Mutual Life Insurance v. Hunt

This action is brought to foreclose a mortgage executed to the plaintiff by the defendant, Hunt, as security for a loan of four thousand dollars in money. The loan was made ou the 23d day of April, 1870, and the mortgage bears date on that day.

*171On the 21st day of October, 1871, it was found on an inquisition of lunacy that the mortgagor was of unsound mind, and had been so, without lucid intervals, for twelve .years. The defense of lunacy is now interposed to this action, and it is claimed that the mortgage cannot be enforced because the mortgagor was of unsound mind at the time of its execution.

A trial has been had at Special Term, and the court has found that the defendant was of sound mind at. the time of the execution of the mortgage, and has given judgment for the plaintiff. On this appeal we are asked to revise the judgment on the facts, and there is no doubt concerning our power to do ho if it is against the evidence. Conceding, without now deciding, that the finding of the trial court is erroneous, and that the defendant was, in fact, a lunatic at the time she borrowed the money of the plaintiff, and gave back the bond and mortgage to secure its payment; it does not yet follow, by any means, that this judgment must be reversed.

All the transactions of this lady with the agents of the plaintiff, in relation to the loan and the execution of the papers, evinced a clearness of intellect and a directness of purpose entirely in accord with the assumption upon which they acted, that she was in the full possession of all her faculties. Nothing occurred to excite suspicion or place them on their guard. It would be not only a startling proposition, but also in our judgment, an innovation upon well settled principles that loans of money are made and securities taken upon the risk of losing the money if it turns out afterwards that the borrower was then insane, though nothing had then made it manifest, and he himself was unconscious of the fact.

The human mind is wonderfully made, and the partition between sanity and insanity oft-times very thin. Upon inquest, men are sometimes found to have been insane for years, who during all the time have been engaged in all the business complication, of every day life. If all their acts during the period must be reversed aud go for nothing, the upheaval will be very great and much hardship must result. Upon plain view there seems to be no propriety in any such rule, and there is no principle of law or equity calling for its adoption.

Here we have the case of an executed contract with the *172lunatic of which she has taken the benefit, made in good faith, for a full valuable consideration, without fraud or unfairness, without knowledge of the insanity and without notice or information calling for inquiry, and before the insanity was found by the inquisition— every principle of justice requires that it should be sustained. It would be derogatory to the law, if after obtaining the money from the plaintiff and using it for her own benefit, she should now be allowed to defeat the securities which she gave for the repayment. There is no authority which requires us to hold any such doctrine, and there is abundant to the contrary we do not deem it necessary to examine.

The judgment must be affirmed with costs.

Judgment affirmed with costs.