This section is from the book "A Treatise On The Construction Of The Statute Of Frauds", by Causten Browne. Also available from Amazon: A treatise on the construction of the Statute of frauds.
"But to say that this takes the whole agreement out of the operation of the statute, is virtually disregarding both its terms and all the beneficial objects of its adoption. It is the contract sued upon, which, by its tion had not uniformly arisen on cases where the stipulation sought to be enforced related solely to the payment of the being of the older date than one year, exposes to the evils of fraud and perjury. And these evils are none the less because the consideration has been performed within the year. The consideration may be a peppercorn or a thousand dollars; it may be money, labor, goods, or a counter-promise, and it may be executed or executory, and the danger of fraud or perjury is not materially increased or diminished. The danger of fraud and perjury is chiefly connected with the proof of that portion of the contract sued, and if that is not to be performed within the year, in our judgment, no action can be sustained upon the contract or agreement, consistently with a fair interpretation of the statute; and this, we think, is the only consistent result of the decided cases upon this point.
"The case of Donellan v. Read was where improvements upon premises in the occupancy of a tenant, had been made at his request, upon a contract to pay an increased rent during the remainder of his term, which was more than one year. He enjoyed the benefit and use of the improvements, and declined to pay for them. The court held the contract not within the statute. This was immaterial to the recovery. The defendant had received the benefit of the improvements, and had agreed to pay £5 for the use annually. This contract was not binding, or could not be sued specially, but a recovery could be had for the use, and that is all this case decides; the declaration containing the count for use and occupation, and the money counts. It is like the case of a contract to demise premises for five years, without writing. No action can be maintained upon the contract. But if the defendant occupy the premises, a recovery may be had for the use and occupation, and the agreed rent may be adopted, as the probable value of use. So the argument of Littledale, J., in this case, which seems to have been regarded by him as quite conclusive, is nothing more than saying, if one party, after having received goods or money on a contract within the Statute of Frauds, repudiates the contract, he must answer for the money or goods. It is said this case has been reaffirmed in a late case in the Exchequer, Cheney [Cherry] v. Heming, 4 Exch. 631. But as it does not go further than Donellan v. Read, it requires no further answer; it is, indeed, far more questionable than Donellan v. Read. And Holbrook v. Armstrong, 1 Fairfield 31, which is sometimes referred to upon this point, as confirming the case of Donellan v. Read, is only a recovery for money or goods which came to the defendant's use.
"We must then fall back upon the ground quoted from Mr. Wallace's note, and the cases referred to, that no recovery can be had if the contract sued upon was not in writing and not to be performed within one year. And no recovery can be had upon the consideration unless it has come to the defendant's use.
"To apply this to the present case, no question is made that the demoney consideration. In such cases it is a mere point of form in bringing the action, the plaintiff's right to recover fendant's portion of the contract was not to be performed within the year, inasmuch as one full year was to expire before the plaintiff made his election whether to transfer the stock to the defendant or not, and this was to determine the defendant's obligation. If the plaintiff elected to keep it, he could, and the profits, for that term, were to be divided. If he elected to transfer, the defendant was to pay him the money he had paid out, and interest, and the profits to be divided between them, the defendant to pay half the advance in price; so that clearly the defendant could not know what was the nature of his obligation till after the year had expired. This is the plaintiff's own version of the facts. The witness, Warner, finally said he thought the defendant guaranteed the stock to be good at the end of the year, or that he would then take it and pay the cost and interest, and half the advance in price, if any. But all the testimony gives one full year before the defendant's obligation attached; of course it could not be performed within the year.
"Upon the point whether the payment of the money came to the defendant's use, so that it may be recovered back, it seems very clear to us that it did not. The plaintiff himself says that he had an election to keep the stock himself, at the end of the year. The stock was not then to become the defendant's till the end of the year, and there is no pretence it ever did become his, so as to vest any title or use in him, unless a proxy may be so regarded, and we think this is no use for which any recovery can be had.
"In looking in the cases, the leading case of Peter v. Compton is a full authority to show that it makes no difference as to the binding force of a contract, not to be performed within the year, that is performed within the year upon one side. In that case the consideration was paid down. And this case is not questioned, except that incidentally it is said to be limited by Donellan v. Read. But Tindal, C. J., puts this upon the true ground, in Souch v. Strawbridge, 2 C. B. 808, that there may always be a recovery when there has been full performance on one side, accepted, or which comes to the use of the other. But in the present case nothing came to the defendant's use. So, too, in Broadwell v. Getman, 2 Denio 87, Beardsley, J., fully maintains the ground that if the portion of the contract sued was not to have been performed within the year, no action can be maintained upon the contract, and that to hold the contrary is virtually to disregard the statute. The same is expressly decided in Lapham v. Whipple, 8 Metcalf 59. Wilde, J., says: 'To support the action, the plaintiff must prove the contract, and the object of this part of the statute was to prevent the proof of verbal agreements, when, from the lapse of time, the witness might not recollect the precise terms of the agreement.' And in Lockwood v. Barnes, 3 Hill 131, it is said, and has been so held by this court, that a recovery may always be had for peron the indebitatus assumpsit (which count is uniformly found to have been inserted in the declaration) being clear.1 It never has been held in England that an agreement to do some act after the expiration of a year, in consideration of a payment of money made presently, was binding without writing. And the decision in Peter v. Compton, that an agreement, for one guinea paid down, to pay so many on the day of the defendant's marriage, requires a writing, is manifestly to the contrary.2 But it is also shown by that case, and is settled law, that a promise to pay money, as much as a promise to do any other act after the expiration of a year, is within the statute.3 And no substantial reason appears why the mere circumstance that the counter stipulation in such a case is fixed to be performed within the year, should hinder the statute from applying. Again, it is not now doubted that a mere partial execution of a contract that is required by the statute to be in writing, will have no effect at law to take it out of the statute, though it is often made the basis formance, or a part-performance, on one side, of a contract, within this or any other section of the Statute of Frauds, if repudiated by the other party, and this part performance came to the use of the other party. But the payment or performance of the consideration of an agreement or contract within any section of the Statute of Frauds, never takes it out of the statute; if it were so, no contract upon an executed consideration would ever come within the statute. But in all cases of contracts within the statute, where the promisee has done something towards the performance of the contract on his part, and the other party declines to perform on his part, a recovery of what is thus done may always be had, and this is all that the performance of such contract on one side will avail at law, and this only when such performance on one side enures to the benefit of the other side.