Upon the same general principle, bonds restraining the right of alienation have been ordered to be delivered up, as opposed to public policy.1 229. The last of the contracts which will be noticed as being void on the ground of illegality in their subject matter, are contracts for the procurement of sale of public offices. Sir John Strange, M. R., in his opinion in Chesterfield v. Janssen,2 says: "So in bargains to procure offices, neither of the parties is defrauded or unapprised of the terms, but it seems to introduce unworthy objects into public offices; and, therefore, for the sake of the public the bargain is rescinded." The conduct of equity in such a case is but in accordance with a general principle by which courts of chancery, and, inindeed, every other tribunal, would discourage, in every way, contracts opposed to good morals and sound public policy. The examples of illegal contracts already given, are but instances of this general principle; and it might not be too much to say that in every case where rules of public policy are violated, and where relief could be afforded by the machinery of a court of chancery, and where a full, adequate, and complete remedy could not be had at common law, equity will interpose for the purpose of restraining an action brought to enforce such a contract, or to compel the surrender of the instrument by which it had been secured. SECTION III. FRAUD PRESUMED FROM THE RELATIONS OF THE PARTIES. 230. Mental disability; drunkenness; | 234. Guardian and ward. 231. Undue influence; gifts; Huguenin v. 236. Solicitor and client. Baseley. 232. Contracts; Tate v. Williamson. 233. Parties between whom confidential relation ordinarily exists. 237. Trustee and cestui qui trust. 238. Fiduciary can make no profit; Bank v. Tyrrell. 239. Promoters of companies. 230. The third species of fraud, according to Lord Hardwicke's classification, is that which is presumed from the circumstances 1 Jervis v. Bruton, 2 Vern. 251; Freeman v. Freeman, 2 Vern. 233; Poole's Case, Moore, 810. 21 Atk. 301. See, also, Boynton v. Hubbard, 7 Mass. 119. and condition of the parties contracting; and this may, perhaps, be again subdivided into two classes, viz., first, where one of the parties is laboring under some mental disability; and, secondly, where the transaction takes place under undue influ ence. As to the first of the two classes, mere weakness of mind is not of itself a sufficient ground for equitable interference. It would be impossible to carry on the business of the courts, if they undertook to interfere in every case in which a superior and more astute intellect obtained an advantage in a bargain over a dull or feeble mind. But an entire absence of intellectual power, or great mental aberration will be sufficient to cause a contract to be rescinded. Hence the contracts of idiots and lunatics are void, or, at least, voidable. And while mere weakness of mind will not be enough, of itself, to justify a rescission, it will nevertheless always constitute an important element in actual fraud. If, therefore, a transaction be in the slightest degree tainted with deceit, the intellectual imbecility of the injured party will be laid hold of by a chancellor to make out a case of actual fraud, which might otherwise be incapable of proof. Whatever be the cause of the mental weaknesswhether it arise from permanent injury to the mind, or temporary illness, or excessive old age-it will be enough to make the court scrutinize the contract with a jealous eye; and any unfair 1 Osmond v. Fitzroy, 3 P. Wms. 129; Ex parte Allen, 15 Mass. 58; Hadley v. Latimer, 3 Yerg. 537; Rogers v. Higgins, 57 Ill. 247; Killian v. Badgett, 27 Ark. 166; Mann v. Betterly, 21 Verm. 326; Thomas v. Sheppard, 2 McCord Eq. 36; Rippy v. Gant, 4 Ired. Eq. 443; Nace v. Boyer, 6 Casey, 99; Hyer v. Little, 5 C. E. Green, 443; Lozear v. Shields, 8 Id. 509; Stiner v. Stiner, 58 Barb. 643. 2 Allis v. Billings, 6 Met. 415; Breckenridge v. Ormsby, 1 J J. Marsh. 239; Desilver's Est., 5 Rawle, 111; Bensell v. Chancellor, 5 Whart. 376; Beals v. See, 10 Barr, 56. 8 See Hill on Trustees, 46 (73, 4th Am. ed.). See, also, Howe v. Howe, 99 Mass. 4 Nottidge v. Prince, 2 Giff. 246; Baker v. Monk, 33 Beav. 419; Boyse v. Rossborough, 6 H. L. Cas. 2; Harding v. Handy, 11 Wheat. 103; Tracey v. Sacket, 1 Ohio St. 54; Whitehorn v. Hlines, 1 Munf. 557; Whelan v. Whelan, 3 Cow. 537; Deatly . Murphy, 3 A. K. Marsh. 472; Brogden v. Walker, 2 H. & J. 285; Rumph v. Abercrombie, 12 Ala. 64. 5 Malin v. Malin, 2 Johns. Ch. 238; Hutchinson v. Tindall, 2 Green Ch. 357, Rumph v. Abercrombie, 12 Alab. 64; Hunt v. Moore, 2 Barr, 105; Brady's Appeal, 16 P. F. Sm. 277; Huguenin v. Baseley, 14 Ves. 273; Harding v. Handy, 11 Wheat. 103; Hill on Trustees, 154. ness or overreaching will be promptly redressed.1 A mere latent suspicion of unfairness, however, will not be enough.2 On the other hand, it need scarcely be remarked that the mere circumstance of old age, or physical feebleness, will not render a transaction fraudulent, if, in point of fact, the party is intelligent and capable.3 Drunkenness falls under the same principles. If a man is so far drunk that he is substantially non compos mentis, his contract will be invalid; but if there is intoxication, not so great in extent, equity will not interfere." It will, however, in cases of partial drunkenness, lay hold of any circumstances tending to show actual imposition, and thus make out a case of actual fraud, especially if the drunkenness has been brought about by the contrivance of the other party to the transaction." Equity will also relieve against contracts obtained under duress, fear, apprehension, or extreme distress." Thus in Williams v. Bayley, it was held that a father, whose name had been forged by his son, and who had been appealed to, to take the amount of the liability upon himself, knowing that unless he did so his son would be exposed to a criminal prosecution with the certainty of conviction, could not be regarded as a free and voluntary agent, so as to render a security given under such a pressure valid.8 But a bill will not lie for rescission on the ground of duress after the contract.9 231. Passing now to the second class of cases, those, namely, in 1 Hill on Trustees, 155; Perry on Trusts, 22 190, 191; Matthews v. Baxter, 28 L. T. N. S. 169. 2 Hetrick's Appeal, 8 P. F. Sm. 477. 3 Gratz v. Cohen, 11 How. 19. See, also, Lewis v. Pead, 1 Ves., Jr. 19; Pratt v. Barker, 1 Sim. 1; 4 Russ. 507; Graham v. Pancoast, 6 Casey, 89. See Co. Litt. 447, a. 5 Gore v. Gibson, 13 M. & W. 623; Clifton v. Davis, 1 Pars. Eq. 31; Johnson v. Meddlicot, 3 P. Wms. 131, n.; Cory v. Cory, 1 Ves., Sr. 19; Maxwell v. Pittinger, 2 Green Ch. 156; Selah v. Selah, 8 C. E. Green, 185; Morrison v. McLeod, 2 Dev. & Bat. Eq. 221; Harbison v. Lemon, 3 Blackf. 51. 6 Crane v. Conklin, Saxt. 346; Cory v. Cory, 1 Ves., Sr. 19; Calloway v. Witherspoon, 5 Ired. Eq. 128; Phillips v. Moore, 11 Missouri, 600; Shaw v. Thackray, 1 Sm. & Giff. 537. 7 Hill on Trustees, 156. 8 Williams v. Bayley, L. R. 1 H. L. Cas. 218. See French v. Shoemaker, 14 Wal. 233. 9 Fulton v. Loftis, 63 N. C. 393. which the fraud springs from the circumstances and condition of the parties to the transaction, it may be stated, as a general rule, that relief will be afforded, in equity, in all transactions in which "influence has been acquired and abused, in which confidence has been reposed and betrayed." The transaction which takes place under undue influence may be either in the nature of a gift, or of a contract. In either aspect it is regarded by courts of equity with a jealous eye, but the scrutiny in cases of gifts is more severe and searching than in those of contracts. The leading authority upon the subject of gifts which are obtained through undue influence, is Huguenin v. Baseley, where a widow lady executed a voluntary settlement upon a clergyman who had ingratiated himself with her, and had induced her to withdraw her affairs from the hands of her solicitor by whom they had been previously managed; and the settlement was set aside, on the ground of the confidential relations of the parties. "The question," said Lord Eldon, " is not whether she knew what she was doing, had done, or proposed to do, but how the intention was produced; whether all care and providence was placed around her, as against those who advised her, which from their situation and relation in respect to her they were bound to exert on her behalf." So in a modern case the court said that, had it not been for the length of time during which the transaction had been acquiesced in and by which alone the complainant was barred, a gift from a daughter, soon after attaining twenty-one, to her father would have been set aside solely on the ground of the jealousy with which, upon principles of natural justice and upon considerations important to the interests of society, the law examines, scrutinizes, and weighs in golden scales every such transaction.3 If 1 Smith v. Kay, 7 H. L. Cas. 750. This language of Lord Kingsdowne is even more striking than that used by Sir Samuel Romilly in his celebrated reply in Huguenin v. Baseley, viz., that "the relief stands upon a general principle applying to all the variety of relations in which dominion may be exercised by one person over another." 2 14 Ves. 273; 2 Lead. Cas. Eq. 556 (4th Eng. ed.). See Kirwan v. Cullen, 4 Ir. Ch. R. 330, and Falk v. Turner, 101 Mass. 494, for cases which were held not to fall under the doctrine of Huguenin v. Baseley. 3 Wright v. Vanderplank, 8 De G. M. & G. 137. See, also, Turner v. Collins, L. R. 7 Ch. App. 329; Hoghton v. Hoghton, the person who stands in the confidential relation wishes to hold the benefit conferred, he must show that the person conferring it had competent and independent advice.1 The same considerations, however, are not universally applicable to testamentary dispositions. Thus a client may make a gift to a solicitor by will, even though the will is drawn by the solicitor, provided the will was not made under any mistake or misapprehension caused by the solicitor.2 Even gifts between persons who stand in no confidential relation to each other are watched with jealousy. 232. Passing now from the subject of gifts, to that of contracts, it may be stated, as a general rule, that a contract between parties who stand in a confidential relation to each other falls under the principle laid down by Lord Kingsdowne in Smith v. Kay.* Wherever two persons stand in such a relation that while it continues confidence is necessarily reposed by one, and the influence which necessarily grows out of that confidence is possessed by the other, and this confidence is abused, or the influence is exerted to obtain an advantage at the expense of the confiding party, the person so availing himself of his position will not be permitted to retain the advantage, although the transaction could not have been impeached if no such confidential relation had existed. There can be no contract between the two, except after the fullest and fairest explanation and communication of every particular resting in the breast of the one, who seeks to 15 Beav. 278; Prideaux v. Lonsdale, 1 De G. J. & Sm. 433; Everitt v. Everitt, L. R. 10 Eq. 405; Tomson v. Judge, 3 Drew. 306; Broun v. Kennedy, 33 Beav. 133; 4 De G. J. & Sm. 217; Savery v. King, 5 H. L. Cas. 626; Lyon v. Home, L. R. 6 Eq. 655 (where a transfer of £24,000 by an old lady of seventy-five to a spiritualist was set aside); Fulham v. McCarthy, 1 H. L. Cas. 703; Greenfield's Estate, 2 Harris (Pa.), 507; Taylor v. Taylor, 8 How. 183; Slocum v. Marshall, 2 Wash. C. C. 397; Todd v. Grove, 33 Maryl. 188; Turner v. Turner, 44 Mis. 535. But in Jenkins v. Pye, 12 Peters, 253, Mr. Justice Thompson declined to accede to the proposition that a conveyance from a child to a parent was primâ facie void. 1 Rhodes v. Bate, L. R. 1 Ch. App. 252. 2 Hindson v. Weatherill, 5 De G. M. & G. 301. Agreements between solicitor and client are now regulated in England by Stat. 33 and 34 Vic., c. 28 (Attorneys' and Solicitors' Act of 1870); 2 Lead. Cas. Eq. 390. 32 Lead. Cas. Eq. 582. See Cooke v. Lamotte, 15 Beav. 234 4 7 H. L. Cas. 750; ante, p. 229. 5 Tate v. Williamson, L. R. 2 Ch. App. 61, per Lord Chelmsford. |