Plaintiff-appellant First State Bank of Sinai (Bank) sued defendant-appellee Mervin Hyland (Mervin) seeking to hold him responsible for payment on a promissory note which he cosigned. * * * [T]he circuit court entered * * * judgment holding Mervin not liable for the note’s payment. Bank appeals, advocating that the court erred when it ruled that

1. Mervin was incompetent to transact business when he signed the note;
2. Mervin’s obligation to Bank was void; and
3. Mervin did not subsequently accept/ratify the obligation.

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   On March 10, 1981, Randy Hyland (Randy) and William Buck (Buck), acting for Bank, executed two promissory notes. One note was for $6,800 and the other note was for $3,000. Both notes became due on September 19, 1981.

   The notes remained unpaid on their due date and Bank sent notice to Randy informing him of the delinquencies. On October 20, 1981, Randy came to the Bank and met with Buck. Buck explained to Randy that the notes were past due. Randy requested an extension. Buck agreed, but on the condition that Randy’s father, Mervin, act as cosigner. One $9,800 promissory note dated October 20, 1981 (the two notes of $6,800 and $3,000 were combined) was created. Randy was given the note for the purpose of obtaining his father’s signature. According to Randy, Mervin signed the note on October 20 or 21, 1981.

   Mervin had transacted business with Bank since 1974. Previously, he executed approximately 60 promissory notes with Bank. Mervin was apparently a good customer and paid all of his notes on time. Buck testified that he knew Mervin drank, but that he was unaware of any alcohol-related problems.

   Randy returned to the Bank about one week later. Mervin had properly signed the note. In Buck’s presence, Randy signed the note, which had an April 20, 1982 due date.

   On April 20, 1982, the note was unpaid. Buck notified Randy of the overdue note. On May 5, 1982, Randy appeared at the Bank. He brought a blank check signed by Mervin with which the interest on the note was to be paid. Randy filled in the check amount at the Bank for $899.18 (the amount of interest owing). Randy also requested that the note be extended. Buck agreed, but required Mervin’s signature as a prerequisite to any extension. A two-month note for $9,800 with a due date of July 2, 1982, was prepared and given to Randy.

   Randy did not secure his father’s signature on the two-month note, and Mervin testified that he refused to sign that note. On June 22, 1982, Randy filed for bankruptcy which later resulted in the total discharge of his obligation on the note.

   On July 14, 1982, Buck sent a letter to Randy and Mervin informing them of Bank’s intention to look to Mervin for the note’s payment. On December 19, 1982, Bank filed suit against Mervin, requesting $9,800 principal and interest at the rate of 17 percent until judgment was entered. Mervin answered on January 14, 1983. His defense hinged upon the assertion that he was incapacitated through the use of liquor when he signed the note. He claimed he had no recollection of the note, did not remember seeing it, discussing it with his son, or signing it.

   Randy testified that when he brought the note home to his father, the latter was drunk and in bed. Mervin then rose from his bed, walked into the kitchen, and signed the note. Later, Randy returned to the Bank with the signed note.

   The record reveals that Mervin was drinking heavily from late summer through early winter of 1981. During this period, Mervin’s wife and son accepted responsibilities for managing the farm. Mervin’s family testified that his bouts with liquor left him weak, unconcerned with regard to family and business matters, uncooperative, and uncommunicative. When Mervin was drinking, he spent most of his time at home, in bed. 

   Mervin’s problems with alcohol have five times resulted in his involuntary commitment to hospitals. Two of those commitments occurred near the period of the October 1981 note. On September 10, 1981, Mervin was involuntarily committed to the Human Services Center at Yankton. He was released on September 19, 1981. On November 20, 1981, he was involuntarily committed to River Park at Pierre.

   Between the periods of his commitments, September 19, 1981 until November 20, 1981, Mervin did transact some business himself. * * *

   A trial was held on October 4, 1985. Mervin was found to be entirely without understanding (as a result of alcohol consumption) when he signed the October 20, 1981 promissory note. The court pointed to Mervin’s lack of personal care and nonparticipation in family life and farming business as support for finding the contractual relationship between the parties void at its inception. It was further held that Bank had failed to show Mervin’s subsequent ratification of the contract. Bank appeals.

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   Historically, the void contract concept has been applied to nullify agreements made by mental incompetents who have contracted * * * after a judicial determination of incapacity had been entered. [Citations.] * * *

   Mervin had numerous and prolonged problems stemming from his inability to handle alcohol. However, he was not judicially declared incompetent during the note’s signing.

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   Contractual obligations incurred by intoxicated persons may be voidable. [Citation.] Voidable contracts (contracts other than those entered into following a judicial determination of incapacity) * * * may be rescinded by the previously disabled party. [Citation.] However, disaffirmance must be prompt, upon the recovery of the intoxicated party’s mental abilities, and upon his notice of the agreement, if he had forgotten it. [Citation.] * * *

   A voidable contract may also be ratified by the party who had contracted while disabled. Upon ratification, the contract becomes a fully valid legal obligation. [Citation.] Ratification can either be express or implied by conduct. [Citations.] In addition, failure of a party to disaffirm a contract over a period of time may, by itself, ripen into a ratification, especially if rescission will result in prejudice to the other party. [Citations.]

   Mervin received both verbal notice from Randy and written notice from Bank on or about April 27, 1982, that the note was overdue. On May 5, 1982, Mervin paid the interest owing with a check which Randy delivered to Bank. This by itself could amount to ratification through conduct. If Mervin wished to avoid the contract, he should have then exercised his right of rescission. We find it impossible to believe that Mervin paid almost $900 in interest without, in his own mind, accepting responsibility for the note. His assertion that paying interest on the note relieved his obligation is equally untenable in light of his numerous past experiences with promissory notes.

In addition, Mervin's failure to rescind, coupled with his apparent ratification, could have jeopardized the Bank's chances of ever receiving payment on the note. As we know, Mervin unquestionably was aware of his obligation in late April 1982. If he had disaffirmed then, Bank could have actively pursued Randy and possibly collected some part of the debt. By delaying his rescission, and by paying the note's back interest, Mervin lulled Bank into a false sense of security that may have hurt it when on June 22, 1982, Randy filed for bankruptcy and was later fully discharged of his obligation on the note.

***

   We conclude that Mervin’s obligation to Bank is not void. * * * Mervin’s obligation on the note was voidable and his subsequent failure to disaffirm (lack of rescission) and his payment of interest (ratification) then transformed the voidable contract into one that is fully binding upon him.

   We reverse and remand.