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.
The doctrine of part performance has been considered thus far solely with reference to contracts for an interest in realty. Whether the doctrine has any application to the other classes of contracts included in this section of the statute is a question upon which there is some diversity of opinion. The weight of authority is that part performance is a doctrine of equity which applies solely to contracts for the sale of some interest in realty.1 With reference to contracts which cannot be performed within a year from the date of the making thereof, we have already seen that some courts hold that this clause of the statute has no application to contracts which are to be performed on one side within the year while performance on the other side is to last beyond the year.2 Thus, if A lends B money to be re-paid at
2 Clark v. Guest, 54 O. S. 298; 43 N. E. 862.
3 Andrews v. Broughton, 84 Mo. App. 640. But neither specific performance nor damages for breach of such a contract could be had. 78 Mo. App. 179.
1 Maddison v. Alderson, 8 App. Cas. 467.
2Miles v. Estate Co., L. R. 32 Ch. Div. 266; Donellan v. Read. 3 Barn. & Ad. 899; McDonald v. Crosby, 192 111. 283; 61 X. E. 505; Curtis v. Sage, 35 111. 22; Hodgens v. Shultz, 92 111. App. 84; Smalley v. Greene, 52 la. 241; 35 Am. Rep. 267; 3 N. W. 78; Atchison, etc., R. R. v. English. 38 Kan. 110; 16 Pac. 82; Dant v. Head, 90 Ky. 255; 29 Am. St. Rep. 369; 13 S. W. 1073; Kendall v. Garneau, 55 Neb. 403; 75 X. W. 852; Perkins v. Clay. 54 N. H. 518; Berry v. Doremus. 30 N. J. L. 399; Towsley v. Moore, 30 O. S. 184; 27 Am. Rep. 434; Dur-fee v. O'Brien, 16 R. I. 213; 14 Atl. 857; Seddon v. Rosenbaum, 85 Va. 928; 3 L. R. A. 337; 9 S. E. 326; an interval greater than a year, A is allowed to enforce the contract.3
While performance by one party within the year removes such contracts from the operation of the statute in jurisdictions where this theory obtains, and while such performance is sometimes explained as if it were part performance,4 it is perhaps more accurate to say that these courts look on such contracts as not within the meaning of the statute. Performance within the year makes the executory part of the contract enforceable at law; an effect which technical part performance does not have. Thus, where A promises to give two thousand dollars to his granddaughter when she comes of age in consideration of her parents' relinquishing a defence to notes signed by them and held by A, performance by the parents within the year takes the case out of the statute.5
Even these courts hold that if the contract is not to be performed by either party within the year, part performance does not take the case out of the statute.6 Thus, an oral contract made on February 15, 1895, to issue a fire insurance policy for one year on the 24th of the next June and annually thereafter on the 24th of each June until otherwise ordered by the insured is not taken out of the statute by issuance of such policy for two consecutive years.7
It must be remembered that some courts hold that full performance on one side within the year does not withdraw the contract from the operation of the statute where the other side has agreed to perform acts which cannot be performed within the year.8 So an oral agreement by A, a guarantor, of an overdue note with B, the holder thereof, that if B would bid the property in and hold it till the redemption period had expired (which would carry performance past the year) A would pay the amount due on the notes and the costs of foreclosure if the property were not then redeemed, is not taken out of the statute by performance by B.9
Grace v. Lynch, 80 Wis. 166; 49 N. W. 751.
3 McDonald v. Crosby, 192 111. 283; 61 N. E. 505.
4 Piper v. Fosher, 121 Ind. 407; 23 N. E. 269; Westfall v. Perry (Tex. Civ. App.), 23 S. W. 740.
5 Piper v. Fosher, 121 Ind. 407; 23 N. E. 269.
6 Shumate v. Farlow, 125 Ind. 359; 25 N. E. 432; Lowman v. Sheets, 124 Ind. 416; 7 L. R. A. 784; 24 N. E. 351; Wolke v. Fleming. 103 Ind. 105; 53 Am. Rep. 495; 2 N. E. 325; Clark County v.
Howell, 21 Ind. App. 495; 52 N. E. 769; Powell v. Crampton, 102 la. 364; 71 N. W. 579; Burden v. Knight, 82 la. 584; 48 N. W. 985; Thorp v. Bradley, 75 la. 50; 39 N. W. 177; Osborne v. Kimball, 41 Kan. 187; 21 Pac. 163; Thisler v. Mac-key, 5 Kan. App. 217; 47 Pac. 175; Klein v. Ins. Co. (Ky.), 57 S. W. 250; Lally v. Lumber Co.. 85 Minn. 257; 88 X. W. 846; Hillhouse v. Jennings. 60 S. C. 373; 38 S. E. 599.
7 Klein v. Ins. Co. (Ky.), 57 S. W. 250.
If a contract is a contract for some interest in realty and also one which cannot be performed within the year, as a contract for a lease for more than one year, the courts are divided as to whether part performance can take it out of the statute. Some courts hold that part performance takes such contract out of the statute ;10 and others that it does not.11