@Gargron You can tell a lot about a horse's health by its teeth. If they're all worn down and broken, it's likely it was stressed and chewing on the metal bit used in harnesses (hence the expression "chomping at the bit"), and was not taken care of well. I'm sure there's like WAY more a horse expert could tell you, but I'm not one. :)

If someone was giving you a free horse it was an expensive gift, no matter how bad a condition it was in, to be appreciated.