This section is from the book "Dart's Treatise On The Law And Practice Relating To Vendors And Purchasers Of Real Estate", by J. Henry Dart . Also available from Amazon: A treatise on the law and practice relating to vendors and purchasers of real estate.
(f) Johnson v. Bye, (1665) 1 Sid. 258; and see Liverpool Association v. Fairhurst, (1854) 9 Ex. at p. 430; 23 L. J. Ex. 163. See Re A. and M. (Debtors), 1926, Ch. 274.
(g) R. Leslie, Ltd. v. Sheill, 1914, 3 K. B. 607.
(h) Per Byles, J., in Barnard v. Haggis, 32 L. J. C. P. 189.
Contracts for the sale of land (i). The effect of s. 2 is doubtful. Coleridge, C.j. (k) held that the section was of wide application, while Kekewich, J. (l) seemed to think that the second section applied only to the three classes of contracts mentioned in the first section. The view taken by Coleridge, J. appears to be the more correct one,the words in s. 2 "any ratification made after full age of any promise or contract made during infancy," being very comprehensive. At Common Law where an infant acquired under a contract a beneficial interest in property, he would be bound by the contract unless he disclaimed within a reasonable time, after attaining twenty-one (m), while he would not be bound by a contract wholly executory unless ratified after attaining his majority. This distinction, it is conceived, still exists; hence s. 2 must apply to contracts which are invalid until ratified, and a contract for the purchase of land would be within the section, while wholly executory, but not when it has ceased to be so (n).
Again, the proposed vendor may be a lunatic or idiot; in which case his conveyance may be set aside by his committee during his life, or by his representatives after his death, and probably by himself if he recovers, as against a purchaser who had dealt with him with knowledge of his incapacity (o). But both at Law (p) and in Equity, the authorities show that sale-transactions with a person apparently sane, though afterwards found to be of unsound mind, will not be set aside against those who have dealt with him in the band fide belief that he was of competent understanding (q). The dictum of Byrne, J., in Baldwyn v. Smith (r), "A man, while of unsound mind, entered into a contract to purchase an estate. The contract was accordingly voidable," goes too far, and cannot be upheld. Again, a sale or other disposition of property will not be invalidated, merely on proof that the person making it was subject to insane delusions, even though connected with the subject-matter, unless the delusions are found to be such as render him incompetent to deal with his property (a). It seems, however, that a voluntary conveyance or a settlement by a lunatic is void (t). In Imperial Loan Co. v. Stone, Lord Esher (w) summed up the result of the cases as follows: "When a person enters into a contract, and afterwards alleges that he was so insane at the time that he did not know what he was doing, and proves the allegation, the contract is as binding on him in every respect, whether it is executory or executed, as if he had been sane when he made it, unless he can prove further that the person with whom he contracted knew him to be so insane as not to be capable of understanding what he was about," and, in the same case Lopes, L.j., said, "In order to avoid a fair contract on the ground of insanity, the mental incapacity of the one must be known to the other of the contracting parties."
Lunatics, Bales by, how far void or voidable.
(i) Duncan v. Dixon, (1890) 44 Ch. D. 211; 59 L. J. Ch. 437; but a mortgage of real property is void under the Act: Nottingham, etc. Building Soc. v. Thurstan, 1903, A. C. 6; 72 L. J. Ch. 134.
(k) Coxhead v. Mullis, (1878) 3 C. P. D. 439; 42 L. J. C. P. 761.
(l) Duncan v. Dixon, sup.; and see inf., p. 26.
(m) Bac. Abr. "Infancy and Age " (1) 5; Co. Litt. 380 (b); and see North Western S. Co. v. M'michael, (1850) 5 Ex. at pp. 123, 124; 20 L. J. Ex. 97.
(n) See Whittingham v. Murdy, (1889) 60 L. T. 956; Carter v. Silber, 1892, 2 Ch. 278; 1893, A. C. 360; Roberts v. Gray, 1913, 1 K. B. 520.
(o) Molton v. Camroux, (1849) 4 Ex. 17; 18 L. J. Ex. 356; Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599; 61 L. J. Q. B. 449.
(p) Molton v. Camroux, sup.; Beavan v. M'donnell, (1854) 9 Ex. 309; 23 L. J. Ex. 94; Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599.
(q) See Imperial Loan Co v. Stone, sup.; Elliott v. lnce, (1857)
7 D. M. & G. 475; 26 L. J. Ch. 821; and Niell v. Morley, (1804) 9 Ves. 478; Selby v. Jackson, (1843) 6 Beav. 192, 204; 13 L. J. Ch. 249; Price v. Berrington, (1851) 3 M. & G. 486, 497, 498; Campbell v. Hooper, (1855) 3 S. & G. 153; 24 L. J. Oh. 644. In Frost v. Beavan, (1853) 17 Jur. 369; 22 L. J. Ch. 638, the Court on a purchase by a lunatic rescinded the contract, and ordered the deposit to be returned (the vendor's expenses being first deducted); but this, it is believed, was by arrangement, it being understood that the vendor sold with notice of the insanity. As to relief against a purchaser on the ground of the vendor's insanity, see Price v. Berrington, sup.; Wright v. Proud, (1806) 13 Ves. 136. A purchaser who has contracted with a lunatic before he became insane may obtain specific performance in the form of a declaration: Hall v. Warren, (1804) 9 Ves. 605, and a vesting order: see Mason v. M., (1878) 7 Ch. D. 707; Re Pagani, 1892, 1 Ch. 236.
(r) 1900, 1 Ch. p. 590; 69 L. J. Ch. 336.
(s) Jenkins v. Morris, (1880) 14 Ch. D. 674; 49 L. J. Ch. 392; Birkin v. Wing, (1890) 63 L. T. 80. As to the distinction in this respect between executed and executory contracts, see Molton v. Camroux, (1848) 2 Ex. 487; 18 L. J. Ex. 68; and Matthews v. Baxter, (1873) L. R.
8 Ex. 132; 42 L. J. Ex. 731.
(t) Elliott v. Ince, 7 D. M. & G. 475; 26 L. J. Ch. 821; Manning v. Gill, (1872) 13 Eq. 485; 41 L. J. Ch. 736.
(u) 1892, 1 Q. B. at p. 601; 61 L. J. Q. B. 449; York Glass Co. v. Jubb, 42 T. L. R. 1.
By the Lunacy Act, 1890, s. 120, the Judge may, by order, authorise the committee of the estate of the lunatic to sell, exchange, partition, or lease, any property belonging to the lunatic; to execute any power of leasing vested in a lunatic having a limited estate only in the property over which the power extends; to perform any contract entered into by the lunatic before his lunacy and relating to his property; to exercise any power vested in the lunatic for his own benefit, or as a trustee or guardian; and in (the name and on behalf of the lunatic to execute and do all such assurances and things for giving effect to any order under the Act as the Judge may direct. If the lunatic is not so found by inquisition, the powers are exercisable on behalf of the lunatic by such person and in such manner as the Judge in Lunacy or, subject to Rules in Lunacy, a Master, directs (x).