Nat'l Metal Edge Box Co. v. Vanderveer

• Decision Date: 20 March 1912
• Citation: 82 A. 837,85 Vt. 488
• Parties: NATIONAL METAL EDGE BOX CO. v. VANDERVEER et al.
• Court: Vermont Supreme Court

82 A. 837

85 Vt. 488

NATIONAL METAL EDGE BOX CO.

v. VANDERVEER et al.

Supreme Court of Vermont. Bennington.

March 20, 1912.

Appeal in Chancery, Bennington County; E. L. Waterman, Chancellor.

Suit by the National Metal Edge Box Company against J. J. Vanderveer and others to foreclose a mortgage. From a decree for the petitioner, the petitionees appeal. Affirmed and remanded.

Argued before ROWELL, C. J., and MUNSON, WATSON, HASELTON, and POWERS, JJ.

O. E. Butterfield, for appellants.

Chase & Daley, for appellee.

ROWELL, C. J. This is a petition in chancery to foreclose a mortgage given to the petitioner by the defendant Jean J. Vanderveer and his wife the 15th of January, 1909, at which time he was insane, and had been from and including July 16, 1908, and could not understand the nature and quality of his acts so as to comprehend the results that might flow from them. But he had not been adjudged insane, and was not till about a year and a half afterwards, when he was so adjudged and his wife appointed his guardian, and she is defending as such and as a signer of the mortgage, which was given to secure the money the petitioner paid at the special instance and request of Vanderveer to take up a mortgage on the same premises, given by Vanderveer the 16th of July, 1908, to secure a part of the purchase price of the premises, and which he was being pressed to pay. The petitioner did not know, and the case shows nothing to charge it with knowing, that Vanderveer was insane when he gave it the note and mortgage; but, on the contrary, it is found by the master that the giving of them to the petitioner was a sane act, and a proper and prudent proceeding to take up the former mortgage, and was such a transaction as any man of sound judgment would be expected to do, and was necessary, to protect his interest in the property.

Sufch being the case, the decree of foreclosure appealed from is right, for when, as here, no inquisition nor adjudication of lunacy precedes the transaction, courts of equity do not, as a general rule, set aside the contracts of lunatics that have been executed, if made in the ordinary course of business, on sufficient consideration, of which the lunatic had the benefit, and are fair and reasonable in the particular case, and the parties cannot be placed in their former state, unless the mental condition of the lunatic was known to the other party, or he is chargeable with knowing it. This is undoubtedly the rule in England, and the prevailing rule in this country we think; and we are committed to it in this state, and have been for more than 50 years, as shown by Lincoln v. Buckmaster, 32 Vt. 652, decided in 1860, in which the rule above stated was discussed, approved, and acted upon though the contract was set aside because of the foolhardiness and folly of the other party in leading the lunatic into such a contract as he did, from which the lunatic derived no benefit.

The Mutual Life Ins. Co. v. Hunt, 79 N. Y. 541, was for the foreclosure of a bond and a mortgage. The case was tried below on the assumption that, when the mortgagor executed the papers, she was of unsound mind, and not capable of executing them, yet it was there held that as the case presented a contract executed on a valuable consideration of which the lunatic had the benefit, made by the plaintiff in good faith, without fraud or unfairness, without knowledge of the insanity, and without notice or information calling for inquiry, the plaintiff was entitled to recover. That holding was sustained by the Court of Appeals, both on principle and authority. On principle, because the plaintiff's money was had by the defendant, appropriated to her use, and thus tended to increase the body of her estate, and though in...