In some states it is held that the contract of an insane person may be avoided by him, though it is fair and reasonable, and though it was entered into by the other party in perfect good faith, and in ignorance of his infirmity.32 "The fairness of the defendant's conduct," it was said in a leading Massachusetts case, "cannot supply the plaintiff's want of capacity." 33
The weight of authority in this country, however, is in favor of the doctrine that, if the sane party did not know, or have reasonable cause to know, of the other's insanity, and acted in good faith, and the contract was fair, and has been so far executed that the parties cannot be placed in statu quo, it cannot be avoided.34 In Molton v. Camroux, a leading English case, a lunatic had purchased annuities of a society, paid the money, and died, whereupon his administratrix sued the society to recover back the money on the ground that the contract was void. The jury found that at the time of the contract the deceased was insane, but that there was nothing to indicate this to the defendant, and that the transaction was in good faith. It was held that the money could not be recovered. "The modern cases show," it was said, "that when that state of mind was unknown to the other contracting party, and no advantage was taken of the lunatic, the defense cannot prevail, especially where the contract is not merely executory, but executed in whole or in part, and the parties cannot be restored to their original positate, 14 Pa. 417, 53 Am. Dec. 554; Topeka Water Supply Co. v. Root, 56 Kan. 1S7. 42 Pac. 715; Lower v. Schumacher, 61 Kan. 625. 60 Pac. 538; Stitzel v. Farley, 148 I11. App. 635 (holding contract binding if made during a lucid interval). See "Insane Persons," Dec. Dig. (Key-No.) §§ 26, 73; Cent. Dig. §§ 86, 1S6.
32 Seaver v. Phelps, 11 Pick. (Mass.) 304, 22 Am. Dec. 372; Gibson v. So-per, 6 Gray, 279, 66 Am. Dec. 414; HOVEY v. HOBSON, 53 Me. 451, 89 Am. Dec. 705, Throckmorton. Cas. Contracts, 149; Fitzgerald v. Reed, 9 Smedes & M. (Miss.) 94; Sullivan v. Flynn, 20 D. C. 396; Brigham v. Fayerweather, 144 Mass. 52, 10 N. E. 735; Orr v. Mortgage Co., 107 Ga. 499, 33 S. E. 708; Dewey v. Allgire, 37 Neb. 6, 55 N. W. 276, 40 Am. St Rep. 46S; Wager v. Wagoner, 53 Neb. 511, 73 N. W. 937. Bee "Insane Persons" Dec. Dig. (Key-No.) § 73; Cent. Dig. § 125.
33 Seaver v. Phelps, supra. See "Insane Persons," Dec. Dig. (Key-No.) §§ 61, 18; Cent. Dig. §§ 98, 99, 125.
34 But if the other party did not act in good faith or had reasonable ground to believe the insane person incompetent, the contract may be avoided, although the consideration cannot be returned. Smith's Committee v. For-Rvthe, 90 S. W. 1075, 28 Ky. Law Rep. 1034. Knowledge that a person is an invalid and cannot write with his own hand does not of itself constitute notice of unsoundness. Groff v. Stitzer, 77 N. J. Eq. 260, 77 Atl. 46. See "Insane Persons" Dec. Dig. (Key-No.) § 73; Cent. Dig. § 125.
tion." 35 This case has been expressly followed and applied in a number of our courts, while others, though not citing it, have laid down the same doctrine.86 Under this rule the burden of proof is on the insane person to show his incapacity, and upon the other party to show his ignorance of such incapacity and his good faith and fair dealing.87
The distinctions between executory and executed contracts however, suggested in Molton v. Camroux, appear to have been repudiated in England, and in that country the more recent rule appears to be that the contract of a lunatic is binding unless the other party knew of his condition.38
The doctrine thus stated, however, is not to be applied as a technical rule in all cases. "The cases will disclose," it has been said, "that one dealing with an insane person, and not knowing his condition, or any facts to put him on his guard, will be protected by the courts of law and equity against such person's repudiating his contract on the ground of his mental incapacity. But the rule is not a technical one, to be relied on at all times and under all circumstances. It is applied in each case only to prevent a wrong being done, and is based on the principle that 'the law will not permit the lunatic's infirmity to be made an instrument of fraud.' " 39
35 Molton v. Camroux, 2 Exch. 489, 4 Exch. 17. See "Insane Persons" Dec. Dig. (Key-No.) § 13; Cent. Dig. § 125.
36 Eaton v. Eaton, 37 N. J. Law, 108, 18 Am. Rep. 716; MUTUAL LIFE INS. CO. v. HUNT, 79 N. Y. 541, Throckmorton, Cas. Contracts, 153; Ingra-ham v. Baldwin, 9 N. Y. 45; Boyer v. Berryman, 123 Ind. 451, 24 N. E. 249; Lincoln v. Buckmaster, 32 Vt. 652; Young v. Stevens, 48 N. H. 136, 2 Am. Rep. 202, 97 Am. Dec. 592; Schaps v. Lehner, 54 Minn. 208, 55 N. W. 911; Gribben v. Maxwell, 34 Kan. 8, 7 Pac. 584, 55 Am. Rep. 233; Abbott v. Creal, 56 Iowa, 175, 9 N. W. 115; Shoulters v. Allen, 51 Mich. 529, 16 N. W. 888; Matthiessen & Weichers Refining Co. v. McMahon's Adm'r, 38 N. J. Law, 536; Burnham v. Kidwell, 113 I11. 425; Scanlan v. Cobb, 85 I11. 296; Northwestern Ins. Co. v. Blankenship, 94 Ind. 535, 48 Am. Rep. 185; McCormick v. Littler, 85 I11. 62, 28 Am. Rep. 610; Beals v. See, 10 Pa. 56, 49 Am. Dec. 573; Riggan v. Green, 80 N. C. 236, 30 Am. Rep. 77; Myers v. Knabe, 51 Kan. 720, 33 Pac. 602; Harrison v. Otley, 101 Iowa, 652, 70 N. W. 724; Flach v. Gottschalk Co., 88 Md. 368, 41 Atl. 908, 42 L. R. A. 745, 71 Am. St. Rep. 418; McKenzie v. Donnell, 151 Mo. 431, 52 S. W. 214; Jamison v. Culligan, 151 Mo. 410, 52 S. W. 224. If, however, the lunatic has received no benefit under the contract, it has been said that he can recover what he has parted with, notwithstanding the other party's good faith. Lincoln v. Buckmaster, 32 Vt 658; Van Patton v. Beals, 46 Iowa, 63. See "Insane Persons," Dec. Dig. (Key-No.) § 13; Cent. Dig. § 125.
37 Ipock v. Atlantic & N. C. R. Co., 158 N. C. 445, 74 S. E. 352. See "Insane Persons," Dec. Dig. (Key-No.) § 4; Cent. Dig. § 6.
38 Imperial Loan Co. v. Stone  1 Q. B. 599. See Anson, Cont. (8th Ed.) 120. See "Insane Persons," Dec. Dig. (Key-No.) § 73; Cent. Dig. § 125.
39 Knowlton's Anson, Cont 116, note.