from year to year. The abatement of the rent was rather a confirmation of the existing tenancy, with a relaxation of one of the terms of it.(t) § 1011. So, also, a suggestion made by either party after contract for the purpose of obviating any difficulties in the completion of it, will not be taken to amount to a novation, so to hold would be to preclude parties from endeavoring to remove objections by concessions of any kind.(u). § 1012. But where the defendant being in possession of a house under a contract for a lease, the plaintiff and the defendant entered into a further contract to the effect that the plaintiff would accept H. W. as his tenant in lieu of the defendant, and on the same terms, the defendant undertaking to guarantee the rent during H. W.'s tenancy, and H. W. accordingly for several years occupied the property and paid rent, it was held that the latter contract must be considered a substitution for the former. (v) § 1013. As it is the existence of the new contract that works the extinction of the old, this new one must, of course, be a valid contract: so that, for instance, where a second contract is alleged, but without consideration, the original contract will remain intact, and may be executed without regard to the second. (w)' § 1014. This makes it requisite to consider the evidence of the new contract alleged. (1) Where the original contract is by parol, the new one may, of course, be by parol also." (t) Clarke v. Moore, 1 Jon. & L., 723, particularly 728-9. -61. (u) Monro v. Taylor, 8 Ha., 51, particularly (v) Moore v. Marrable, Lr. 1 Ch., 217. 1 In Thurston v. Percival, 1 Pick., 415, services were performed by one person for another, and afterwards the parties entered into a contract as to the compensation, which was illegal. It was held that this agreement did not operate as a merger of the original demand. Possession under parol gift.] Naked possession under an alleged parol gift of land will not constitute such part performance as will take the case out of the operation of the statute of frauds Stewart v. Stewart, 3 Watts, 253; Cronk v. Trumble, 66 Ill., 428; Pinckard v. Pinckard, 23 Ala., 649. Rule as to the degree of occupation.] In order that a court of equity will decree specific performance of a parol agreement the possession of the vendee must be such that if the vendor refuses to complete it will be a fraud upon him. White v. Watkins, 23 Mo., 423; Chambers v. Lecompte, 9 id., 566. Possession must be taken with the permission of the vendor and must refer to and be connected with the contract; in such a case it shows a part performance by the vendor. Lord v. Underdunk, 1 Sandf.'s Ch., 46; Beau v. Valle, 2 Mo., 103; Jarvis v. § 1015. (2) Where the original contract was in writing, though not by law required so to be, the new contract may be evidenced in any way which establishes it according to the principles of the court. Thus a contract, though under seal, may in the contemplation of the court of equity be waived by a course of conduct from whence the presumption of a new contract in substitution arises. "In ordinary partnerships," said Lord Eldon, "nothing is more clear than this, that although partners enter into a written agreement, stating the term upon which the joint concern is to be carried on, yet if there be a long course of dealing, or a course of dealing not long, but still so long as to demonstrate that they have all agreed to change the terms of the original written agreement, they may be held to have changed those terms by conduct."(x) And accordingly, in another case, where a contract for a partnership was decreed to be specifically executed, the court directed an inquiry whether any and what variations had been made in the (x) Const v. Harris. T. & R., 496, 523; Ged. des v. Wallace, 2 Bli., 270, 297; Jackson v. Sedgwick, 1 Sw, 460, per Lord Langdale M. Smith, 1 Hoff.'s Ch., 470; Givens v. Calder, 2 Dessau.'s Eq., 171, 190; Wills v Stradling, 3 Ves.. 381; Gregory v. Mighell, 18 id., 333: Thompson v. Scott, 1 McCord's Ch., 39; Cole v. White, 1 Bro., 409; Morphett v. Jones, 1 Swanst., 179; Foot v. Mitchell, 1 B. & B., 400; Harris v. Knickerbocker, 5 Wend., 638; Aitkin v. Young, 12 Pa. St., 15; Cristy v. Barnhart, 14 id., 260; Carroll v. Cox, 15 Iowa, 455; Moore v. Higly, 45 Ind., 487. Lord Manners, in Kine v. Balfe, 2 Ball & Beatty, 343, said: "Whether possession be an unequivocal act amounting to part performance must depend upon the transaction itself. If it be distinctly referred to, the contract alleged in the pleadings, I think no case has denied that it is a part performance. The defendant is protected from hability as a trespasser, and the plaintiff is disabled from dealing with any other person." There was a parol agreement for the sale of a mining claim, under which the vendee took possession, paying a part of the agreed price with the proceeds of the mine, all of which he appropriated to his own use. Held, sufficient to take the contract out of the operation of the statute of frauds. Taterm v. Brooker, 51 Mo., 148. Length of time of possession important.] Long continued possession, with the acquiescence of the vendor, will be regarded as a strong circumstance against permitting the statute to be pleaded. Blatchford v. Kirkpatrick, 6 Beav., 232; Bonier v. Caldwell, 8 Mich., 463; Rhea v. Jordan, 28 Gratt., 678; Lester v. Lester, id., 737; Miranville v. Silverthorn, 1 Grant (Pa.), 410; Palmer v. Richardson, 3 Strobh.'s Eq., 16. Possession must be under the parol contract sought to be enforced and none other.] In order that a parol contract may be taken out of the operation of the statute of frauds, where possession has been given, the possession must have been surrendered under the very contract and none other. A tenant in possession, purchasing, would not come within the rule, he would have entered under another agreement. Danforth v. Laney, 28 Ala., 274; Tate v. Jones, 16 Fla., 216; Charpiot v. Lingerson, 25 Mo., 63; Cole v. Potts, 10 N. J. Eq., 67; Litton v. Shipp, 65 Mo., 293; Knoll v. Harvey, 19 Wis., 99; Davis v. Moore, 9 Rich., 215; Mohana v. Blunt, 20 Ia., 142; Rosenthall v. Freeburgler, 26 Md., 75. original contract by the consent of the partners, and directed the deed to be settled by the master having regard to such variations. (y) § 1016. (3) Where the original contract is by law required to be in writing, the new one must be in writing also, if the plaintiff insists on it as part of his case; so that, for instance, where the relation of landlord and tenant is constituted by writing, a contract for an abatement of rent set up by the plaintiff must be in writing also. (z)' From the principles of the court, however, in regard to part performance, an exception naturally arises, as the new contract may in this, as in any other case, be by parol, if supported by acts of part performance. Thus, for example, where W. leased to N. a house for eleven years, and was to allow £20 for repairs, and this contract was signed and sealed by the parties, and N., finding that the repairs of the house would cost more than £20, laid out a further sum, in consequence of W.'s having promised to enlarge the term, but without mentioning for what term: Jekyll, M. R., carried the parol contract into effect, on the ground that it was a new contract, and that the laying out of money was a part performance on the one part, which made it needful to execute the parol contract on the other. (a) § 1017. But where the new contract is relied on only as an extinguishment of the old one, the mere fact that it is not in writing, and so could not be put in suit, seems to be no ground for denying its effect in rescinding the original contract. The statute of frauds does not make the parol contract void, but merely prevents an action upon it; and it does not seem to be necessary to the extinction of one contract by another that the second contract could be actively enforced. The point has never, it is believed, been (y) England v. Curling, 8 Beav., 129. (*) O'Connor v. Spaight, 1 Sch. & Lef., 305. (a) 5 Vin. Abr., 522, pl. 38. 1 So where the subject matter of an agreement was the sale of land, a parol promise made by the vendee, that he would take no advantage of a delay of performance beyond the time fixed, was not deemed a waiver of the party's right to recover a stipulated sum as liquidated damages for not performing on the day, such promise being void by the statute of frauds, and, therefore, ineapable of affecting the previous contract. Hasbrouck v. Tappen, 15 Jolins., 200. This doctrine is equally well established in this country. Walker v. Wha ley, 2 Humph., 119; England v. Jackson, 3 id., 584; McCorkle v. Brown, 9 Sm. & Marsh., 167. matter of decision. (b) But in point of principle it seems to stand on the same footing as a good simple agreement to rescind. 3. An agreement with a third person. § 1018. An agreement between the original parties and a third person, by which the third person takes the place of one of the original contractors, creates a new contract on the old terms between the new parties and rescinds the original contract. § 1019. So where M. agreed with a company to take certain shares, and no payment was made by M., so that according to the contention of the liquidator of the company he had no right to the shares: and M. then transferred the shares to G., and G. was registered: it was held that, assuming the contention to be correct, the contract with M. was restricting in fieri, and the transfer to which the company was a party constituted a new contract to take the same shares between the company and G., and that the old contract with M. was discharged by the new contract with G.(c) § 1020. So again where A. sold shares to B., and B. sold them to C., and A. executed a deed of transfer to C., which C. refused to register; A. brought a bill for specific performance against B., but it was held that A., having assigned the shares to C., had determined the privity of contract with B., and that he could not make a title to the shares. The main question in the case was whether C. was merely the nominee of B., or there was a substantive contract between A. and C.: the latter was the view taken under the circumstances. (d) § 1021. In the chapter on contracts for the sale of shares, (e) it will be seen that questions of novation by the introduction of a third person arises upon sales on the stock exchange. The reader is referred to that chapter for their bearing on the question of novation. § 1022. There are two other classes of contracts in respect of which the question of novation has frequently (b) See Vinnius, Commen. in Inst. lib. iii. tit. 30. As to a parol contract at common law to vary (in effect) the terms of a deed, see Nash v. Armstrong, 10 C. B. N. S., 259. (c) Morton's case, L. R. 16 Eq., 104. Cf. Ex parte Beresford, 3 Mac. & G., 197; Moore v. Marrable, L. R. 1 Ch., 217. (d) Shaw v. Fisher, 5 De G. M. & G., 596; Holden v. Hayn, 1 Mer., 47; Hall v. Laver, 3 Y. & C. Ex., 191; Stanley v. Chester and Birkenhead Railway Co., 9 Sim., 264; S. C. 3 My. & C.r, 773; supra, § 151. (e) Infra, Part VI., chap. 1, § 1472, et seq. arisen the first relating to continued dealings between A. and one set of partners and A. and another set of partners successors in trade to the former; and the second relating to the dealings of a person insured in one company and continuing to make payments to another with which the first had amalgamated, or to which it had assigned its business. The full discussion of these classes of cases would be too remote from the subject of these pages to be here proper. 4. Exercise of a power to rescind reserved by the contract. § 1023. Generally speaking, one party to a contract cannot rescind it, except by consent of the other party, but this general principle is liable to exceptions. The first that falls to be noticed is where the contract reserves to one or both of the contracting parties a power in certain specified circumstances to rescind the contract. (f) Such stipulations are frequent in contracts for the sale of land. It will be desirable briefly to consider these stipulations. § 1024. When a contract stipulates that on the happening of a certain event it shall be void, the construction put upon it by the courts generally is, that it may on this event be rescinded by the party injured by such event. Thus a proviso that in case the vendor of an estate cannot deduce a good title, or the purchaser shall not pay the money at the appointed day, the contract shall be void, has been held to mean that in the former case the purchaser, and in the latter the vendor, may avoid the contract, and not that the contract is utterly void. (g) § 1025. A right to rescind a contract on the non-performance of an act, which act it is the duty of the party invested with the right of rescission to perform if he can, will not give such party a right to refuse to perform his part of the contract, but will be held to apply where the act cannot be done thus where there is a condition that, if any objection shall not be removed within a limited time, the vendor shall be at liberty to annul the contract, the vendor is not entitled to neglect to remove any objection, and then, on the strength (f) E. g. Marsden v. Sambell, 28 W. R, 952. (g) Roberts v. Wyatt, 2 Taunt., 268. See, also, Doe d. Nash v. Birch, 1 M. & W., 402; Hyde v. Watts, 12 M. & W., 254. |