This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
In most of the cases arising under undue influence the influence is exerted by the party who receives the benefit of the transaction. It is not necessary, however, that a personal advantage should be obtained by the person who exercises the undue influence. If the beneficiary either does not part with anything of value under the transaction complained of,1 or has notice of the existence of the undue influence, the transaction may be avoided though the influence exerted was that of a third person not acting for or representing the beneficiary. Thus A deposited money with a corporation as a loan. Subsequently he was induced by undue influence to give an order transferring such money to a fund held by such corporation for religious purposes. It was held that A's executor could recover such fund from the corporation.2 A different rule obtains if adversary to the transaction complained of, parts with value thereunder without notice of the existence of undue influence. Undue influence exerted by a husband to induce his wife to sign a mortgage does not avoid the instrument if the mortgagee did not know of such undue influence and gave value for such security.3
1Boardman v. Lorentzen, 155 Wis. 566, 52 L. R. A. (N.S.) 476, 145 N. W. 750.
2Willis v. Baker, 75 O. S. 291, 79 N. E. 466; Boardman v. Lorentzen, 155 Wis. 566, 52 L. R. A. (N.S.) 476, 145 N. W. 750.
3Spier v. Spier, 99 Neb. 853 [sub nomine, In re Spier, L. R. A. 1916E, 692, 157 N. W. 1014]; Willis v. Baker, 75 O. S. 291, 79 N. E. 466.
4Ginter v. Ginter, 79 Kan. 721, 22 L. R. A. (N.S.) 1024, 101 Pac. 634;
Pritchard v. Hutton, 187 Mich. 346, 153 N. W. 705.
5Curtice v. Dixon, 74 N. H. 386, 68 Atl. 587.
6Steen v. Steen, 169 la. 264, 151 N. W. 115.
7Steen v. Steen, 169 la. 264, 151 N. W. 115.
8 Curtice v. Dixon, 74 N. H. 386, 68 Atl. 587.
9Coe v. McGran, 23 Ida. 582, 131 Pac. 1110.
10Wright's Executor v. Wright (Ky.), 106 S. W. 856.