Story Case

Henry Harper was supporting his uncle, Major Hik-ens, because the uncle was a very old man and was reputed to be worth considerable money. To his disappointment, Harper learned that the old man had only $5,000 and he had willed that to a charitable institution. Thereupon, Harper attempted to secure control over the money during his lifetime. He informed his uncle of a splendid business venture needing $5,000 and urged the Major to let him make the investment. The uncle, however, refused to deliver any money to his nephew.

Harper persisted, and constantly urged upon the Major the fact that much had been done for him. Finally, Harper persuaded his wife not to speak to the uncle, and this hurt the old man severely. When Harper threatened to put him out of his home, he consented and signed a contract to deliver the money on the first of the following month. Harper agreed at the same time to give the uncle one-fourth of the profits that might accrue from the investment.

Major Hikens died before the contract was carried out and his executors refused to deliver, on the ground that the nephew had used undue influence in making the contract. Is this correct?

Ruling Court Case. Perkins Vs. Hall, Volume 3 Wendell Reports (New York), Page 626

At the age of nine years, Perkins, who is the plaintiff in this action, was placed by his father as an apprentice with Rowland Hall, his maternal grandfather, to learn the business of farming. He was to remain with his grandfather until he reached the age of twenty-one. It was agreed by Hall that he would pay Perkins $500, if the latter continued in his employment until he reached that age. He faithfully served his grandfather on the farm, until he reached his majorty. In the meantime, his father had died. And, in the last year, his grandfather died, not having paid him the $500 before his death. An uncle of Perkins was made the personal representative of the deceased grandfather. Instead of settling with Perkins, by paying him the $500, he persuaded Perkins, much against his will, to accept 40 acres of land in payment of the claim. The uncle, at the time, stated that the land was worth about $500; but it afterwards was shown that it was worth only about $6.00 per acre. Thereafter, Perkins brought this action to have the transaction set aside.

He contended that his consent to the transaction was gained by undue influence exercised over him by his uncle. It was shown that Perkins, when he made this settlement was just an ignorant country boy, with little idea of the value of land, and with no one left to rely upon, save his uncle who persuaded him to enter into the transaction.

Decision

Undue influence was exercised over the will of Perkins by his uncle, in procuring his consent to this agreement. When one person, because of his influence by relation of blood or otherwise, persuades a person under his influence to enter into an agreement, such agreement is not binding, unless it can be shown that it was entirely fair and just. The facts of this case show clearly that undue influence was exercised by the uncle. Furthermore, the transaction was very unfair and harsh. Perkins was persuaded to give up a bona fide claim for $500 for an interest in land which was scarcely worth $250. Such an agreement is not binding upon him.

Mr. Chief Justice Savage said: "In this contract, on the one side, a simple, uneducated boy, who knew only how to work on a farm; on the other side, a man who had been justice of the peace, and may therefore be presumed to have some knowledge of law. The inadequacy then consists: 1. In conveying 40 acres of mountain rocks, worth about $240, in satisfaction of a debt of $500 and interest. 2. One of the contracting parties arrived at mature age, perfectly acquainted with the value of property, and from his very 'vocation' in the habit of taking every advantage which the law would permit; the other an ignorant, simple, unsuspecting boy, unacquainted with property and with the arts and intrigues which too often attend advanced age. 3. On the one side the uncle and on the other the nephew".

Accordingly, it was decided that the transaction should be set aside.

Ruling Law. Story Case Answer

"Where one party to a contract has procured the consent of the other by means of undue influence, the consent of the latter is said to be unreal. Consequently, the contract is not binding upon such person and it may be avoided at his election. Duress may arise in several ways. For example, it may arise where one, by virtue of his relation of confidence to another, uses that relation to procure the consent of the other to a contract. This is illustrated by the contracts of a guardian with his ward. Duress may arise where a party takes advantage of another person of weak mind to procure the consent of that person to a contract. This is illustrated by a contract made by a person with one partially insane, or with an imbecile. It may arise where a person takes unfair advantage of the necessities or distress of another person. This is illustrated by the Story Case. There Henry Harper procured the consent of his uncle to the contract in question by threatening to turn him out without food and clothing. The contract was not, therefore, binding upon the uncle, and the executor is not compelled to pay the money over to Henry Harper.