He was ASLEEP.

"Well, old chap," said Dad, "how ARE y' ?" and proceeded to bridle him.

Ned opened his mouth and received the bit as usual, only some of his tongue came out and stayed out.
"Wot's up w' y' ?" and Dad tried to poke it in with his finger, but it came out further, and some chewed grass dropped into his hand.

Dad started to lead him then, or rather to PULL him, and at the first tug he have the reins Ned woke with a snort and broke away.

And when the other horses saw him looking at Dad with his tail cocked, and his head up, and the bridle-reins hanging, they went for their lives through the trees, and Blossom's foal got staked.
Another day Dad was out on Ned, looking for the red heifer, and came across two men fencing--a tall, powerful-looking man with a beard, and a slim young fellow with a smooth face.