may justly interfere.62 But it does not follow that a person is incapable of protecting his interests and acting intelligently in business matters merely because he is far advanced in years; and if such a person makes a bargain which is not so manifestly unfair as to show that he was deceived or imposed upon, equity will not set it aside." This is also the rule where the mind of one of the parties appears to have been somewhat impaired by sickness, but no very great inadequacy of consideration is shown. And if the grantor in a conveyance was a person of sound mind and at least average ability, and was not constrained by duress or undue influence, nor tricked by fraud, inadequacy of the consideration alone is not sufficient ground for relief in equity.65

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§ 174. Catching Bargains and Sales of Expectancies and Remainders.-A catching bargain is a bargain by which money is loaned, at an extortionate or extravagant rate, to an heir or to any one who has an estate in reversion or expectancy, to be repaid upon the vesting of his interest, or a similar unconscionable bargain with such person for the purchase outright of his expectancy. It is "such a contract as, on the one hand, no man in his right senses and not under a delusion would make, and, on the other hand, no fair and honest man would accept." 99 66 And according to the English decisions, this is the one instance where inadequacy of consideration alone may warrant the rescission of a contract or justify a court of equity in setting it aside. No actual fraud need be proved in such a case, nor duress or undue influence. Fraud is always presumed or inferred as a matter of law from the unconscionable nature of the bargain, the extravagant rate of interest or return to the lender or buyer, the financial straits or necessity of the borrower or seller, or the ruinous circumstances which drive him to

62 McCormick v. Malin, 5 Blackf. (Ind.) 509.

63 Green v. Thompson, 37 N. C. 365.

64 Sprague v. Duel, 11 Paige (N. Y.) 480.

65 Wilson v. Wilson, 160 Mich. 555, 125 N. W. 385; Marking v. Marking, 106 Wis. 292, 82 N. W. 133.

66 Earl of Chesterfield v. Janssen, 2 Ves. 125, 155; King v. Cohorn, 6 Yerg. (Tenn.) 75, 27 Am. Dec. 455.

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such extremities, or, generally, from any and all facts which emphasize the inequality of the parties and force the mind to the conclusion that such a bargain could not have been effected save by deceit, gross imposition, or extortion. Hence the burden of proof is on the purchaser or lender to show clearly that the transaction was fair and just and founded upon a consideration at least not strikingly inadequate. "Fraud does not here mean deceit or circumvention; it means an unconscientious use of the power arising out of the circumstances and conditions of the parties." 6'8 In one of the cases on this subject it was said: "The last head of fraud on which there has been relief is that which infects catching bargains with heirs, reversioners, or expectants, in the life of the father, etc., against which relief is always extended. These have been generally mixed cases, compounded of all or several species of fraud, there being sometimes proof of actual fraud, which is always decisive. There is always fraud presumed or inferred from the circumstances or conditions of the parties contracting, -weakness on one side, usury on the other, or extortion or advantage taken of that weakness. There has always been an appearance of fraud from the nature of the bargain. In most of these cases have occurred deceit and illusion on other persons not privy to the fraudulent agreement. The father, ancestor, or relation, from whom was the expectation of the estate, has been kept in the dark; the heir or expectant has been kept from disclosing his circumstances and resorting to them for advice, which might have tended to his relief and also reformation. This misleads the ancestor, who has been seduced to leave his estate, not to his heir or family, but to a set of artful persons who have divided the spoil beforehand." But it is to be observed that relief is afforded in equity to victims of catching bargains not on the ground of their youth and inexperience, but on account of the other circumstances in such cases

67 Shelly v. Nash, 3 Madd. 232; Peacock v. Evans, 16 Ves. 512; Foster v. Roberts, 29 Beav. 467; Bowes v. Heaps, 3 Ves. & B. 117; Earl of Aylesford v. Morris, L. R. 8 Ch. App. 484.

68 Earl of Aylesford v. Morris, L. R. 8 Ch. App. 484, 490.

69 Earl of Chesterfield v. Janssen, 2 Ves. 125, 156.

which raise the vehement presumption of fraud. Hence it is no defense to a proceeding to set aside such a transaction that the vendor or borrower was a person of mature years and perfectly capable of understanding the entire transaction and weighing its probable consequences. And although the presumption of fraud is heightened by the fact that the negotiations and the contract are kept a secret from the family, friends, or advisers of the victim, who might be supposed to have extricated him from his financial difficulties or at least to have protected him from imposition, if they had known of it, yet, on the other hand, the fact that they were fully apprised of the whole transaction is not of itself sufficient to prevent the granting of relief in equity."1 But if the lender or purchaser shows that the transaction was fair and reasonable, and the consideration adequate, a court of equity will not set it aside unless actual fraud is shown.72 And there is no presumption of fraud in these cases where the sale of the reversion or expectancy was made at auction, for the presumption is then that it brought a fair and adequate price.73

Some of the earlier American cases adopted this rule of the English courts in its fullest extent. Thus, in a case in New York, it was said: "Dealing with younger heirs and for reversionary interests is also watched with the utmost jealousy, and constitutes a particular class of cases forming another exception to the general rule that, for mere inadequacy of price, a contract is not to be set aside." " But these views have not been generally adopted. According to the preponderance of authority in the United States, a bargain with an heir or expectant must be shown to be fraudulent, or to have been extorted by duress, imposition, or un

70 Davis v. Duke of Marlborough, 2 Swanst. 108; Bromley v. Smith, 26 Beav. 644; Tynte v. Hodge, 2 Hem. & Mil. 287; Earl of Portmore v. Taylor, 4 Sim. 182.

71 See Talbot v. Staniford, 1 Johns. & Hem. 484; Earl of Aylesford v. Morris, L. R. 8 Ch. App. 491.

72 Wharton v. May, 5 Ves. 27; Bacon v. Bonham, 33 N. J. Eq. 614; Fitch v. Fitch, 8 Pick. (Mass.) 480; Fitzgerald v. Vestal, 4 Sneed (Tenn.) 258.

78 Shelly v. Nash, 3 Madd. 232.

74 Osgood v. Franklin, 2 Johns. Ch. (N. Y.) 1, 25, 7 Am. Dec. 513.

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due influence, or something more must be shown than the mere inadequacy of consideration, before equity will be moved to set it aside." But relief has been given in cases where, besides the inadequacy of price, it was shown that the grantor was young and inexperienced, of weak mind and easily influenced, and was also defrauded in the particular bargain, or that he was in needy circumstances and ignorant of the value of his property, and was advised and urged by the grantee, who possessed superior knowledge,77 or that an unconscientious advantage was taken of the improvidence and distress of the seller,78 or that he was a young and dissolute spendthrift and was grossly cheated.79 In a case in New York, an action was brought to set aside, on the ground of fraud, a deed from plaintiff to defendant conveying a remainder limited after a life estate. It appeared that the plaintiff had just passed his twenty-first year, and that the price paid was not more than one-third the value of the remainder and probably less, but there was no other evidence of fraud than the inadequacy of the consideration. It was held that, while the plaintiff was entitled to relief, yet, as the proof of actual fraud was not clear, the deed would be allowed to stand as security for the sum actually advanced by the defendant.80

§ 175. Gross Inadequacy Raising Presumption of Fraud. Equity may decree the rescission or cancellation of a contract or conveyance where such a gross inadequacy of consideration is shown as to shock the conscience, because in this case the disparity between the value of the subject and the consideration given for it is regarded as raising an irrefragable presumption of fraud, or (according to most of the authorities) as constituting in itself conclusive evidence

75 McAdams v. Bailey, 169 Ind. 518, 82 N. E. 1057, 13 L. R. A. (N. S.) 1003, 124 Am. St. Rep. 240; Cribbins v. Markwood, 13 Grat. (Va.) 495, 67 Am. Dec. 775; Varick v. Edwards, 1 Hoff. Ch. (N. Y.) 382; Mastin v. Marlow, 65 N. C. 695.

76 Jones v. Galbraith (Tenn. Ch. App.) 59 S. W. 350.

77 Beard v. Campbell, 2 A. K. Marsh. (Ky.) 125, 12 Am. Dec. 362. 78 McKinney v. Pinckard's Ex'r, 2 Leigh (Va.) 149, 21 Am. Dec. 601.

79 Butler v. Duncan, 47 Mich. 94, 10 N. W. 123, 41 Am. Rep. 711. 80 Friedman v. Hirsch, 63 Hun, 630, 18 N. Y. Supp. 85, 87.

which raise the vehement presumption of fraud. Hence it is no defense to a proceeding to set aside such a transaction that the vendor or borrower was a person of mature years and perfectly capable of understanding the entire transaction and weighing its probable consequences.70 And although the presumption of fraud is heightened by the fact that the negotiations and the contract are kept a secret from the family, friends, or advisers of the victim, who might be supposed to have extricated him from his financial difficulties or at least to have protected him from imposition, if they had known of it, yet, on the other hand, the fact that they were fully apprised of the whole transaction is not of itself sufficient to prevent the granting of relief in equity."1 But if the lender or purchaser shows that the transaction was fair and reasonable, and the consideration adequate, a court of equity will not set it aside unless actual fraud is shown.72 And there is no presumption of fraud in these cases where the sale of the reversion or expectancy was made at auction, for the presumption is then that it brought a fair and adequate price.73

Some of the earlier American cases adopted this rule of the English courts in its fullest extent. Thus, in a case in New York, it was said: "Dealing with younger heirs and for reversionary interests is also watched with the utmost jealousy, and constitutes a particular class of cases forming another exception to the general rule that, for mere inadequacy of price, a contract is not to be set aside." 74 But these views have not been generally adopted. According to the preponderance of authority in the United States, a bargain with an heir or expectant must be shown to be fraudulent, or to have been extorted by duress, imposition, or un

70 Davis v. Duke of Marlborough, 2 Swanst. 108; Bromley v. Smith, 26 Beav. 644; Tynte v. Hodge, 2 Hem. & Mil. 287; Earl of Portmore v. Taylor, 4 Sim. 182.

71 See Talbot v. Staniford, 1 Johns. & Hem. 484; Earl of Aylesford v. Morris, L. R. 8 Ch. App. 491.

72 Wharton v. May, 5 Ves. 27; Bacon v. Bonham, 33 N. J. Eq. 614; Fitch v. Fitch, 8 Pick. (Mass.) 480; Fitzgerald v. Vestal, 4 Sneed (Tenn.) 258.

78 Shelly v. Nash, 3 Madd. 232.

74 Osgood v. Franklin, 2 Johns. Ch. (N. Y.) 1, 25, 7 Am. Dec. 513.