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.
One complicating principle remains for notice. While the interests of remainder-men and reversioners can not be affected by the life-tenant, and are therefore not within the principle to be referred to, the interests of expectant heirs and devisees are dependent on the will and caprice of the ancestor or testator. A contract therefore, whereby such expectant heir or devisee transfers to another, in whole or in part, the bounty which his benefactor intends for him, operates as a fraud upon such ancestor or testator if the existence of the contract is not disclosed to him. The opinions of some courts express the view that this reason is the true basis of the doctrine of the "catching bargain," or at least an essential element thereof. Where this view is entertained it is held on the one hand that if the ancestor does not know of such contract and assent thereto, the contract is voidable.1 The effect, on the other hand, of the knowledge and assent of the ancestor, is a question upon which there is a conflict of authority. Most American states seem to hold that if "the transaction has been fully made known, at the time, to the parent or other person standing in loco parentis and is not objected to by him, the extraordinary protection generally afforded in cases of this sort by courts of equity will be withdrawn. A fortiori will it be withdrawn if the transaction is expressly sanctioned and adopted by such parent or person in loco parentis."2 The English courts seem to discard the first of the altermay avoid for his ward. If the property transferred is personal property, he may sue to recover the same at law.3 If a conveyance of real property has been made, a suit in equity for a rescission will lie,4 and is necessary.5 A compromise may be avoided for undue influence.6
4Chambers v. Chambers, 139 Ind. 111, 38 N. E. 334.
5 Chesterfield v. Janssen, 2 Ves. Sr. 125.
6 Batty v. Lloyd, 1 Vera. 141. 7Berny v. Pitt, 2 Vern. 14.
1 McClure v. Raben, 133 Ind. 507, 36 Am. St. Rep. 558, 33 N. E. 275; Hight v. Carr, 185 Ind. 39, 112 N. E. 881.
The fact that the ancestor is of unsound mind, and that he can not therefore give his consent, does not render the transaction valid. Hight v. Carr, 185 Ind. 39, 112 N. E. 881.
In Kentucky the objection to such contracts is placed on the ground that the expectancy has no existence, and that it is impolitic to give a stranger to the ancestor an interest in the lat-ter's death, as well as on the opportunities for fraud upon the expectant heirs. Burton v. Campbell, 176 Ky. 495, 195 S. W. 1091.
For these reasons it is said that such a transaction is in operation even if the ancestor knows and assents. Elliott v. Leslie, 124 Ky. 553, 99 S. W. 619; Hall v. Hall, 153 Ky. 379, 155 S. W. 755; Burton v. Campbell, 176 Ky. 495, 195 S. W. 1091.
"The rule is that it is essential to the legal validity of a contract that the thing sold have an actual or potential existence, and that a mere possibility or contingency not founded on a right or coupled with an interest can not be the subject of a sale or assignment." Spears v. Spaw (Ky.), 25 L. R. A. (N.S.) 436, 118 S. W. 275 [quoted in Burton v. Campbell, 176 Ky. 495, 195 S. W. 10911.
"It will be found from an examination of decisions from this and other courts that the public policy inhibiting such contracts is founded upon the law's regard for the protection of the weak, the youthful and inexperienced. If they should be permitted to sell, convey or transfer their possible inheritances, they would be many times imposed upon by crafty and more experienced speculators taking advantage of that rule of conduct known especially to influence the actions of the youthful and less experienced that 'a bird in the hand is worth two in the bush.' Moreover, to give validity to such contracts would render a stranger to the ancestor or person from whom the expectancy is to be derived beneficially interested in the event of his death so that he might as soon as possible come into possession of the purchased interest of the prospective heir. Such purchaser would not be influenced by the ties of relationship in the continued life of the ancestor, and thus an opportunity would be afforded, unrestrained by such ties, to hasten the vesting event, and for this reason it would be against public policy to offer such temptations. This principle of public policy is analogous to and is on a parallel with another well known one in the law forbidding one not interested in the preservation of the life of another from becoming the beneficiary in an insurance policy issued upon the latter's life." Burton v. Campbell, 176 Ky. 495, 195 S. W. 1091. 2Curtis v. Curtis, 40 Me. 24, 27, 63 Am. Dec. 651. See to the same effect, natives, and hold that the special protection of equity will be with-drawn only if the ancestor adopts the transaction.3 The doctrine of the effect of ancestral interference seems to be well settled; yet, were the question open, both the grounds for applying such principle at all and the logic of the manner of applying it as it is done, would be open to very serious objections. (1) The real reason for the doctrine of the catching bargain is the protection of the improvident heir. The doctrine of ancestral sanction is irreconcilable with this principle except on the theory of independent advice. If this is the real ground, it would follow that if such advice is given and in accordance therewith, the adequacy of the consideration received therefor is immaterial; and it has been so held.4 The interest of the heir, then, seems to be completely ignored. In Jenkins v. Pye,5 the Supreme Court of the United States carried this principle to a logical conclusion by holding that a conveyance by a young woman of an interest in remainder upon the advice of her father, the life-tenant, was valid, though upon an inadequate consideration, and though he advised its conveyance to himself. Other jurisdictions have, however, declined to follow this case.6 (2) A ground for the doctrine of ancestral approval is alleged to be that the "catching bargain" is a fraud upon him and is contrary to public policy. This ground is clearly untenable, since it is assumed that such contracts may be ratified by the expectant heir after the special circumstances have ceased to operate.7 This is plainly inconsistent with the theory of the contract's being illegal or void on the ground of public policy.