Rath's Committee v. Smith
| Decision Date | 26 April 1918 |
| Citation | 180 Ky. 326 |
| Parties | Rath's Committee v. Smith. |
| Court | Kentucky Court of Appeals |
Appeal from Logan Circuit Court.
S. R. CREWSDON and COLEMAN TAYLOR for appellant.
W. V. PERRY for appellee.
This action was instituted to reform three notes of $133.33 each, so as to read $166.66, and to enforce collection thereof when thus reformed as well as to have a certain house and lot in Russellville declared subject to said debt by reason of a mortgage given to secure the notes for five hundred dollars which were executed by Miss Grace Rath on January 8, 1915. This unmarried lady was considerably more than twenty-one years of age at the time of the execution of the papers sued on, and was the owner of a house and lot in Russellville, Kentucky. She was and had been for several years afflicted with the drug habit and at times was flighty in her conversation. Only a short time after the execution of the notes and mortgage sued on, she was by the Logan county court adjudged a lunatic and confined in the asylum for the insane, where she has since remained. The three notes with the mortgage given to secure them were executed by Miss Rath for the price of an automobile which she purchased from W. J. Barnes, the payee in the notes. By mistake of the draughtsman the three notes intended to represent five hundred dollars, the full purchase price, were drawn for one hundred thirty-three dollars and thirty-three cents, each, when they should have been made for one hundred sixty-six dollars and sixty-six cents, each, so as to make the total sum five hundred dollars. This fact seems clearly established by all the evidence. After the execution and delivery of the notes and mortgage and after the latter had been duly entered of record in the office of the clerk of the Logan county court, Barnes for the first time discovered that the sum of the three notes did not amount to five hundred dollars. At this time Miss Rath had been adjudged insane. Some time thereafter W. J. Barnes, who resided in Tennessee, sold and transferred the notes and mortgage to plaintiff, Eugene Smith, for a valuable consideration before either of the notes became due. Smith also is a citizen of Tennessee and resided at Nashville. He was not acquainted with Miss Rath nor with the property mortgaged to secure the notes but, according to the evidence, made inquiries of a banker friend in Nashville, who once resided in Russellville, concerning Miss Rath and the property, and also made some investigation through the clerk of the Logan county court before purchasing the notes. He was, however, acquainted with the fact that the notes were for a sum less than that called for in the mortgage and less than the debt actually due by Miss Rath. He also asserts that he was wholly unacquainted with Miss Rath's mental condition and had no information of any defect in or defense to the notes and mortgage, or either of them, and is sustained by the evidence. Smith likewise asserts that his assignor, Barnes, was wholly unacquainted with the mental condition of Miss Rath at the time and before the execution of the papers, and this is fairly proven; and further that at the time of the making of the notes and mortgage she was mentally sound and that her incapacity resulted subsequent to the making of the notes sued on. A number of witnesses testify that Miss Rath for some weeks previous to the making of the papers, exhibited signs of mental derangement; that she was a dope fiend and had been for a long time and acted strangely. It is also in evidence that the mental incapacity of Miss Rath was generally known in and around the town of Russelville where she resided, and that Barnes, before entering into the trade with her by which the notes and mortgage were executed, visited Russellville and examined the property and saw and talked with...
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