with others, and had an opportunity to withdraw after consulting counsel.22 Thus, where a party to a deed has mental capacity to make it, and there is no fraud or undue influence moving him to the act, the deed cannot be impeached because the sale was imprudent, unreasonable, or unequal.28 And the same principle applies to the revocation of a trust or settlement of property. When a deed of this kind is voluntarily made, and not under coercion or the exercise of an undue influence, it will not be set aside on the sole ground of its having been improvident or unwise, unless it is shown that it was the act of a person whose mental powers were so enfeebled that he did not understand the effect of the instrument, or unless some other recognized ground for equitable interference appears in the case.24 § 171. Taking Unconscionable Advantage of Circumstances.-Extortion is repugnant to equity, and when it appears that an oppressive bargain, or one founded on a greatly inadequate consideration, has been obtained from a party by taking an unconscientious advantage of circumstances which made it peculiarly difficult for him adequately to safeguard his own interests, equity will be moved to give him relief by way of rescission or cancellation of his deed.25 It has been said: "Where the inadequacy of price is so great that the mind revolts at it, the court will lay hold on the slightest circumstances of oppression or advantage to rescind the contract. So when a person borrowing money to relieve his necessities is induced to purchase property at an exorbitant price, and to an amount greatly beyond the 22 Thurman v. Ellinor, 82 Ark. 603, 101 S. W. 1154; Bowers v. Raitt, 94 Neb. 567, 143 N. W. 802. 23 Farnsworth v. Noffsinger, 46 W. Va. 410, 33 S. E. 246; Cox v. Combs, 51 Tex. Civ. App. 346, 111 S. W. 1069; Coblentz v. Putifer, 87 Kan. 719, 125 Pac. 30, 42 L. R. A. (N. S.) 298. 24 Fretz v. Roth, 70 N. J. Eq. 764, 64 Atl. 152; Fidelity Title & Trust Co. v. Weitzel, 152 Pa. 498, 25 Atl. 569; McElroy v. Masterson, 156 Fed. 36, 84 C. C. A. 202. 25 Hepburn v. Dunlop, 1 Wheat. 179, 4 L. Ed. 65; Bridgewater v. Byassee, 29 Ky. Law Rep. 377, 93 S. W. 35; Hannibal & St. J. R. Co. v. Brown, 43 Mo. 294; McKinney v. Pinckard's Ex'r, 2 Leigh (Va.) 149, 21 Am. Dec. 601; Stone v. Moody, 41 Wash. 680, 84 Pac. 617, 85 Pac. 346, 5 L. R. A. (N. S.) 799. Compare Schields v. Hickey, 26 Mo. App. 194; Korne v. Korne, 30 W. Va. 1, 3 S. E. 17. loan obtained, and secure the payment by mortgage on his other lands, the necessity of the purchaser, connected with the exorbitancy of price, is sufficient evidence of unfair advantage to justify the interference of the court." 20 Whatever may be the circumstances which brought it about, when the losing party was placed in a peculiarly unfortunate or helpless position, so that a man of rectitude and good conscience would have refrained from seizing the advantage which that condition gave him, it will be a suitable occasion for a court of equity to give relief.27 Pecuniary embarrassment places any man at a disadvantage, and when the stress of his financial needs is so great as to put him practically at the mercy of any one with whom he bargains, equity will not sustain a transaction which is grossly oppressive as to him, and which shows an unconscientious advantage taken of his helpless situation.28 And this is peculiarly true where the injured party was also under strong influence exerted by the other, or was naturally improvident or reckless, inexperienced, or dissipated.29 At the same time, the law does not encourage folly nor discountenance business acumen. The inadequacy of consideration in a case of this kind must be gross, in order to move a court to interfere. A sale of property for less than its apparent value will not be set aside because made reluctantly and when the seller was greatly in want of money, if there was nothing unusual or oppressive in the sale, and there was no fraudulent advantage taken or imposition.30 But financial embarrassment is not the only circumstance which may place one in a position where he needs the protection of a court of equity against unscrupulous persons dealing with him. Thus, in a case in Kentucky, a contract made with a widow, immediately after the death of her husband, by which, for a small consideration, she relin 26 Hough's Adm'rs v. Hunt, 2 Ohio, 495, 15 Am. Dec. 569; Musselman v. Knott, 7 Ky. Law Rep. 380. 27 Esham v. Lamar, 10 B. Mon. (Ky.) 43. 28 Hardy v. Dyas, 203 Ill. 211, 67 N. E. 852; Marshall v. Billingsly, 7 Ind. 250; Bradley v. Bradley, 28 Ky. Law Rep. 1261, 91 S. W. 1143. But see Greeno v. Ellas, 1 Tenn. Ch. App. 165. 29 Marshall v. Billingsly, 7 Ind. 250. 80 Sammis v. Matthews, 19 Fla. 811. BLACK RESC.-29 with others, and had an opportunity to withdraw after consulting counsel.22 Thus, where a party to a deed has mental capacity to make it, and there is no fraud or undue influence moving him to the act, the deed cannot be impeached because the sale was imprudent, unreasonable, or unequal.28 And the same principle applies to the revocation of a trust or settlement of property. When a deed of this kind is voluntarily made, and not under coercion or the exercise of an undue influence, it will not be set aside on the sole ground of its having been improvident or unwise, unless it is shown that it was the act of a person whose mental powers were so enfeebled that he did not understand the effect of the instrument, or unless some other recognized ground for equitable interference appears in the case.24 § 171. Taking Unconscionable Advantage of Circumstances.-Extortion is repugnant to equity, and when it appears that an oppressive bargain, or one founded on a greatly inadequate consideration, has been obtained from a party by taking an unconscientious advantage of circumstances which made it peculiarly difficult for him adequately to safeguard his own interests, equity will be moved to give him relief by way of rescission or cancellation of his deed.25 It has been said: "Where the inadequacy of price is so great that the mind revolts at it, the court will lay hold on the slightest circumstances of oppression or advantage to rescind the contract. So when a person borrowing money to relieve his necessities is induced to purchase property at an exorbitant price, and to an amount greatly beyond the 22 Thurman v. Ellinor, 82 Ark. 603, 101 S. W. 1154; Bowers v. Raitt, 94 Neb. 567, 143 N. W. 802. 23 Farnsworth v. Noffsinger, 46 W. Va. 410, 33 S. E. 246; Cox v. Combs, 51 Tex. Civ. App. 346, 111 S. W. 1069; Coblentz v. Putifer, 87 Kan. 719, 125 Pac. 30, 42 L. R. A. (N. S.) 298. 24 Fretz v. Roth, 70 N. J. Eq. 764, 64 Atl. 152; Fidelity Title & Trust Co. v. Weitzel, 152 Pa. 498, 25 Atl. 569; McElroy v. Masterson, 156 Fed. 36, 84 C. C. A. 202. 25 Hepburn v. Dunlop, 1 Wheat. 179, 4 L. Ed. 65; Bridgewater v. Byassee, 29 Ky. Law Rep. 377, 93 S. W. 35; Hannibal & St. J. R. Co. v. Brown, 43 Mo. 294; McKinney v. Pinckard's Ex'r, 2 Leigh (Va.) 149, 21 Am. Dec. 601; Stone v. Moody, 41 Wash. GSO, 84 Pac. 617, 85 Pac. 346, 5 L. R. A. (N. S.) 799. Compare Schields v. Hickey, 26 Mo. App. 194; Korne v. Korne, 30 W. Va. 1, 3 S. E. 17. loan obtained, and secure the payment by mortgage on his other lands, the necessity of the purchaser, connected with the exorbitancy of price, is sufficient evidence of unfair advantage to justify the interference of the court." 20 Whatever may be the circumstances which brought it about, when the losing party was placed in a peculiarly unfortunate or helpless position, so that a man of rectitude and good conscience would have refrained from seizing the advantage which that condition gave him, it will be a suitable occasion for a court of equity to give relief.27 Pecuniary embarrassment places any man at a disadvantage, and when the stress of his financial needs is so great as to put him practically at the mercy of any one with whom he bargains, equity will not sustain a transaction which is grossly oppressive as to him, and which shows an unconscientious advantage taken of his helpless situation.28 And this is peculiarly true where the injured party was also under strong influence exerted by the other, or was naturally improvident or reckless, inexperienced, or dissipated.29 At the same time, the law does not encourage folly nor discountenance business acumen. The inadequacy of consideration in a case of this kind must be gross, in order to move a court to interfere. A sale of property for less than its apparent value will not be set aside because made reluctantly and when the seller was greatly in want of money, if there was nothing unusual or oppressive in the sale, and there was no fraudulent advantage taken or imposition.30 But financial embarrassment is not the only circumstance which may place one in a position where he needs the protection of a court of equity against unscrupulous persons dealing with him. Thus, in a case in Kentucky, a contract made with a widow, immediately after the death of her husband, by which, for a small consideration, she relin 26 Hough's Adm'rs v. Hunt, 2 Ohio, 495, 15 Am. Dec. 569; Musselman v. Knott, 7 Ky. Law Rep. 380. 27 Esham v. Lamar, 10 B. Mon. (Ky.) 43. 28 Hardy v. Dyas, 203 Ill. 211, 67 N. E. 852; Marshall v. Billingsly, 7 Ind. 250; Bradley v. Bradley, 28 Ky. Law Rep. 1261, 91 S. W. 1143. But see Greeno v. Ellas, 1 Tenn. Ch. App. 165. 29 Marshall v. Billingsly, 7 Ind. 250. 80 Sammis v. Matthews, 19 Fla. 811. BLACK RESC.-29 quished a large amount of property devised to her by her husband, was held to be inequitable and was canceled.31 And generally, it is a case for equitable relief where the relative situation of the parties is so unequal as to give to one of them the opportunity of making his own terms.82 When a person of weak understanding makes an unconscionable bargain with one of strong mind, the natural inference is that it has been obtained by the power of the strong over the weak, and it may therefore be set aside.33 Cases not infrequently arise in which the grantor of property is a young man without experience in business affairs, and with a naturally unsound judgment, perhaps a spendthrift, perhaps dissipated and with mental powers enfeebled by his habits of intoxication, while the other party to the contract is an experienced business man, sagacious and shrewd, and well aware of the circumstances which give him the advantage in any transaction between them. If, in such a situation as this, a transfer of property is effected for a greatly inadequate consideration, equity will not hesitate to set it aside.34 On a similar principle, if, in a contract of sale, the seller names a consideration that is out of all proportion to the value of the subject-matter, and the purchaser, realizing that a mistake must have been committed, takes advantage of it, and refuses to let the mistake be corrected when it is discovered, he cannot properly claim that there is an enforceable contract.35 These rules apply to the lending of money at unconscionable rates of interest. Without regard to the statutes against usury, a court of equity will refuse to enforce a contract calling for the payment of interest at an exorbitant rate, especially if there are any circumstances of oppression on the one side and weakness on the other, or any undue influence exerted, such a transaction being so contrary to 81 Stewart v. Stewart, 7 J. J. Marsh. (Ky.) 183, 23 Am. Dec. 396. 32 Potter v. Everitt, 42 N. C. 152. 33 Boarman's Committee v. Gardner, 7 Ky. Law Rep. 521; Stringfellow v. Hanson, 25 Utah, 480, 71 Pac. 1052. 34 Ridgeway v. Herbert, 150 Mo. 606, 51 S. W. 1040, 73 Am. St. Rep. 464; McCormick v. Malin, 5 Blackf. (Ind.) 509. 35 Cunningham Mfg. Co. v. Rotograph Co., 30 App. D. C. 524, 15 L. R. A. (N. S.) 368, 13 Ann. Cas. 1147. |