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.
If the vendee, in reliance on the oral contract, has taken possession of the realty sold and has erected valuable improvements thereon the contract is not within the statute in equity.1 Thus if a railroad company, in reliance upon an oral promise for a right of way, has taken possession of the right of way and laid a track thereon,2 or the location of a side track has been altered under contract between the owners of the dominant and servient tenements,3 or a telegraph company builds its line along the right of way of a railroad in reliance on an oral contract with the railroad,4 or a toll-road enters on land under oral contract with the owner thereof and constructs its roads thereon,5 or if A agrees to give a tract of ground for school purposes in consideration that B and others will erect a school-house thereon, and they erect such school-house in reliance on such promise,0 or if A under an oral contract with B for an easement to flood B's lands constructs and uses a mill-dam on B's lands,7 such part performance withdraws the contract from the operation of the statute. On the same principle where A agrees orally to sell to B a half interest in A's land, and A divides the rent with B, and B pays half the cost of certain improvements, these acts amount to part performance.8 In some jurisdictions the courts seem to hold that change of possession and the erection of valuable improvements do not constitute part performance so as to form a basis for specific performance9 though the party who erects such improvements may have compensation therefor10 whether he makes demand for such compensation in an action of ejectment brought by his vendor against him11 or surrenders possession to vendor on demand therefor and sues in equity for compensation.13
1 Hoak v. Trust Co., 95 Fed. 41; 36 C. C. A. 645; reversing 89 Fed. 410; 32 C. C. A. 238; Latimer v. Hamill, - Ariz. -; 52 Pac. 364; Mooney v. Rowland, 64 Ark. 19; 40 S. W. 259; Moulton v. Harris, 94 Cal. 420; 29 Pac. 706; Calanchini v. Branstetter, 84 Cal. 249; 24 Pac. 149; Hall v. Ry., 143 111. 163; 32 N. E. 598; Horner v. McConnell, 158 Ind. 280; 63 N. E. 472; Weaver v. Shipley, 127 Ind. 526; 27 N. E. 146; Gilmore v. Asbury, 64 Kan. 383; 67 Pac. 864; Miner v. O'Harrow, 60 Mich. 91; 26 N. W. 843; Mournin v. Trainor, 63 Minn. 230; 65 N. W. 444; Hayes v. R. R.. 108 Mo. 544; 18 S. W. 1115; Hunkins v. Hunkins, 65 N. H. 95; 18 Atl. 655; Luton v. Badham. 127 N. C. 96; 80 Am. St. Rep. 783; 53 L. R. A. 337; 37 S. E. 143; Cauble v. Worsham, 96 Tex.
86; 97 Am. St. Rep. 871; 70 S. W. 737; La Master v. Dickson, 91 Tex. 593; 45 S. W. 1; affirming 17 Tex. Civ. App. 473; 43 S. W. 911; Wanh-scaffe v. Pontoja (Tex. Civ. App.), 63 S. W. 663; Graves v. Smith, 7 Wash. 14; 34 Pac. 213; Mudgett v. Clay, 5 Wash. 103; 31 Pac. 424.
2 Denver, etc., R. R. v. Ristine, 77 Fed. 58; 23 C. C. A. 13; Capps v. Ry., 21 Tex. Civ. App. 84; 50 S. W. 643.
3 Kent Furniture Mfg. Co. v. Long, 111 Mich. 383; 69 N. W. 657.
4 Western Union Telegraph Co. v. R. R., 86 111. 246; 29 Am. Rep. 28.
5 Uncanoonuck Road Co. v. Orr, 67 N. H. 541; 41 Atl. 665.
6 Martin v. McCord, 5 Watts. (Pa.) 493: 30 Am. Dec. 342.
7Heiskell v. Cobb, 11 Heisk. (Tenn.) 638; and see Wilson v.