This section is from the book "A Treatise On The Law Of Vendor And Purchaser Of Real Estate And Chattels Real", by T. Cyprian Williams. Also available from Amazon: A treatise on the law of vendor and purchaser of real estate and chattels real.
(l) See Matthews v. Baxter, L. R. 8 Ex. 132; Pollock on Contract, 94, 7th ed.
(m) Molton v. Camroux, 2 Ex. 487, 4 Ex. 17; Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599.
(n) See Price v. Berrington, 3 Mac. & G. 486: Elliot v. Ince, 7
De G. M. & G. 475, 487, 488; Sug. Pow. 604, 605, 8th ed.
(o) Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599.
(p) Molton v. Camroux, 2 Ex. 487, 4 Ex. 17; Beavan v. McDonnell 9 Ex. 309.
"Where the purchase, conveyance or contract of a person of unsound mind is voidable, it may be affirmed or avoided by himself if he recover his senses (q), or by his representatives after his death if he die insane, or die sane but without having affirmed the transaction (r). An insane man's voidable contract may also be avoided during his insanity; for if he be sued thereon, as he may be (s), his committee or guardian ad litem may defend the action on his behalf (t), and may plead his insanity, coupled with the plaintiff's knowledge thereof at the time of making the contract; and this plea, if proved, will bar the action (u). And as an insane person may sue, if found lunatic by inquisition, by his committee, and otherwise by his next friend (x), to obtain any remedy which he might assert, if sane, in person (y), active proceedings may be so taken on his behalf during his insanity to set aside any voidable purchase, conveyance or contract taken or made by him (z). In the case of lunatics so found by inquisition the Court in Lunacy has jurisdiction to elect on their behalf to avoid or confirm any voidable purchase, conveyance or contract made by them, and will exercise this jurisdiction as may be best for the lunatic's benefit (a). And the High Court has the like jurisdiction to elect on behalf of insane persons not so found (b).
Who may avoid an insane man's voidable act.
(q) Molton v. Camroux, ubi sup.; Sug. Pow. 605, 8th ed.
(r) Co. Litt, 2b; 2 Black. Comm. 291; Bennet v. Vade, 2 Atk. 324; Frank v. Maimwaring, 2 Beav. 115.
(s) Insane persons are not exempt from being sued; see Owen v. Davies, 1 Ves.sen. 82; Brockwell v. Bullock, 22 Q,. B. D. 567; and as to execution against their property, Re Clarke, 1898, 1 Ch. 336; Re Brown, 1900, 1 Ch. 489; Re Seager Hunt; 1900, 2 Ch. 54, n.
(t) R. S. C. 1883, Order XVI. rule 17.
(n) See Imperial Loan Co. v. Stone, 1892, 1 Q. B. 599.
(x) R, S. C. 1883, Order XVI.
rule 17. The committee should obtain the sanction of the Master in Lunacy before suing; see Re Hinchcliffe, 73 L. T. 522; but the next friend need not do so; see next note.
(y) Didisheim v. London and Westminster Bank, 1900, 2 Ch. 15, 43; New York, etc. Co. v. Keyser, 1901, 1 Ch. 666; see also Pope on Lunacy, 329, 2nd ed.; Coppendale v. Sunderland, Barnes, 42; Jones v. Lloyd, L. R. 18 Eq. 265; Wilder v. Pigott, 22 Ch. D. 263, 268; Porter v. Porter, 37 Ch. D. 420.
(z) Fisher v. Melles, L. R. 18 Eq. 268, n.; Re Gordon, L. R. 10 Ch.192.
It thus appears that, if an insane person contract to sell or buy land, the contract will be voidable or valid, according as the other party had or had not knowledge of the insanity (c). It has not been decided, since this doctrine was established, whether the Court will make an order for the specific performance by an insane person of a valid contract made by him during his insanity. Under the old law, which regarded all lunatics' contracts as void (d), the Court of Chancery would not decree the specific performance by a lunatic of a contract made whilst he was of unsound mind (e); and apparently it would order the rescission of an executory contract made by a lunatic and remaining unperformed (/): but it would not interfere to set aside a contract made by a lunatic with one, who had no knowledge of his insanity, where the contract had been partly performed (g). The Court would, however, order the specific performance by a lunatic of a contract made whilst he was of sound mind (h). It is therefore submitted that, as lunatics' contracts made with persons dealing with them in good faith and without knowledge of their insanity are now recognised as valid at law, whether the contract be executed or executory (i), the Court should now enforce the specific performance by lunatics of such contracts; for under the old law and practice it was the supposed invalidity of the contract (k), and not the defendant's lunacy at the time of the proceedings to enforce it specifically, which prevented the Court from granting this relief. If a lunatic make a valid or voidable contract for the sale or purchase of land, and be so found by inquisition, the transaction may be confirmed and carried out, under the present practice, by order of the Master in Lunacy (l); and if the lunatic were the vendor, the land may be conveyed on completion of the contract by his committee acting under the Master's order on his behalf (m). If the lunatic be not so found by inquisition, but be a person, to whom the powers of management and administration given by the Lunacy Act, 1890 (n), apply, and were the vendor, the contract may be carried out in effect, if an order of the Master in Lunacy can be obtained for sale of the land and for its conveyance by such person as he shall direct (o). But it does not appear that this Act confers any jurisdiction to order the performance of contracts made during their insanity by lunatics not so found; it only authorises orders directing the performance of their contracts made before their lunacy (p). And as regards lunatics not so found, it appears that the Court in Lunacy has no more than the jurisdiction expressly conferred upon it by the Lunacy Act, 1890 (q); although as regards lunatics so found by inquisition this Court is not limited to the powers so given, but may exercise the powers which it derives from the Royal prerogative (r) concerning lunatics and the management of their property (s). If therefore the Court in Lunacy will not make the order for sale, the purchaser will have no remedy but to sue for specific performance of the contract, and for an order that on payment of the purchase money the vendor may be declared a trustee and the land sold vested in himself (t). If the lunatic were the purchaser and be a person, to whom the above-mentioned powers of management are applicable, the contract may, it seems, be completed under an order of the Master in Lunacy, who is authorised to sanction the payment of the lunatic's debts or engagements (x). If such an order cannot be obtained, the vendor will be obliged to assert his rights by action.
 
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