CASES

ARGUED AND DETERMINED

IN THE

UNITED STATES CIRCUIT COURTS OF AFPEALS AND THE CIRCUIT AND DISTRICT COURTS.

MOORE et al. v. GILBERT et al.†

(Circuit Court of Appeals, Fifth Circuit. January 4, 1910.)

No. 1,981.

1. CONTRACTS (§ 92*)-CAPACITY TO CONtract.

In determining whether a person had capacity to make a contract, the test is whether he had sufficient capacity to understand the particular contract when he executed it.

[Ed. Note. For other cases, see Contracts, Cent. Dig. §§ 411-414; Dec. Dig. § 92.*]

2. TAXATION (§ 546*)-COLLECTOR'S BOND-CAPACITY TO EXECUTE EVIDENCE. Evidence held to require a finding that decedent had sufficient capacity to execute a sheriff and tax collector's bond when he signed it, though he was subsequently adjudged insane.

[Ed. Note. For other cases, see Taxation, Cent. Dig. § 1028; Dec. Dig. § 546.*]

8. EXECUTION (§ 256*)-SETTING ASIDE SALE-INVALIDITY OF CAUSE OF ACTION -Burden of Proof.

In a suit to set aside a judicial sale of realty in satisfaction of a judgment on a sheriff's bond, executed by decedent, on the ground of decedent's insanity at the time he executed the bond, the burden was on complainants to show decedent's want of capacity and to rebut the presumption of capacity.

[Ed. Note.-For other cases, see Execution, Cent. Dig. § 731; Dec. Dig. § 256.*]

4. EXECUTION (§ 245*)-SETTING ASIDE SALE-INVALIDITY OF CAUSE OF ACTION -WAIVER.

Where, after decedent executed a sheriff's bond as surety, action was brought against him thereon, and it appeared that he was then sufficiently sane to employ counsel and intelligently defend the suit, in which he made no defense of insanity, his heirs could not set aside a judicial sale of his land in satisfaction of a judgment recovered against him on the bond, because of his insanity when he signed the bond.

[Ed. Note. For other cases, see Execution, Cent. Dig. §§ 681, 682; Dec. Dig. § 245.*]

McCormick, Circuit Judge, dissenting.

Appeal from the Circuit Court of the United States for the Northern District of Texas.

•For other cases see same topic & § NUMBER in Dec. & Am. Digs. 1907 to date, & Rep'r Indexes Rehearing denied February 1, 1910.

175 F.-1

Bill by F. B. Gilbert and another against W. W. Moore and others. Decree for complainants, and defendants appeal. Reversed and remanded, with instructions to dismiss.

M. A. Spoonts, Geo. Thompson, J. H. Barwise, Jr., and G. E. Hamilton (A. J. Fires and T. T. Bouldin, on the brief), for appellants. J. W. Stephens and Geo. W. Miller, for appellees.

Before PARDEE, MCCORMICK, and SHELBY, Circuit Judges.

SHELBY, Circuit Judge. This is a bill by F. B. Gilbert and D. J. McDougall against W. W. Moore, T. N. Edmondson and others. The jurisdiction of the Circuit Court is shown by the diverse citizenship of the parties. The complainants (appellees here) are the heirs at law of George W. Buchanan, who, in his lifetime, owned a large tract of land in Motley county, Tex. Buchanan became a surety on the official bond of J. P. Beckham, who, in November, 1892, was elected sheriff and tax collector of that county. Beckham made default, and he, as principal, and Buchanan, as surety, were sued on the bond. Judgment was rendered against them, and execution was issued and levied on Buchanan's land, which was sold, and purchased by the defendants W. E. Gaines and T. N. Edmondson, to whom the land was conveyed by official conveyances. Gaines conveyed the section of land purchased by him at the execution sale to W. A. Carpenter, who later conveyed the same land to W. W. Moore. The bill is filed to vacate the judgment and the conveyances on the ground that Buchanan was insane when he signed Beckham's bond as surety and when judgment was rendered against him. The Circuit Court held that Buchanan was insane as alleged, and granted the relief prayed for. The defendants (appellants here) appealed to this court.

In determining the ability of an alleged insane person to make a particular contract or execute a given act, the inquiry should be: (1) What degree of mental capacity is essential to the proper execution of the act in question? and (2) whether such capacity was possessed at the time by the person alleged to be insane. The act here in question is the signing of Tax Collector Beckham's official bond as his surety. It is evident that it requires less capacity to do a simple act or make a contract involving no complications than it does to make understandingly an agreement involving complications and imposing various obligations. For that reason, a testator of weak mind might be able to make a simple will giving his property to one or more devisces, and he might not be capable of making a complicated will creating trusts, remainders, and settlements. Buchanan signed as surety a bond containing three or four short sentences, payable to the state of Texas, with condition that Beckham shall faithfully perform the duties of the office of collector of taxes. The bond is simple, containing no complicated scheme. It merely imposes on the sureties contingent liability to answer for the default of the principal. The capacity to make contracts or to become surety on a bond is not an ability to be exercised only by the wisest and shrewdest of men. Such capacity or ability may be exercised by those not gifted with great discernment or shrewdness. If a high standard of intellect or information were

required as necessary to legal capacity to make contracts, it would greatly impede the transaction of business and create endless uncertainty and difficulty. One may have but little business capacity, and a weak intellect or impaired faculties, and yet be capable of making a binding contract. No universal rule, of course, can be laid down, applicable to all cases, that would settle the validity or invalidity of a contract. But, so far from requiring a high degree of intelligence to make valid contracts, a contract will often be upheld when the degree of intelligence is very low. All that the law requires to make the contract effectual is that a man should so have possession of his reason as to know the character of the act he is about to perform and be capable of carrying that act into effect. In Mann v. Keene Guaranty Sav. Bank, 86 Fed. 51, 29 C. C. A. 547, Sanborn, Circuit Judge, speaking for the court, said:

"The question is not whether her mental powers were impaired. It is not whether or not she had ordinary capacity to do business. It is whether she had any-the smallest-capacity to understand what she was doing and to decide intelligently whether or not she would do it."

In Johnson v. Harmon, 94 U. S. 371, 379, 24 L. Ed. 271, Mr. Justice Clifford said:

"Imbecility of mind is not of itself sufficient to set aside a contract, when there is not an essential privation of the reasoning faculties, or an incapacity of understanding and acting with discretion in the ordinary affairs of life."

If Buchanan, when he signed Beckham's bond, knew what he was about, knew that he was signing a tax collector's bond as his surety, and knew the effect of his act, and had the capacity to decide whether or not he would become his surety, then he had sufficient capacity to bind himself by his act. Dennett v. Dennett, 44 N. H. 531, 84 Am. Dec. 97; West v. Russell, 48 Mich. 74, 11 N. W. 812; English v. Porter, 109 Ill. 285; Bennett v. Hibbert, 88 Iowa, 154, 55 N. W. 93; Mann v. Betterly, 21 Vt. 326.

The next question is whether Buchanan had the required degree of mental capacity at the time he signed the bond. It is important to have in view certain dates. He signed the bond December 19, 1892. He was sued on the bond, and judgment was entered November 4, 1895. He was adjudged insane, and a guardian was appointed for him December 3, 1901, 9 years, lacking 16 days, after he signed the bond. He was sent to the asylum November 17, 1902, and died there July 12, 1905. In this case we are keenly interested in Buchanan's mental condition when he signed the bond and when judgment was rendered against him on it; but his condition 5, 6, 7, 8, or 9 years after he signed the bond is a matter of no importance, unless it should throw light on his mental condition at the pivotal dates-the dates of the bond and the judgment on it.

Thirty-two witnesses were examined, 20 for the complainants and 12 for the defendants. No physician or alienist was examined. Many of the witnesses were asked substantially:

"What is your opinion as to whether he would understand the nature and effect of signing an official bond or instrument of that sort?"

Of the 20 witnesses offered by the complainants, 3 answered, in effect, that he would not understand it; 5, that he would; 8, that they did not know; and 4 made no answer, or were not asked. Of the 12 witnesses for the defendants, in response to similar questions, 9 gave it as their opinion that he would understand it; 1, that he did. not know; and 2 gave no answer, or were not examined on the point. To summarize: Of the 32 witnesses in the case, 14 gave opinions in favor of his capacity, 3 against it, and 6 gave no answer, or were not examined on the point. Evidence, of course, is not weighed by counting witnesses. And it is well settled that the mere opinion of nonexpert witnesses as to one's mental capacity is not entitled to great weight, but that the court must look to the facts upon which the opinions are based. Turner v. Rusk, 53 Md. 65, 71. The varying opinions of the witnesses which we have stated were based more or less on association with Buchanan and observation of him and of his acts during a period of several years. It would be impracticable and useless to analyze the evidence of each witness, but it is evident that those who express an unfavorable opinion as to his capacity are in a measure influenced by the fact that he was declared insane in 1902. The proven facts tending to show Buchanan's insanity are mostly of occurrences happening long after he signed the bond. We attach no importance to them, because it is conceded that he was insane 9 years after he signed the bond. There are undisputed facts in the record. that lead us to the conclusion that Buchanan had sufficient capacity to attend to his ordinary business and to bind himself by contracts from and including 1892, the date of the bond, to 1895, the date of the judgment against him. During that time he attended to his lands and stock. He leased his lands each year; he sold his horses for fair prices; he made trades, purchased necessary supplies, paid his debts, and became surety on other bonds; and no one at that time ever questioned his capacity to contract.

The burden of proof is on the complainants to show his want of capacity. We begin with the presumption of sanity, and while the evidence abounds with proof of eccentricity of conduct, most of it relates to a period long after the signing of the bond. The incidents. proved as occurring prior to the signing of the bond, or during that year, are not sufficient to even cast doubt on his capacity to contract. Besides, the undisputed evidence of the things done by Buchanan in the conduct of his business is such as to leave no doubt in our minds that he was fully capable of making the contract of suretyship in question at the time it was made. For the years from 1891 to 1901, inclusive, he signed and verified his inventory of property for taxes, stating the acres of land and number of horses owned by him in each year, and placing different values on the horses in different years; on August 21, 1890, he executed a power of attorney to Mrs. Gilbert, one of the complainants, which was duly acknowledged and witnessed; in 1891 and 1892 he signed as surety the official bonds of Walton as county clerk, and he was accepted as surety on other official bonds as late as 1893; in 1892 he made application to purchase a section of school land in Motley county; he voted at the several elections occurring during the years in question, and was one of the officers who