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DAVID S. SHOULTERS V. DAVID ALLEN, IMPLEADED WITH

JAMES INGALLS.

Incompetency of signer of note.

One who in good faith takes a note signed by a person of whose incom-
petency to do business he has no notice, and in a transaction which
is not likely to call his attention to it, can recover on the note.
A showing of business incapacity which consists of evidence of inability
to learn to read beyond the alphabet, or to count more than twenty,
and of a preference for large coins over small ones, regardless of
value, is largely counterbalanced by proof of industrious habits,
moral living, exercise of the franchise, and the occasional transac-
tion of business in buying, selling, and giving security.

Where a man, who agreed to furnish a team for farm use, signed a note
given for a horse, and afterwards, in a suit thereon, defended on
the ground that he was incompetent to make the note, it was held
that the question whether the purchase was necessary for his use did
not arise where the horse was bought for farm use, and was actually
taken on the farm and used.

Error to Genesce. (Newton, J.) Oct. 5.-Oct. 17.
Affirmed.

ASSUMPSTг. Defendant brings error.

Long & Gold for appellant.

George M. Walker and Howard & Thayer for appellee. If one is so imbecile as to be incapable of understanding what he is contracting for, but receives benefit from the contract, he will be liable upon it if the other party acted in good faith, having no knowledge of his condition and taking no advantage of him: 2 Kent's Com. 451; Mutual Life Ins. Co. v. IIunt 79 N. Y. 541; Riggs v. American Tract Society 84 N. Y. 330; Loomis v. Spencer 2 Paige 153; Wilder v. Weakley 34 Ind. 181; Lancaster County Bk. v. Moore 78 Penn. St. 407; State Bank v. McCoy 69 Id. 204; Eaton v. Eaton 8 Vroom 108; Matter of Beckwith 3 Hun 443; Behrens v. McKenzie 23 Iowa 333; if a bona fide contract is made with a lunatic who is apparently sane, it

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cannot be rescinded by him or his representatives unless the parties can be placed in statu quo: Dane v. Kirkwall 8 C. & P. 679; Molton v. Camroux 2 Exch. 487: 4 Exch. 17; La Rue v. Gilkyson 4 Penn. St. 375; Scanlan v. Cobb 85 Ill. 296.

COOLEY, J. This action is upon a promissory note given by defendant Ingalls on the purchase of a horse, and signed by Allen as joint maker. Defense is made for Allen; the ground being that when he signed the note he was an imbecile, and had been from his infancy.

It appears that the note was given on a purchase of the horse by Ingalls of the plaintiff. Ingalls at the time was working a farm of fifty-eight acres owned by Brown, and Brown was with him when the purchase was made and the note given. The horse was purchased for use on the farm, and was taken upon it and used. It is not claimed that there was any fraud in the sale, or that the price was unreasonable. Plaintiff sold it in good faith, without any knowledge or notice of deficiency in intellect on the part of Allen, and nothing appears to have occurred at the time of the sale to put him on his guard.

The showing of mental incompetency on the part of the defense is apparently very strong. Witnesses testify that Allen attended school, but could not get beyond learning the alphabet. He could not count, some say five, others say twenty. He knew nothing of the value of money, and would take a silver piece in preference to one of gold if it were larger. He would eat whatever was put upon his plate, be it much or little. Whoever was confided in by him could do what he pleased with him, and he had no capacity whatever of self-protection against overreaching.

On the other hand, it was shown, mainly by defendant's witnesses, that he was industrious and had cleared up his farm by his own labor and by exchanging with others, and that until after this note was given no guardian had been appointed for him. His neighbors dealt with him in a small way, apparently without any sense of wrong. Georgo E. Taylor, one of defendant's witnesses, had dealt with him

on fifteen or twenty occasions, and once, as agent for another person, had loaned him money and taken a mortgage for it. Ira Potter had bought timber of him. William E. Brown had traded oxen with him, agreeing upon the boot to be paid. David Richards had not only bought wood of him, but had performed the marriage ceremony for him, and Allen appears to be now living without, so far as we are informed, any reproach in the relations then established. Surely this evidence goes very far to overthrow the apparent case made for the plaintiff. It was also shown that Allen was registered as a voter and voted without objection.

It is not necessary, however, to find that Allen, when the note was given, had capacity sufficient for the transaction of ordinary business; it is enough to sustain the note that plaintiff dealt with him in good faith, and without notice of want of capacity in a transaction not calculated to put him on his guard. Nace v. Boyer 30 Penn. St. 99; National Bank v. Moore 78 Penn. St. 407; Mutual Life Ins. Co. v. Hunt 79 N. Y. 541; Wilder v. Weakley 34 Ind. 181 1; Henderson v. McGregor 30 Wis. 78; Yauger v. Skinner 1 McCarter 389; Young v. Stevens 48 N. H. 133.

It was contended for defendant that in order to entitle plaintiff to recover he should make it appear that the purchase was necessary for the defendant's use; but the judge ruled otherwise. But as it appears without contradiction that the horse was bought for the use of the farm, and was taken there and used, we do not think this question arises. Allen, according to the evidence, was to furnish a team for the farm; and though Ingalls subsequently took the horse and traded it off, we do not know that it was not in pursuance of some subsequent arrangement.

Complaint is made of some rulings on the admission of evidence, but we discover no clear error, and think the judgment should be affirmed with costs.

The other Justices concurred.

51 532 66 341

HIRAM K. GOODALE V. ANSIL R. PATTERSON

Married woman's absolute property-Record of assignment of mortgage—
Notice, to purchaser of mortgager's interest, of assignment
by mortgagee.

Where a man and wife unite in conveying property and the grantee
gives back to each an individual mortgage thereon, the wife becomes
absolute owner of her mortgage in her own right, and can dispose
of it as she pleases and as if she were single.

Comp. L. § 4235, providing that recording the assignment of a mortgage shall not be such notice of the assignment as to invalidate payments made by the mortgager to the mortgagee, applies where the payment, though not actually made by the mortgager, is so made as to release him from liability, as by an arrangement between all parties that he should deed the land to the person making the payment.

Where it is understood between a mortgager and mortgagees that the
mortgager shall convey to such person as one of the mortgagees
shall designate, an assignment by the other mortgagce will not affect
a purchaser who, in good faith, takes conveyance from the mortga
ger, without notice or knowledge of such assignment; the assignee
is subject to the same equities as the assignor, and if the assignor
afterwards gives a discharge of the mortgage to the purchaser the
latter is entitled to regard it as a regular and valid release thereof.

Appeal from Eaton. (Hooker, J.) Oct. 5.-Oct. 17.
BILL to clear title. Defendant appeals.

Sagendorph & Powers for complainant.

McPeek & Tinkham for defendant.

Affirmed.

GRAVES, C. J. In 1868 Norman Foster was the owner of forty acres of land in Eaton county, subject to a mortgage given to one Adams for $225. He was living on bad terms with his wife and they agreed to separate, and by advice of counsel they united in a conveyance of the land to John O'Neil, who executed to each a mortgage thereon, without covenants. The mortgage to Mrs. Foster was for $500, and that to her husband was for $725. It was orally

understood, as a part of the scheme, that O'Neil should be entitled to pay the mortgages and hold the land, or should convey to such person as Foster should designate, on the terms of having the mortgages satisfied. This arrangement did not bring peace. Proceedings for divorce were commenced, and a prosecution for bigamy. Neither was carried through. For a year or two there was much litigious strife, and different attorneys were concerned. During much of the contention the defendant acted for Mrs. Foster and Mr. Sagendorph for her husband. The land deeded to O'Neil was regarded as the fund on which counsel were to rely. The conveyance to him, and the mortgages back, were given on the 18th of March, 1869.

Mrs. Foster recorded her mortgage on the 16th of April. According to the verbal arrangement, and in point of substance, O'Neil was made the custodian of the title, in order to divide the interest between Mr. and Mrs. Foster. His actual position was rather that of a trustee than that of an absolute purchaser.

March 11, 1870, Mrs. Foster made an absolute assignment of her mortgage to the defendant, and the assignment was placed on record on the 3d day of May following. Just prior to that date Mr. Sagendorph, who had control of Foster's interests and also had interests of his own, negotiated a sale of the farm to complainant, but the agreement was not in writing. May 7th, being four days after the record of the assignment from Mrs. Foster to defendant, Mr. Sagendorph concerted with Mrs. Foster for a disposition of the mortgage. He paid her a sum of money, but how much is not explained, and agreed to give her certain professional assistance; and in return she gave him an assignment of the mortgage and also a discharge of it. His purpose was to be able to treat the mortgage as satisfied in case the oral trade to complainant should be carried out, and on the other hand, if that was not done, to regard the instrument as a purchased security remaining in full force. The money paid was his own; but he appeared to O'Neil as the representative of Foster. It is not intended to intimate, in saying this, that

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