Merchants National Bank v. Coyle

Dibell, J. Action on a promissory note. There was a verdict for the -plaintiff. The defendant appeals from the order denying his motion for a new trial. 1. On December 27, 1916, the defendant borrowed $2,300 of the plaintiff and gave his promissory note due in one year. The defense is that he was insane at the time and that the plaintiff knew his condition or was charged with- notice which would have led to knowledge. He had not been adjudged insane. The court charged the jury that the defendant, to maintain his defense, must prove two things: “First, that he was at that time insane; and second, that the bank knew that or had knowledge of such facts that it should have known.” And it further charged that if the facts recited in the instruction quoted were proved the plaintiff could not recover. The instruction was correct. The insanity of one party to a contract makes it only voidable, and it cannot be avoided where the other party acted in good faith, and was without notice or knowledge of the insan [442] ity, unless restoration can.be made and the parties be placed in statu quo. Schaps v. Lehner, 54 Minn. 208, 55 N. W. 911; Youn v. Lamont, 56 Minn. 216, 57 N. W. 478; Scott v. Hay, 90 Minn. 304, 97 N. W. 106. And the burden of proving notice of insanity is upon the one asserting it. Schaps v. Lehner, supra. The general verdict for the plaintiff includes a finding that it was without knowledge, and it is amply sustained by the evidence. The note being given for money loaned, the only way to put the parties in statu quo was for the defendant to pay the note. The plaintiff should therefore recover. 2. We have proceeded upon the assumption that the note was given for money loaned. The defendant claims that the note was given in payment of stock in the Gagnon Shoe Company purchased of the bank at the time and that he should be relieved of payment upon returning the stock. The court refused to submit the question whether the note was given for the stock. In this it was right. The defendant got 23 shares of the Gagnon stock on the day he borrowed the $2,300'. Just how he got it is not clear. It is clear that he did not buy it of the bank and that the note was not given in purchase of it. A finding that he purchased the stock from the bank would not be permitted to stand. A recital of the evidence upon this point would serve no good purpose. There was no error in the trial. Order affirmed.