Flach v. Gottschalk Co.

McSherry, C. J., delivered the opinion of the Court. There are. two questions brought up by the record in this case — the one as to the sufficiency of a replication to which the appellant demurred, and the other as to the admissibility of evidence. The replication raises the question as to a lunatic’s liability on his contract, and that particular question as now presented has not hitherto been distinctly considered and settled in Maryland. The suit was brought in April, eighteen hundred and ninety-six by the appellee against the appellant to recover the price of two barrels of whiskey sold by the former to the latter in 1894.

The appellant was adjudged a lunatic in May 1896. The declaration contains the ordinary money counts. In addition to the general issue plea, the defendant pleaded that at the time the purchase was made he was and ever since has been a lunatic. To this plea the plaintiff replied first, with a traverse, and secondly, by a replication alleging that the merchandise sued for had been sold and delivered for its fair value and had been sold and delivered when the plaintiff was unaware of the lunacy of the defendant; that the contract sued on was fair and reasonable, that the defendant had the benefit thereof and that the parties cannot now be placed in the same situation they occupied before the goods were sold and delivered.

This replication was demurred to; the demurrer was overruled and issue was finally joined. The first error complained of is this ruling on the demurrer. Speaking generally, the contracts óf a lunatic, who has not been found by an inquisition to be insane, do not belong to the class that are absolutely void, but fall within the group that is described as voidable. This is ³⁷¹ certainly the law in Maryland.

Key v. Davis, I Md. 32; Chew v. Bank of Baltimore, 14 Md. 319 ; Riley & Carter v. Aiken, 76 Aid. 595. Whilst his contracts, with some exceptions, are only voidable, it does not follow that they can always and under any circumstances be avoided and annulled by him. There are conditions which fasten upon him the obligation of some of his contracts as completely as though they were the undertakings of a perfectly sane individual. At a very early date — as long ago as the time of Littleton — it was apparently the prevailing doctrine that “ no man of full age shall be received in any plea by the law to stultify and disable his own person.” Lift. s. 405.

And so in Beverley’s case, 4 Co. Rep. 123, the Court of Kings Bench held “ that every deed, feoffment or grant which any man non compos mentis makes, is avoidable, and yet shall not' be avoided by himself, because it is a maxim in law that no man of full age shall be in any plea to be pleaded by him, received by the law to stultify himself.” As a consequence, though the Crown in some cases could, and in other cases persons who claimed under a lunatic might set up his disability, the individual himself was not permitted to do so. But this rule was subsequently relaxed and, in fact, the directly opposite position was assumed. Thus, the old writ of Dum fuit non compos mentis lay to recover back land which had been aliened by a person not in his right mind. Fits.

Nat. Brev., 202; and it was held that a lunatic could not suffer a recovery. Hume v. Burton, 1 Ridg. Par.

Cas. 16; nor execute a deed. Yates v. Boen, 2 Strange 1104; nor a bond, Faulder v. Silk, 3 Camp. 126; nor indorse a bill of exchange, Alcock v. Alcock, 3 M. & Gr. 268. And so it was held that a family settlement made by a lunatic ought to be set aside, although it was reasonable and for the convenience of the family. Clerk v. Clerk, 2 Vern. 312.

Sir W. Scott in Turner v. Meyers, 1 Hagg. C. R. 414, stated: “ It is, I conceive, perfectly clear in law that a party may come forward to maintain his own past incapacity; and also that a defect of incapacity invalidates the contract of marriage as well as any other contract.” ³⁷² This broad rule which supplanted the ancient contrary doctrine was itself afterwards qualified and restricted, and certain exceptions were engrafted on it. Thus a fine levied by a person non compos mentis was held to be good, Thompson v. Leech, 3 Mod. 305, and the reason was that the act is of a public and notorious character, done in a Court of record, and that the Court had the power of judging of the sanity of the party. And so a feoffment by a lunatic, Thompson v. Leech, Carth. 435.

Another exception — if exception it can be called, because it depends upon a wholly different principle — arises where necessaries are supplied to a lunatic; and these are excepted from the general rule on the ground that they do not require a consenting mind. But the qualification of the rule did not stop with these three exceptions, for Pollock, C. B., in Molton v. Camroux, 2 Exch. 487, affirmed in 4 Exch. 17, observed that unsoundness of mind would now be a good defence to an action upon a contract if it could be shown that the defendant was not of capacity to contract “ and the plaintiff knezv it.” In support of this view the Chief Baron cited Brozme v. Joddrell, 1 Mood. & M. 105; Baxter v. Earl of Portsmouth, 5 B. & C. 170; Dane v. Viscountess Kirknall, 8 C. & P. 679. In Beavan v. McDonnell, 9 Exch. 309, it appeared that the plaintiff entered into a written contract for the purchase of certain land at a specified price from certain persons, vendors thereof on behalf of the defendant, on the terms and conditions that the plaintiff should pay a sum of £415 as a deposit on the purchase, etc., and that if the plaintiff should neglect to comply with the conditions on his part the deposit should be forfeited to the vendors. The plaintiff paid the deposit.

At the time he entered into the contract the plaintiff was a lunatic and incapable of understanding its nature; but this the defendant did not know, and the contract was on his part a bona ñde one. The lunatic sued to recover back the deposit. The defendant by plea alleged that the money had been received under the contract; and the plaintiff replied that when the contract was made and the money was paid under it, he was a lunatic and incapable ³⁷³ of contracting, and that the contract was not of any benefit to him; and he averred that the defendant had notice of this. The defendant rejoined that neither the vendors nor the defendant when the plaintiff made the contract or paid the money “ knew that he was a lunatic, or of unsound mind and incapable by reason of unsoundness of understanding the meaning of a contract, but made the said contract with him fairly and in good faith, believing that he was able to understand the same.” This rejoinder was demurred to but was held to be a good rejoinder.

The question — and the precise question — involved in the case at bar, was thus decided adversely to the lunatic in Beavan v. McDonnell. In Elliot v. Ince, 4 De G. M. & G. 475, Lord Chancellor Cranworth spoke of the decision in Molton v. Camroux, 2 Exch. 487, as a decision of necessity, and he observed that a contrary doctrine would render all ordinary dealings between man and man unsafe. “ How is a shopkeeper,” asked his Lordship, “ who sells his goods, to know whether a customer is or not of sound mind? Perhaps,” he continued, “ the same principle may apply to sales of land or mortgages. Lord Truro seems to have thought it would: so at least I collect from what he says in Price v. Berrington,” 3 M. & G. 498.

And the more recent case of the Imp. Loan Co. v. Stone, 1 Q. B. (1892) 599, is equally emphatic. Sir Frederick Pollock in his valuable work on Contracts, 6th Edition, page 89, states that “ The rule is now settled, however, that the contract of a lunatic or drunken man, who by reason of lunacy or drunkenness is not capable of understanding its terms or forming a rational judgment of its effects on his interests, is not void but only voidable at his option; and this only if his state is known to the other party.” Not only is this the settled and accepted law of England, but the same principle may be regarded as prevailing in this country. 11 Am. & Eng.

Ency.-Law, 136. If the contract be fair and bona fide, and there is no element of fraud or imposition in it, and if the other party does not know of the insanity and the parties can ³⁷⁴ not be placed in the position they occupied before the contract was executed by the sane party, there is no reason why the lunatic should be allowed to retain what he has acquired under the contract and at the same time be permitted to escape from all liability arising out of it. Though the question now before us was not involved in Chew & Goldsborough v. The Bank of Balto., 14 Md. 319 , this Court in dealing with that case recognized the principle which must control this; for on the page just mentioned the Court says: “There are cases