*561The opinion of the court was delivered by

Yeazey, J.

The defendant excepted to the report of the master -first because he admitted oral evidence of an agreement bv the defendants to give the oratrix, Eoxana Chiokering, a mortgage or deed of the Harris farm as security for the $200 and the Moren cy notes and mortgage which the defendants had the 'benefit of in the purchase and payment of the Harris farm.

In the decree of the Chancellor this exception was sustained, and we think correctly. Oratrix’s counsel claim that the evidence could not properly be excluded because the issue between' the parties was whether by their arrangement in respect to this money and notes, it was a gift, loan or trust, and that the objection to the evidence was general and therefore not sufficient to raise the question of the Statute of Frauds which is now relied upon in defence.

There would be force in this position if it were not for the fact that the master understood and treated the objection to the parol evidence as being put on the ground now claimed, viz. : to establish a contract by parol that under the Statute of Frauds can only be established by the contract itself in writing. The master negatives the fact of a gift by the oratrix and finds by this evidence an agreement by the defendants to give a mortgage or deed as security, the master treating and substantially finding the transaction as' to the money and notes was a loan to the defendants.

The real point now is, not whether this evidence was admissible on some- other issue, but whether it was admissible under the defense of the Statute of Frauds. On this point the oratrix’s counsel claim the statute is not available to the defendants because they did not make that defense in their answer, and cite Howe v. Chesley, 56 Vt. 727, and Battel v. Matot, 58 Vt. 271.

In the latter case, Eowell, J., after a long discussion says : “ We think the true legal effect of the omission to set up the statute is as stated by Mr. Pomeroy, and by Lord Eldon in Cooth *562v. Jackson, 6 Ves. 12, where he.says: ' If the’defendant admits the agreement * * * but does not say.anything about the statute he must be taken to renounce the benefit of it,’ ”

It does not appear in this record that the defendants admitted the agreement. Indeed it would seem they must have denied it as they made the issue of a gift, which was inconsistent with such admission. No copy of the pleadings was furnished. In the absence of anything to show an admission of the contract upon which the oratrix relied, we think it was seasonable for the defendants to make the defense of the statute when oral evidence was offered to show a mere parol agreement to deed, and this by objection to the evidence on this ground. See authorities cited in Battel v. Matot, supra.

The second, third and fourth exceptions to the report are based on alleged error in the admission of evidence as to the oratrix’s mental capacity when she signed the release of December 6, 1886. These exceptions were overruled by the Chancellor and we think correctly. Non-expert witnesses on both sides were allowed to state the opportunities they had for judging as to her mental capacity, and. to this end, to detail their conversations with her over a period of about three years, touching the suit she had brought against the defendant William Brooks, and other matters, and then to state their opinions as to her mental capacity. The testimony was admitted only o.n the question of mental capacity. This is in accordance with the settled practice in this State where meiital capacity is in issue. ■ Her conversations with these witnesses were not admissible for the purpose of establishing that a fact was as she stated it to be, that is,, for establishing any fact embodied in the declaration and we do not understand ■they were allowed to have that effect by the master. Neither were they conversations at a time when she was conceded to be in full possession of her mental faculties, as in Crocker v. Chase, 57 Vt. 413. Defendants’ counsel urged with more emphasis that the questions calling for the opinion of the witnesses in several instances as to the oratrix’s capacity to transact business intelligently and understandingly, were improperly admitted. *563This point was before the court in Fairchild v. Bascomb, 35 Vt. 398; but the court only pronounced the question objectionable without saying it was error, on the ground that what is sufficient capacity to transact business is a matter of law depending •somewhat on the -nature of the business, and the witness may not •correctly apprehend the rule of law. The court there said the -question should be framed so as to require the witness to state the measure of the person’s capacity in his own language, and •by such ordinary terms or forms of expression as will best con-vey his own ideas of the matter; or, to use Judge Ruffin’s expression in Crowell v. Kirk, 3 Des. 358, to state the degree of intelligence or imbecility “ in -the best way he can.”

We think this indicates the proper form of inquiry; but we •hesitate to hold that the form allowed in this case constitutes •reversible error in a case tried by an experienced lawyer as this was, and therefore not liable to be misled by form of question, and 'especially in view of his finding as to the oratrix’s •capacity generally which was in substance mainly contrary to the opinions as expressed by the witnesses.

The master says that certain witnesses would state their -acquaintance with Roxana and conversations with her as to the •matter in issue and other matters, and then give their opinion of the mental capacity, when, in the opinion of the master, the conversations themselves did not indicate any mental incapacity; and the defendants excepted to this testimony. Defendants’ counsel now elaim that it was error to admit opinions under such circumstances.

We do not think the admissibility of the opinion depends upon the question whether the trier of the case thinks the declarations of the person do or do not indicate mental incapacity. 'Opinion as to capacity depends not only on conversations which the witness has had with the person who is the subject of inquiry, but on his opportunities of observation by acquaintance and contact. An opinion is not admitted until the basis of the opinion is shown. The words alone of the person as- related by the witness to the trier might not indicate to the latter any incapacity, *564when, if he had been in the place of the witness and seen the-person from time to time, when the conversations took place,, and .observed .his manner,, bearing and look as the witness saw it, he might have come to the same conclusion as the witness.. One may be fully impressed with the fact of another’s insanity when the words alone of the latter, simply detailed to a third person, might indicate sanity.

If the opinion of a witness improved to testify to mental incapacity is founded .upon nothing but conversation, and that fails-to indicate unsoundness of mind, then there would be propriety in rejecting the opinion. But this would rarely happen. Conduct,, appearance, as observed in conversations and otherwise, how long has the witness known.-the person, how intimately, under-what circumstances, in- what connections, what observations-wore made of his conduct and appearance, what conversations were had with him ; this indicates the usual line of inquiry. The counsel urging this point of exception fail to note, possibly overlooked, the distinction between conversations offered with other matter as the basis of opinion, and declarations of a testator-which have no tendency to. prove contemporaneous incapacity, and offered, not as the basis of the opinion of the witness, but under a claim' that they, of themselves, tended to show incapacity, which was the case of Crocker v. Chase, supra.

The testimony of Mr. Ide as to his talk with defendant Brooks was admissible for the purpose of showing that the latter had said that he did. not claim the money and notes in question as a gift to him, he having made the issue in this case that it was a gift. This evidence was not obnoxious to the-rule that excludes propositions in the nature of overtures of pacification and settlement. Greenl. Ev. s. 192.

There being no error in the rulings of the master on the evidence, his finding on the question of mental capacity is conclusive to the effect that she had not sufficient capacity to understand the effect of the instrument of release which she signed,, either alone or by any-assistance which she had. King v. Davis, 60 Vt. 502. His other statement that if the paper had been. *565'plainly explained to her and she had been told fully what its •effect would be upon her rights, she would have understood the instrument and explanation together, and comprehended what she was doing, is not sufficient to nullify’the master’s conclusion, -as first stated. If masters would find and report one way or the other squarely on the question of mental capacity they would •show more capacity themselves, and save great mental strain mpon lawyers and judges in trying to determine what they have found.

These results preclude a holding that the transaction as to the money and notes created a trust chargeable upon the Harris farm, or a decree of specific performance of the agreement. But 'it' was a case for equity jurisdiction notwithstanding for the purpose of setting aside the discharge under seal.

The decree below, covering the whole case, was therefore ■iwarranted and is affirmed and cause remanded.