Colonial Trust Co. v. Hoffstot

Citations

• 219 Pa. 497
• 69 A. 52
• 1908 Pa. LEXIS 609

Syllabus

<p>Bailment — Pledgor and pledgee — Borrower and lender — Confidential relation — Fiduciary relation.</p> <p>Where the relation between the parties to a bill in equity is that of borrower and lender, and as to the collateral for the loan, that of pledgor and pledgee, the relation is not a confidential relation, and not in any but a very limited sense, if at all, a fiduciary relation, and in such a case there is no reason why the parties should not deal freely with each other in regard to the property held in pledge.</p> <p>The fact that the lender undertook and did in fact, not only advance money to the borrower, but assisted him in financing his affairs, and in pursuance thereof, through an agent, took part in the management of Ms business, does not change the status of the parties towards each other.</p> <p>Contract — Insanity—Mental depression — Suicide—Equitable duress.</p> <p>Where a man during a period of nervous depression from financial troubles, in which he is brooding over the idea of suicide, makes a contract, and thereafter actually commits suicide, the mere fact of suicide without other evidence, is not sufficient to support a finding that he was non compos mentis at the time he made the contract; and much more is this so where there is a large amount of evidence that he personally attended to many and diversified corporate interests with no hint from any business connection or associate of his incompetency, or even of impaired keenness. Insanity is not a legal deduction from suicide.</p> <p>Where a man during a state of nervous depression resulting from desperate financial straits, but with full mental capacity, secures the loan of a large sum of money, and the lender to protect himself against the great risk involved, requires the borrower to transfer to him all of his assets as collateral for the loan, the lender cannot be charged with equitable duress in the transaction.</p>