DC Appellate Court Adheres to 100-year-old Precedent in Finding Incompetent’s Lease Void Rather than Voidable

DC Appellate Court Adheres to 100-year-old Precedent in Finding Incompetent’s Lease Void Rather than Voidable

Recently, the DC Court of Appeals adhered to 100-year-old precedent in rejecting the trial court's analysis of a lease executed by an insane or non compos mentis individual. The appellate court reversed the trial court's finding that the lease was voidable and not inherently void. The trial court erred in concluding that the longstanding law of the District of Columbia was no longer applicable because it was contrary to the rule followed in a majority of the states.

In 718 Assocs. v. Banks, 2011 D.C. App. LEXIS 358 (D.C. June 23, 2011) [enhanced version available to lexis.com subscribers / unenhanced version available from lexisONE Free Case Law], the trial court concluded that a lease executed by a mentally incompetent was not void but rather voidable. The trial court characterized the matter as one of first impression in the jurisdiction. Historically, a conveyance or contract by an insane or non compos mentis individual is void and not merely voidable. However, the modern view holds that the transaction is simply voidable. The trial court noted that several federal and state courts were in agreement that a contract deemed voidable as a result of the incapacity of one party was only voidable at the option of the incompetent, committee thereafter appointed or personal representative.

On appeal, the court held that the matter was not one of first impression in the District of Columbia. In 1892, the Supreme Court of the District of Columbia in General Term decided Sullivan v. Flynn, 20 D.C. (9 Mackey) 396, 401 (1892), which was subsequently followed in Martin v. Martin, 270 A.2d 141 (D.C. 1970) [enhanced version]. Sullivan held that "the deed of an insane person is void, and therefore cannot be ratified by acts in pais." While Sullivan did not represent the modern rule in contract law, it was binding upon the court.

The court went on to state:

Our recognition that Sullivan remains the law of this jurisdiction should not be viewed as a complete rejection of the trial court's thorough analysis of contract jurisprudence in its findings and judgment. We agree with the trial court's conclusion that American contract law has largely evolved since the days of Sullivan, and that the modern rule followed by a majority of states is "that such a transaction would be simply voidable." Moreover, as the trial court noted by citing to analogous cases, District of Columbia law adopts the voidable rule in other legal contexts. In its order, the trial court explained that allowing persons found mentally incompetent to "void at their election contracts entered into during periods of infancy or incompetency is grounded in the public's interest in demanding legal protection of those individuals' personal as well as property rights . . . ." (internal quotation marks and citation omitted). It may well be that the majority rule that the contracts of persons found mentally incompetent are not inherently void, but merely voidable at their election, better protects both the personal and property rights of those individuals than the holding in Sullivan does. But the D.C. Supreme Court's decision in Sullivan and our own decision in Martin II constrain us from addressing the merits of that question here.

(citations and footnotes omitted)


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