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.
Expectant heirs, remainder-men and reversioners were looked upon by the English courts of equity as being in a state of chronic distress.1 The actual existence of financial embarrassment was not necessary to induce the courts to apply to contracts of persons of this class concerning their interests in expectancy the same rules that apply to persons in circumstances of distress.2 A contract of this sort is known as a "catching bargain."3 In speaking of expectant heirs, it has been said: "To that class of persons this court (i. e., chancery) seems to have extended a degree of protection approaching nearly to an incapacity to bind themselves by contract."4 Upon the effect of such contracts made upon inadequate consideration there is a conflict of authority. The English rule,5 which is followed in some American states,6 is that inadequacy of consideration in such contracts amounts per se to undue influence or constructive fraud. The rule adopted by other American states is that inadequacy of consideration is a circumstance tending to show undue influence or constructive fraud, but not of itself conclusive,1 unless it is so inadequate as to shock the conscience and to be conclusive of fraud.8 The wealth of the remainder-man has been considered in determining whether the contract was fair or not.9 These principles apply to all sales of expectant interests,10 including alike the interests of expectant heirs,11 of expectant devisees and legatees,12 and of remainder-men and reversioners,13 but not of legatees whose legacy is deferred.14 These principles apply to contracts for the sale15 or mortgage16 of the expectant interest; and to contracts for the payment of money on the death of the person on whose death the expectancy will vest in possession, or it is hoped will so vest.17
3 Mays v. Prewett, 98 Tenn. 474, 40 S. W. 483.
4Maloy v. Berkin, 11 Mont. 138, 27 Pac. 442.
5Stephens v. Ozbourne, 107 Tenn. 572, 89 Am. St. Rep. 957, 64 S. W. 902.
7 Banaghan v. Malaney, 200 Mass. 46, 85 N. E. 839.
1King v. Hamlet, 2 Myl. & K. 456; see Attitude of Public Policy Towards the Contract of Heirs Expectant and Reversioners, by Thos. H. Breeze, 13 Yale Law Journal, 228; Post - Obits and Equity, by John M. M'Candlish, 4 Juridical Review, 25.
2Davis v. Marlborough, 2 Swanst. 113, 147. For the principles applicable see Sec. 463.
3Chesterfield v. Janssen, 2 Ves. Sr. 125, 157; Aylesford v. Morris, L. R. 8 Ch. 484, 491.
4 Peacock v. Evans, 16 Ves. Jr. 512a, 514.
5O'Rorke v. Bolingbroke, L. R. 2 App. 814; Jones v. Ricketts, 31 Beav. 130; Peacock v. Evans, 16 Ves. Jr. 512a.
6Chambers v. Chambers, 139 Ind. Ill, 38 N. E. 334; Hight v. Carr, 186 Ind. 39, 112 N. E. 881; Osgood v. Franklin, 2 Johns. Ch. (N. Y.) 1, 7 Am. Dec. 513.
7 Parsons v. Ely, 45 III. 232; Whelen v. Phillips, 151 Pa. St. 312, 25 Atl. 44; Mastin v. Marlow, 65 N. Car. 695; Cribbins v. Markwood, 54 Va. (13 Gratt.) 495, 67 Am. Dec. 775.
8Steinfeld v. Nielson, 15 Ariz. 424, 139 Pac. 879.
9Provident Life & Trust Co. v. Fletcher, 237 Fed. 104.
10Beynon v. Cook, L. R. 10 Ch. 389; In re Wickersham's Estate, 153 Cal. 603, 96 Pac. 311; Whelen v. Phillips, 151 Pa. St. 312, 25 Atl. 44.
Such a sale is absolutely void in Kentucky. Spears v. Spaw (Ky.), 25 L. R. A. (N.S.) 436, 118 S. W. 275.
"It is difficult to perceive any substantial difference between a sale of an expectancy without the written consent of the parent, and a sale with his consent. In neither case does the transaction rest upon any consideration, nor is it supported by an enforceable obligation." Elliott v. Leslie, 124 Ky. 533, 99 S. W. 619 [quoted in Burton v. Campbell, 176 Ky. 495, 195 S. W. 10911.
A conveyance by a feme covert does not pass an expectancy. Taylor, v. Swafford, 122 Tenn. 303, 25 L. R. A. (N.S.) 442, 123 S. W. 350.
11 Chesterfield v. Janssen, 2 Ves. Sr. 125; Taylor v. Swafford, 122 Tenn. 303, 25 L. R. A. (N.S.) 442, 123 S. W. 350.
12 Bacon v. Bohham, 33 N. J. Eq. 614.
If a life tenant takes an unfair advantage of the remainderman,18 or if he causes a sale of the property without notice to remainder-man, and without giving him an opportunity to contribute,19 such remainder-man may hold the purchaser as trustee.