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 is in possession when the contract for the sale of the realty is made the subsequent construction by him of valuable improvements in reliance on such contract may amount to part performance.1 Such improvements, however, must be made with the consent of the vendor.2 They must be of substantial benefit to the property. Repairs,3 improvements in the ordinary course of husbandry,4 or the setting out of flowers and shrubbery,5 are not valuable improvements in this sense. The improvements must be constructed at the expense of the vendee. If made by a third person,6 or by vendee at the expense ant, and acceptance by the lessor of the reduced rent were held to take the case out of the statute.)
1 Manly v. Howlett, 55 Cal. 94; Morrison v. Herrick, 130 111. 631; 22 N. E. 537; affirming, 27 111. App. 339; Drum v. Stevens, 94 Ind. 181; Bard v. Elston, 31 Kan. 274; 1 Pac. 565; Dawson v. McFadden, 22 Neb. 131; 34 N. W. 338; Pugh v. Spicknall, 43 Or. 489; 73 Pac. 1020.
2 Nibert v. Baghurst, 47 N. J. Eq. 201; 20 Atl. 252.
3 Holland v. Atkinson, 112 Ga. 346; 37 S. E. 380; Gallagher v. Gallagher, 31 W. Va. 9; 5 S. E. 297.
4Emmel v. Hayes, 102 Mo. 186; 22 Am. St. Rep. 769; 11 L. R. A. 323; 14 S. W. 209.
5Cooley v. Lobdell, 153 X. Y. 596; 47 N. E. 783.
6 Abbott v. Baldwin. 61 X. H. 583. Here the improvements were made by one to whom vendee had conveyed the land, and who recon-veyed it to vendee after making such improvements.
of the vendor,7 they do not constitute part performance. The vendee must be prejudiced by the making of such improvements. Thus, if a tenant in common buys his co-tenant's share by oral contract and improves the tract, such improvements do not amount to part performance where it is possible to partition the tract so as to set them off to the party making them.8 According to some authorities improvements for the value of which the vendee has been fully compensated, as by the use of the land,9 do not amount to part performance. Other authorities hold that valuable improvements amount to part performance even though the party making them may be fully compensated by the rents and profits of the realty.10 Payment of rent by the party in possession who makes the valuable improvements in question may rebut any presumption that would otherwise arise that such improvements were made in performance of a contract of sale.11