Case

Undue Influence Hodge v. Shea 168 S.E.2d 82 (S.C. 1969)

Facts: The defendant had been plaintiff's (Dr. Hodge's) patient for several years. He was 75, an inebriate of long standing, and was afflicted by grievous chronic illnesses, including arteriosclerosis, cirrhosis of the liver, and arthritis which required constant medication and frequent medical attention, and rendered him infirm of body and mind, although not to the point of incompetency to contract. Mr. Shea was separated from his wife and lived alone. He was dependent upon Dr. Hodge for house calls, which were needed from time to time. His relationship with his physician, who sometimes visited him as a friend and occasionally performed non-professional services for him, was closer than ordinarily arises from that of patient and physician. A 125-acre tract of land near Mr. Shea's home, adjacent to land, which was being developed as residential property, was one of his most valuable and readily salable assets. In 1962, the developer of this contiguous land offered to buy it at $1000.00 per acre, but Mr. Shea, on the advice of his son-in-law Ransdell, refused to sell, asserting that the property was worth at least $1500.00 per acre. Negotiations between the developer and Mr. Ransdell were in progress when Mr. Shea, at the instance of Dr. Hodge and without consulting Mr. Ransdell or anyone else, the defendant, in the plaintiff's medical office, signed the contract of August 19, 1965. Under this contract Dr. Hodge claims the right to purchase twenty choice acres of the 125-acre tract for a consideration calculated by the circuit court to be $361.72 per acre. The consideration was expressed in the contract between Dr. Hodge and Mr. Shea as follows:

The purchase price being (Cadillac Coupe DeVille 6600) & $4000.00 Dollars, on the following terms: Dr. Joseph Hodge to give to Mr. George Shea a new $6600 coupe DeVille Cadillac which is to be registered in name of Mr. George A. Shea at absolutely no cost to him. In return, Mr. Shea will give to Dr. Joe Hodge his 1964 Cadillac coupe DeVille and shall trans-fer title of this vehicle to Dr. Hodge. Further, Dr. Joseph Hodge will pay to Mr. George A. Shea the balance of $4000.00 for the 20 acres of land described above subject to survey, title check, less taxes on purchase of vehicle.

Dr. Hodge was fully aware of Mr. Shea's financial troubles, the liens on his property and his son-in- law's efforts in his behalf. He was also aware of his patient's predilection for new Cadillacs. Dr. Hodge hastened to purchase the 1965 Cadillac Coupe DeVille and delivered it to Mr. Shea on the day after his discharge from the hospital on August 25, 1965.

Procedure: Plaintiff sued defendant for specific performance. Judgment for plaintiff, defendant appeals.

Issue: Should the old man be bound by the terms of his contract with Dr. Hodge?

Held: No.

Reason: Mr. Shea was the victim of undue influence. Four elements are typically required to establish undue influence. First, that the victim was susceptible to overreaching. Such conditions as mental, psychological, or physical disability or dependency may be used to show susceptibility. Second, there must be an opportunity for exercising undue influence. Typically, this opportunity arises through a confidential relationship (the doctor-patient relationship here). Third, there must be evidence that the defendant was inclined to exercise undue influence over the victim. Defendants who aggressively initiate a transaction, insulate a relationship from outside supervision, or discourage a weaker party from seeking independent advice may be attempting to exercise undue influence. Fourth, the record must reveal an unnatural or suspicious transactioninadequate consideration. All those elements are present here. Judgment reversed and remanded.

The Supreme Court affirmed the District Court's judgment.

Case Questions

1. Why is it relevant that Mr. Shea was separated from his wife and lived alone?
2. Why did the doctor offer the old man a Cadillac as part of the deal?
3. If you agree to sell your real estate for less than its real value, that's just a unilateral mistake and the courts will grant no relief. What is different here?
4. Student Feedback Question. How was your experience reviewing and responding to the case?