the time apparently sane, or supposed by the defendants to be so, and the contract has become executed by the maturity of the debt, a foreclosure and sale, and the deeding of the premises to the purchaser, a bill to have the mortgage, foreclosure, and deed declared void. should be dismissed for want of equity, as the court has no power to restore the defendants to their condition before they parted with their property.208 But it seems that a rescission may be ordered if a substantial, though not entirely complete, restoration to the other party can be made, as was held in a case where the insane person had acquired real property in a trade, and, at the time of seeking rescission, a portion of the land had been washed away by the return of a river to an old channel which adjoined the land, and to which the river was at any time liable to return.204 And although the situation may be such that the other party to the contract cannot be restored to his former situation by the act of the insane person or his guardian, yet rescission will not be refused if this can be accomplished by the act of the court.205 It is also a part of the rule that, when a rescission is effected, the insane person should be restored to his former condition in respect to the subject of the contract. One receiving personal property from another, and afterwards learning that the latter is insane, must take ordinary care of the property with a view to returning it on a rescission of the contract or on its repudiation when the insane person regains his reason.206 And where one is compelled to give 202 Rusk v. Fenton, 14 Bush (Ky.) 490, 29 Am. Rep. 413. 203 McNett v. Cooper (C. C.) 13 Fed. 586. 204 Hale v. Kobbert, 109 Iowa, 128, 80 N. W. 308. 205 Fulwider v. Ingels, 87 Ind. 414. 206 Patton v. Washington, 54 Or. 479, 103 Pac. 60. up land which he has acquired by the deed of an insane grantor, he may be charged by the decree with a suitable rent for the premises,207 against which he may set off the value of the improvements which he has made, if made in good faith, and provided they exceed in value the rent for his use of the land,208 and it appears that he may also claim reimbursement for incumbrances which he has paid off, if it appears that the insane grantor or his estate was benefited by the clearing of the title.209 So, where the consideration for a conveyance of lands by an insane grantor was an agreement for his support and maintenance by the grantee, and the bargain was not inequitable, and the agreement has been fairly performed, the grantee should not be required to reconvey the property to the grantor's executor, on a decree for rescission by reason of the grantor's insanity, except on condition that he shall be paid the fair value of the services rendered by him.210 Finally, if the guardian of the insane person, or the latter himself on recovering his reason, elects to sue for damages in respect to a contract made while he was insane, instead of electing to rescind it, he is not required to tender back the consideration received.211 § 277. Intoxication as Ground of Rescission.-It is adequate ground for the rescission of a contract or the cancellation of a conveyance that the party executing it was, at the time, in a state of alcoholic intoxication so far advanced as to deprive him of the intelligence necessary to an understanding of the nature and consequences of his acts.212 In the law such a condition of drunkenness is regarded as a 207 Wampler v. Wolfinger, 13 Md. 337. 208 Lillard v. Coffee (Tenn. Ch. App.) 61 S. W. 1037; Ring v. Lawless, 190 Ill. 520, 60 N. E. 881. 209 See Williams v. Williams, 265 Ill. 64, 106 N. E. 476; Jefferson v. Rust, 149 Iowa, 594, 128 N. W. 954. 210 Bollnow v. Roach, 210 Ill. 364, 71 N. E. 454; Gilgallon v. Bishop, 46 App. Div. 350, 61 N. Y. Supp. 467. 211 Johnson v. Culver, 116 Ind. 278, 19 N. E. 129. 212 Thackrah v. Haas, 119 U. S. 499, 7 Sup. Ct. 311, 30 L. Ed. 486; Conley v. Nailor, 118 U. S. 127, 6 Sup. Ct. 1001, 30 L. Ed. 112; McGinley v. Cleary, 2 Alaska, 269; Cecile v. St. Denis, 14 La. 184; Prentice v. Achorn, 2 Paige (N. Y.) 30; Morrison v. McLeod, 22 N. C. temporary insanity or mental derangement,213 and in civil proceedings (as distinguished from criminal cases) it is now regarded as entirely immaterial that the intoxication was the result of the party's own voluntary and intentional over-indulgence in liquor.214 "It was once supposed to be the law that a deed obtained from a drunken man could not, for that cause, be avoided. But a more rational rule now prevails; and the law, now regarding the fact of intoxication, and not the cause or author of it, and regarding that fact as affording proof of a want of capacity to contract, which is one of the elements of every agreement, will interfere to relieve." 215 Nor do the authorities appear to make any distinction here (as is done in the case of insanity proper) in favor of those who deal with a drunken man supposing him to be sober. For it is a common-sense presumption that intoxication, carried to such a point as to make the subject incapable of understanding what he is doing, cannot fail to be obvious to any sober person who undertakes to transact business with him. Hence any dealing between persons so situated, which results in advantage to the man who is in full possession of his wits, is fraudulent per se. If, when a man is so drunk as to render him an easy prey to the designs of another, an unfair advantage is taken of his condition to procure from him an unreasonable bargain, a court of equity will interfere and rescind the contract, not on the ground of his drunkenness, but of the fraud.216 And further, where one of the parties to a sale or conveyance was intoxicated at the time, inadequacy of price is direct evidence of fraud.217 But because there must be fraud, imposition, or inadequacy of consideration in the transaction to enlist the aid of a court of equity, a transaction effected by a drunken man will not be set aside where it is beneficial to him or his family, or where it is such as he ought in good morals to abide by. Thus, if a person, while intoxicated, 218 Menkins v. Lightner, 18 Ill. 282. 214 Straughan v. Cooper, 41 Okl. 515, 139 Pac. 265. 215 French's Heirs v. French, 8 Ohio, 214, 31 Am. Dec. 441. 216 Calloway v. Witherspoon, 40 N. C. 128; Hotchkiss v. Fortson, 7 Yerg. (Tenn.) 67; Burch v. Scott, 168 N. C. 602, 84 S. E. 1035. 217 Crane v. Conklin, 1 N. J. Eq. 346, 22 Am. Dec. 519. voluntarily executes a deed of trust for the benefit of his wife and children, equity will not set it aside on the ground that undue advantage was taken of his condition.218 And for similar reasons, a person who, when sober, agrees to sign a contract cannot defend against it on the ground that he was drunk when he actually signed it.219 And on sound principles of justice, "if the party made himself drunk for the purpose of entering into agreements and then avoiding them, the fraudulent intent antedating his drunkenness would render it incompetent for him to avail of the defense." 99 220 These principles are applicable to all classes of contracts. Thus, for example, a promissory note or bill of exchange signed (or indorsed) by a person who was so intoxicated as to be unable to understand what he was doing is void as between the original parties,221 and voidable in the hands of an indorsee who is not an innocent holder,222 though it appears that the defense of intoxication cannot be made against a subsequent holder for value without notice of the intoxication of the maker of the note or indorser as the case may be.223 So also, a release, compromise, or settlement, obtained by taking advantage of the party while he was incapacitated from acting freely and intelligently by reason of intoxication, may be avoided on that ground.224 And a transfer of shares of stock in a corporation, procured from the owner while so intoxicated as to be incapable of transacting any business, by fraud, with knowledge of his condition, will be set aside in equity, especially if the considera 218 Hutchinson v. Tindall, 3 N. J. Eq. 357. And see Keeler v. Baker, 1 Heisk. (Tenn.) 639. 219 Page v. Krekey, 63 Hun, 629, 17 N. Y. Supp. 764, jugdment reversed 137 N. Y. 307, 33 N. E. 311, 21 L. R. A. 409, 33 Am. St. Rep. 731. 220 1 Daniel, Nego. Instr. (3d edn.) § 215. 221 Gore v. Gibson, 13 Mees. & W. 623; Green v. Gunsten, 154 Wis. 69, 142 N. W. 261, 46 L. R. A. (N. S.) 212. 222 Benton v. Sikyta, 84 Neb. 808, 122 N. W. 61, 24 L. R. A. (N. S.) 1057. 223 State Bank v. McCoy, 69 Pa. 204, 8 Am. Rep. 246. But compare 1 Daniel, Nego. Instr. (3d edn.) § 214. 224 Phelan v. Gardner, 43 Cal. 306; Murray v. Carlin, 67 Ill. 286; Davis v. Thornley, 204 Ill. 266, 68 N. E. 482; Lang v. Ingalls Zinc Co. (Tenn. Ch. App.) 49 S. W. 288. BLACK RESC.-46 |