Case ID: shan-cas_1/html/0048-01.html
Source: Caselaw Access Project
Author: {"author": "Green, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

HANSARD v. SHARP.
    (S. C., Thomp. Cas., 73-75.)
    Knoxville,
    September Term, 1850.
    RESCISSION OP CONTRACTS. Por gross inadequacy of consideration.
    Where a person sells an interest in an estate for about one-seventh of its least estimated value, and gives a bond to the purchaser to refund the purchase money, if it is not realized out of the .estate, and there is realized out of the estate more than twice its estimated value, the contract will be set aside in equity, although there was no actual or active fraud upon the j>art of the purchaser. This will be done because the inadequacy of the consideration paid is so gross and glaring as to be startling, and because it is “according-to the very right of the case.” [An executed contract will not be set aside or rescinded in equity for mere inadequacy of consideration, of itself, unaccompanied by other circumstances raising a presumption of fraud, unless the inadequacy be so gross and manifest as to be shocking, and equivalent to proof of fraud. Wright v. Wilson, 2 Yer., 294; Hardeman v. Buage, 10 Yer., 204; Coffee v, Ruffin, 4 Cold., 507, 508; Deaderick v. Watkins, 8 Hum., 520; Ins. Co. v. Hamilton, 3 Tenn. Chy., 231-234; Merriman v. Laceheld, 4 Heis., 219. The g-eneral rule of rescission requires, as a condition precedent, that the complaining party shall return the property or consideration received, and place the other party-in statu quo. Hill v. Harriman, 11 Pickle, 305.]
   Green, J.:

A cause more difficult to fix upon clear and satisfactory grounds I liave never seen. It has been argued ahly and zealously at a former term, and again at this term.

It is a bill whereby Hansard seeks to set aside a contract transferring his interest in an estate in Virginia. The estate was in litigation there; but the question was as to the quantity of interest, not as to the existence or the validity of an interest or claim. Neither party knew what the amount would be, but Hansard knew it would not be less than $1,200 or $1,500. Sharp knew nothing hut whac Hansard told him. Hansard sold to> Sharp for $200; but Sharp has actually received from said Hansard interest in the estate $3,000 — and ma,y receive much more. But he.fore malting a trade which has proven so advantageous, Sharp actually took a bond from Hansard to refund the two hundred dollar purchase money in case he, Sharp, should fail to realize anything out of the estate purchased! So Sharp got the certainty of an estate- worth from $1,200 to $1,500, with a chance of being able to realize $3,000 out of his bargain, for $200, and without risking a cent! It is a case of inadequacy purely, but so gross and glaring as to ' strike an observer with surprise and astonishment. A conveyance for one-seventh part of certain profits, and a bond to refund even that! There is no fraud or villainy attached to Sharp in the transaction, nor do we regard this refunding bond as fixing upon it the character of a mortgage. Yet it is an important circumstance to enable us to decide the case without coming into conflict with the established authorities.

This court has always held that mere inadequacy is not a cause for which they will set aside a contract, but the court will look to that as a circumstance, and that connected with other circumstances may support an inference of unfairness upon which the court can act. This effect of inadequacy of price as a ground of relief, is merely to furnish evidence of unfairness in the bargain. The case here is stronger than any in the books. It is startling. It puts the mind upon the inquiry what motives could be operating upon the mind of the vendor. We naturally seek to discover the secret influences brought to bear upon him. Would a sane man make such contract, uninfluenced by some cause which we cannot see? Would a fair man take such a contract? If not, ought a court of equity to permit him to do it? I think not.

It is insisted Lure that Hansard confirmed this contract in conversation; that he expressed himself satisfied; that his family being dissatisfied, he had thought of contesting the bargain; but that he had concluded to abide by it, and that a load was removed from his mind. The complainant was a weak man, and had conceived a high idea of his influence in his church; a preacher attaching undue importance to the weight of his example and standing before his congregation. These conversations were with members of his church, and the expressions used were not spoken in view' of a clear conception of the right of the case.

We affirm the decree granting relief; but there is not a member of the court ’who. does not feel the difficulty of the case. We feel that we adjudge according to the very right of the case. Upon legal principles our convictions are not so clear; but the strength of our impressions are in favor of the decree.

Decree affirmed.