§ 114. We come now to consider the Statute of Frauds in its application to contracts; a branch of the subject of superior importance, and upon which the decisions of the courts of both countries have been very numerous, presenting a great variety of questions of acknowledged difficulty. The method proposed for the discussion of it is that suggested by the very arrangement of the sections above quoted from the English statute, and it is to examine, First, How far the statute affects verbal contracts; Secondly, What are the contracts embraced by it; and, Thirdly, What are the formalities which it requires in the making of such contracts; or, more briefly, its operation, its subject-matter, and its requirements. The first of these divisions will form the subject of the present and the succeeding chapter.

§ 115. At the outset, we note the difference in phraseology between the fourth and seventeenth sections, in this, that the former says "no action shall be brought" upon the contract, and the latter says the contract shall not be "allowed to be good." There seems to be no reason to attribute to the latter phraseology any force, or to draw from it any inferences, different from those which attend the construction of the former. "Allowed to be good" appears to mean, considered good for the purposes of recovery upon it;l and the remaining portions of the two sections in question being very similar, and the policy of the two being very clearly the same, we should not be justified in laying much stress upon the change of phrase. The whole statute is undeniably put together most irregularly and loosely. Many of our States, in adopting the substance of it, have disregarded the difference alluded to, and put the sales of goods into the same section with other contracts, extending to them a common provision, that no action shall be brought, etc.

1 Townsend v. Hargraves, 118 Mass. 325, 334.

§ 115 a. The operation, then, which the statute has upon a contract covered by it, is that no enforcement of the contract can be had, while the requirements of the statute remain unsatisfied, if the party against whom enforcement is sought choose to insist upon this defence; the statute does not make the contract illegal; a contract which was legal and actionable before the statute is legal since and notwithstanding the statute, and is also actionable or enforceable if the making of the contract be followed by compliance with the requirements of the statute.1 Compliance with the requirements of the statute does not constitute the contract; the statute presupposes an existing lawful contract, the enforcement of which is suspended till the statute is satisfied.

§ 116. Where the contract has been in fact completely executed on both sides, the rights, duties, and obligations of the parties resulting from such performance stand unaffected by the statute.2 An apt illustration of this familiar doctrine is

1 In previous editions of this treatise, the operation of the statute has been defined, as the mere prescription of a rule of evidence. It is still believed that this view is the true one, and that the cases which are inconsistent with it rest upon uncertain ground. But it is perhaps better to avoid, as far as may be, prejudging open questions in introductory definitions. The statement in the present text will be found to be as precise as the condition of the law will warrant. Since the foregoing was written, it has been confirmed by Lord Blackburn in an opinion delivered in Maddison v. Alderson, L. R. 8 H. L. C. 467.

2 Stone v. Dennison, 13 Pick. (Mass.) 1; Mushat v. Brevard, 4 Dev. (N. C.) 73; Ryan v. Tomlison, 39 Cal. 639; Niland v. Murphy, 73 Wisc. 326; Haussman v. Burnham, 59 Conn. 117; Gordon v. Tweedy, 71 Ala. 202; Webster v. Le Compte, 74 Md. 249; Larsen v. Johnson, 78 Wisc. 300; Baldock v. Atwood, 21 Oregon 73; Bibb v. Allen, 149 U. S. 481; afforded by the case of a verbal agreement for a lease not exceeding three years, followed by an actual verbal demise accordingly; here no action would lie upon the agreement while executory, but after it is executed by the creation of a tenancy such as the statute allows to be created without writing, both parties are bound by the terms of the tenancy, and neither party can avail himself of the fact that the agreement could not, in the first instance, have been enforced against him.1 The same rule applies when goods are delivered and paid for, or a guarantor has paid, as he agreed to do, upon the default of the principal debtor; neither party can recover what money he has paid or what property he has delivered, though it may be that he could not have been compelled at law to pay or deliver; still less can the principal debtor for whom the guarantor has paid, or any third person for whom another has purchased goods, avoid the just claim of the guarantor or of the purchaser for reimbursement, on the ground that they could not have been compelled at law to make the payments which they now seek to have made up to them. So with all cases of contracts embraced by the statute.2 When fully executed on both sides, the positions of the parties are fixed, subject, of course, to the power of a court of equity to afford relief in cases of fraud and mistake.

§ 117. When so much of a contract as would bring it within the Statute of Frauds has been executed, all the remaining stipulations become valid and enforceable, and the parties to the contract regain all the rights of action they would have had at common law. Thus when, in pursuance of a verbal contract, a conveyance or lease of land is executed, or goods are sold and delivered, an action may be maintained for the breach of the promise to pay the price, or of any of the other stipulations of the contract;1 provided, of course, they are not such stipulations as the statute requires to be in writing.2

Grippen v. Benhara, 5 Wash. 589. But see De Moss v. Robinson (Cooley, J., dissenting), 46 Mich. 62.