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.
§ 128. Before passing from the consideration of the rights and liabilities of parties after execution in whole or in part, to which the previous sections of this chapter have been chiefly devoted, it should be observed that to plead or set up such execution is generally the privilege of the party from whom it has proceeded, and that it cannot in any way avail his adversary or any third party.4
1 King v. Brown, 2 Hill (N. Y.) 485; Erben v. Lorillard, 19 N. Y. 209; Wm. Butcher Steel Works v. Atkinson, 68 111. 421; Galvin v. Prentice, 45 N. Y. 162; Williams v. Bemis, 108 Mass. 91; Whipple v. Parkes, 29 Mich. 369; Scotten i;. Brown, 4 Harr. (Del.) 324; Hale v. Stuart, 76 Mo. 20. Quaere as to Lisk v. Sherman, 25 Barb. 433, and Ham v. Goodrich, 37 N. H. 185.
2 Boyd v. Stone, 11 Mass. 342.
3 Kidder v. Hunt, 1 Pick. 328. See Dung v. Parker, 52 N. Y. 494; Heilman v. Weinman, 139 Pa. St. 143.
4 Glenn v. Rogers, 3 Md. 312. But see Barton v. Smith, 66 Iowa 75 And see post, Chap. XX.
§ 129. The extent to which courts of equity recognize verbal contracts upon which actions at law are prohibited by the Statute of Frauds, is necessary to be here remarked. It is true that the statute is correctly held to be as binding in equity as at law, and such a contract cannot under ordinary circumstances, be specifically enforced, any more than the damages for a violation of it can be recovered by action. But, at the same time, equity pays great regard to the moral obligation growing out of it. We have already seen that a court of equity will not interfere to rescind such an agreement at the suit of one party, when the other is not in default. And while it is not accurate to say that the verbal agreement will be always admitted as a defence in those courts, since that would be to relieve them entirely from the binding power of the statute, it seems to be clear that they will not lend their aid to enforce and perfect a legal right which the plaintiff sets up, against his conscientious duty under a verbal contract interposed on the part of the defence.1 Thus, where an execution creditor verbally agrees with his debtor, that he will buy in the premises at the sheriff's sale, and, on being repaid the amount of the execution, or on any other specified terms, will reconvey to the debtor, and afterwards, by representing those facts at the sale, is enabled to buy at a great sacrifice, a court of equity will refuse to ratify the sale at his instance.2 And again, where two men agreed to purchase certain land jointly, and one of them took the deed in his own name, and the heirs of the other applied for an order for the conveyance of a moiety, and the defendant set up a verbal agreement between himself and the other party to pay a certain sum of money and convey to him a certain tract of land in satisfaction of his claim in the joint purchase, which agreement the defendant had in part performed, - it was admitted that the latter agreement, though it could not be sued upon at law, might be a legitimate defence to the claim which the plaintiff would otherwise have had to the relief of a court of equity; but in the present case, the terms of the agreement not being clearly shown, the defence was not allowed.1
1 Jarrett v. Johnson, 11 Grat. (Va.) 327; Story, Eq. Jur. § 1522. See Hughes v. Hatchett, 55 Ala. 539.
2 Rose v. Bates, 12 Mo. 30. And see Moore v. Tisdale, 5 B. Mon. (Ky.) 352, and Letcher v. Cosby, 2 A. K. Marsh. (Ky.) 106.
§ 130. Upon similar grounds, and, it seems, at law as well as in equity, if a conveyance be made in pursuance of a verbal contract for the sale of land, it will be good against a party who claims under an intermediate written contract; in such a case, a court of equity will of course refuse the latter party a conveyance.2 Some of the cases appear to say that the rule prevails only where the complainant took his written engagement with notice of the defendant's prior rights, but this can hardly be so, on principle. The true ground of the rule is well stated by the Supreme Court of Kentucky: "The vendor may avoid it [the verbal contract] by pleading or relying on the statute, yet he is left at liberty to waive his right to the defence and consummate the contract, and cannot be deprived of his election to do so by a stranger. Though a vendor is not legally bound to fulfil his contract by a conveyance, yet a moral duty rests upon him to convey, and a moral right in the vendee to ask a conveyance, and if the former choose to waive his legal right, in obedience to the dictates of his moral duty, by conveying or furnishing written evidence of his obligation to convey, a stranger to the contract has no right to complain, nor to preclude him from this discharge of his moral duty, in whole or in part, upon the terms of the original parol contract, or upon terms which he may choose to exact, and which the vendee or subpurchaser may be willing to concede."1
1 Nichols v. Nichols, 1 A. K. Marsh. (Ky.) 166. Probably, in this case, the purchase-money for the land in question was all paid by the defendant himself, as otherwise the heirs could have obtained a conveyance to the extent of the share paid by their ancestor, on the ground of a resulting trust. The statute will not protect one who is equitably bound to convey land, although by a contract on which no action could be maintained against him by his vendee, in representing the title of the vendor to be good, and thereby inducing others to purchase from him. In such case, he will be compelled to convey to the second vendee, not by obligation of his contract with the first, but on account of the fraud practised on the second. Springle v. Morrison, 3 Litt. (Ky.) 52. See, upon this subject, Thompson v. Mason, 4 Bibb (Ky.) 195, where it is intimated, that it would make no difference as to the availability of a verbal contract to rebut a complainant's equity, though it might have been previously in suit in a court of equity, and refused to be enforced on the ground of the Statute of Frauds.