This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In many, if not all, jurisdictions, the statutes provide for a proceeding to determine directly the question of the sanity or insanity of the person against whom such proceeding is instituted, and for appointing a guardian for him in case it is decided that he is insane. While the test of insanity for the appointment of a guardian on adjudication is in some respects different from the test for contractual capacity, such an adjudication binds the world,1 though the party instituting the proceedings is not bound more than others.2 The effect of such an adjudication, where a guardian has been appointed and has taken control of the estate of his ward, is to render all contracts and conveyances of the ward during such guardianship void.3 So after such adjudication a check given by the lunatic is void and the etc., Society v. De Lashmutt, 67 Fed. 399, a grantee was not allowed subrogation as to the amount of the purchase money spent on necessaries for the insane person.
26 McCracken v. Levi, 24 Ohio C. C. 584.
27 Orr v. Equitable, etc., Co., 107 Ga. 499; 33 S. E. 708; Hovey v. Hobson, 53 Me. 451; 89 Am. Dec. 705. To the same effect is Seaver v. Phelps, 11 Pick. (Mass.) 304; 22 Am. Dec. 372. Where a pledge of a note was rescinded without placing the adversary party in statu quo.
1 American, etc., Co. v. Boone, 102 Ga. 202; 66 Am. St. Rep. 167; 40 L. R. A. 250; 29 S. E. 182.
2 Hughes v. Jones, 116 N. Y. 67; 15 Am. St. Rep. 386; 5 L. R. A. 632; 22 N E. 446; Gangwere's Estate, 14 Pa. St. 417; 53 Am. Dec. 554.
3 American, etc., Co. v. Boone, 102 Ga. 202; 66 Am. St. Rep. 167; 40 L. R. A. 250; 29 S. E. 182; Burn-ham v. Kidwell, 113 111. 425; New England, etc., Co. v. Spitler, 54 Kan. 560; 38 Pac. 799; Pearl v. McDowell, 3 J. J. Marsh. (Ky.) 658; 20 Am. Dec. 199; Bradbury v. Place (Me.), 10 Atl. 461; Lynch v. Dodge, 130 Mass. 458; Leonard v. Leonard, 14 Pick. (Mass.) 280; Wait v. Maxwell, 5 Pick. (Mass.) 217; 16 Am. Dec. 391; White v. Palmer, 4 Mass. 147; Payne v. Bur-dette, 84 Mo. App. 332; Carter v. Beckwith, 128 N. Y. 312; 28 N. E. 582; Wadsworth v. Sherman. 14 Barb. (N. Y.) 169; Fitzhugh v. Wilcox, 12 Barb. (N. Y.) 235; Mc-Creight v. Aiken, Rice (S. C.) 56; Elston v. Jasper, 45 Tex. 409; Han-ley v. Loan Co., 44 W. Va. 450; 29 S. E. 1002.
4 American, etc., Co. v. Boone, 102 Ga. 202; 66 Am. St. Rep. 167; 40 L. R. A. 250; 29 S. E. 182.
5 McCormick v. Littler, 85 111. 62; 28 Am. Rep. 610; Water, etc., Co. v. Root, 56 Kan. 187; 42 Pac. 715. Contra, Kiehne v. Wessell, 53 Mo. App. 667.
6 Thorpe v. Hanscom, 64 Minn. 201; 66 X. W. 1.
7 Water, etc., Co. v. Root, 55 Kan. 187; 42 Pac. 715.
8 Lower v. Schumacher, 61 Kan. 625; 60 Pac. 538.
9 Kimball v. Bumgardner, 16 Ohio C. C. 587; 9 Ohio C. D. 409.
10 Willwerth v. Leonard, 156 Mass. 277; 31 N. E. 299.
11 In this case, however, the decree reinstating the adjudication jurisdictions be restored by a discharge from an asylum as cured, without formal adjudication of restoration of sanity.12 Thus a physician's discharge from an asylum restores capacity to sue;13 and a similar view of the effect of a discharge from an asylum as cured was taken in a divorce suit,14 and in a suit on an insurance policy involving the question of the sanity of the insured when he met his death.10 The adjudication has been held binding though made in another state, and one in which the person adjudged insane was not domiciled, but in which he had been appointed the administrator of an estate.10 There is some authority for holding in opposition to the majority view that adjudication and guardianship make only a prima facie case of incapacity to make subsequent contracts and conveyances.17 But in most of the cases cited in support of this proposition, the contract or conveyance was made before the adjudication but within the time during which insanity has been found to exist.18 In such case the effect of the adjudication is "no more than prima facie evidence as to the past condition of was held to be erroneous, and further the trial court was held never to have acquired jurisdiction. Mitchell v. Spaulding, 206 Pa. St. 220; 55 Atl. 968.
12 Clay v. Hammond, 199 111. 370; 93 Am. St. Rep. 146; 65 X. E. 352; Topeka, etc.. Co. v. Root, 56 Kan. 187; 42 Pac. 715.
13 Kellogg v. Cochran, 87 Cal. 192; 12 L. R. A. 104; 25 Pac. 677.
14 Rodgers v. Rodgers, 56 Kan. 483; 43 Pac. 779.
15 Mutual, etc., Co. v. Wisvell, 56 Kan. 765; 35 L. R. A. 258; 44 Pac. 996.
16 American, etc., Co. v. Boone, 102 Ga. 202; 66 Am. St. Rep. 167; 40 L. R. A. 250; 29 S. E. 182. In this case A, after becoming insane, and being adjudged insane by the Florida courts, where he was acting as administrator, drew a check on a Georgia bank, which paid the check without any notice of his condition or of the adjudication. The check was on a fund held by A as administrator, but deposited by him to his personal account with knowledge of the bank. Suit was brought by A's successor as administrator against the bank, for the amount of the original deposit. He recovered the amount of the check drawn by A while insane, on the theory that the check was void and the bank paid at its peril; but he also recovered checks drawn before insanity, on the theory that the deposit was a trust fund to the knowledge of the bank.
17 Field v. Lucas, 21 Ga. 447; 68 Am. Dec. 465; Armstrong v. Short, 1 Hawks. (X. C.) 11.
18 Hopson v. Boyd, 6 B. Mon. (Ky.) 296 (where the sale was 16 years before the inquisition) ; Kern v. Kern, 51 X. J. Eq. 574; 26 Atl.
the person,19 a proposition supported by ample authority.20 A note given by a person as surety, pending an inquisition of lunacy is said to be 'prima facie made while insane.21 In the suit for an adjudication as to sanity, the court has no power to pass upon the validity of past transfers of property.22 Possibly contracts for necessaries are an exception to the general rule concerning contracts after adjudication. If, however, the guardian of the insane person has contracted with one person for the support of the insane ward, and such support is furnished a third person who renders services as nurse, not under contract with the guardian, cannot recover therefor on the theory that such services were necessaries.23
837; Mott v. Mott, 49 N. J. Eq. 192; 22 Atl. 997; Reeves v. Morgan, 48 N. J. Eq. 415; 21 Atl. 1040; Hart v. Deamer, 6 Wend. (N. Y.) 497 (two months before); Rip-py V. Gant, 4 Ired. Eq. (N. C.) 443 (thirteen months before); Noel v. Kerper, 53 Pa. St. 97; Gang-were's Estate. 14 Pa. St. 417; 53 Am. Dec. 554 (about six months before ).
19 Hopson v. Boyd, 6 B. Mon. (Ky.) 296, 297.
20 Sergeson v. Sealy, 2 Atk. 412;
Titcomb v. Vantyle, 84 111. 317; Wall v. Hill, 1 B. Mon. (Ky.) 290; 36 Am. Dec. 578.
21 Moore v. Hershey, 90 Pa. St. 196.
22 Hughes v. Jones, 116 N. Y. 67; 15 Am. St. Rep. 386; 5 L. R. A. 632; 22 N. E. 446.
23 Further the services were rendered by a nephew of the insane person, apparently without intent at the time to charge therefor. Schramek v. Shepeck, - Wis. - ; 98 N. W. 213.