Sec 111

As has been already incidentally noticed, a party who seeks to rescind a contract made by him when insane, is ordinarily bound, as a preliminary, to restore to the other party, when practicable, the price he received as consideration.1 In those courts, however, which hold that the deed of a lunatic is ipso facto void, an offer of restitution of the purchase money of land is not a condition precedent to the recovery of the land by the guardian of the lunatic.2 But the better rule is, as stated by Mr. Pollock,3 that "when a contract has been entered into in good faith with a person who appears and is believed to be of sound mind, but who is, in fact, of unsound mind, and the contract has been performed, so that the parties cannot be replaced in their original position, it cannot be set aside by the person of unsound mind, or his representatives." And he cites to this effect the following passage from the judgment of the exchequer chamber in a leading case, in which the law was in this respect definitely settled: "The modern cases show that when that state of mind (lunacy or drunkenness, even if such as to prevent a man from knowing what he is about) was unknown to the other contracting party, and no advantage was taken of the lunatic (or drunken man), the defence cannot prevail, especially where the contract is not merely executory, but executed, in the whole or in part, and the parties cannot be restored altogether to their original positions."4

On rescission parties to be placed in statu quo.

1 Supra, sec 100 et seq. Infra, sec 285. Scanlan v. Cobb, 85 111. 296.

2 Supra, sec 107 ; Hovey v. Hobson, 53 Me. 451; Gibson v. Soper, 6 Gray, 279 ; see Eaton v. Eaton, 37 N. J. L. 118; Nichol v. Thomas, 53 Md. 42 ; Lagay v. Marston, 32 La. Ann. 170.

3 Pollock, Wald's ed. 81.

4 Molton v. Camroux, 4 Exch. 17; aff. Beavan v. McDonnell, 9 Exch. 309 ; Price v. Bennington, 3 Mac. & G. 486 (reversing S. C. 7 Hare, 394) ; Elliott v. Ince, 7 D. M. G. 475. Mr. Pollock adds: "The complete judicial interpretation of the result of Molton v. Camroux was not given until the recent case of Matthews v. Baxter. L. R 8 Exch. 132. The declaration was for breach of contract in not completing a purchase; plea, that at the time of making the alleged contract the defendant was so drunk as to be incapable of transacting business or knowing what he was about, as the plajntiff well knew ; replication, that after the defendant became sober and able to transact business, he ratified and confirmed the contract. As a merely void agreement cannot be ratified, this nealty raised the question whether the contract was void or only voidable; the court held unanimously (one mem-.

Sec 112

In accordance with the modern doctrine above stated, the insanity of a partner does not by itself dissolve a partnership, though it may be ground for a judicial decree of dissolution. The same remark applies to drunkenness. Were it otherwise, the question whether partnerships including numerous partners are in continued existence would often be one of doubt.1 It has, indeed, been held that an inquest of lunacy against a partner dissolves ipso facto the partnership.2 But this can only be as to persons parties to or at the most having notice of the inquest. As to others it is res inter alios acta.3