BUNN, District Judge
(after stating the facts as above). The principal questions discussed by counsel are: (1) Whether the evidence shows such a contract for an interest in real estate, followed by part performance upon the part of complainants in the original bill, as to take the case out of the statute of frauds, and entitle the complainants to a specific performance. (2) Is the action for specific performance barred by the judgment in the forcible entry and detain-er suit? (3) Allowing that the complainants are entitled to have the contract for a five-years lease specifically performed, are they now, after the decree is entered as prayed for by them, entitled in equity to a decree for the payment of the value of the improvements put upon the premises by them, as damages in lieu of specific performance? There are some other minor questions presented by the record, but we think the case may be properly disposed of upon a consideration of these.
Upon the first and principal question, we are of opinion that the circuit court properly overruled the report of the master that the case of the complainants was barred by the statute of frauds, and that no case was made for a specific performance. On the contrary, we are of opinion that the evidence brings the case fairly within the leading cases and the great weight of authority on this subject, for specific performance of the agreement. AH' the requisites of süch a case are fairly complied with. The weight'of testimony shows an. [175]*175oral contract for the execution and delivery of a lease for five years from January 1,1891, of premises described with sufficient certainty, including all the terms of the contract, and the payment of specific rent. That it was the express understanding that such a lease should be executed and delivered appears from the testimony; that complainants were to enter into possession and build a valuable plant with machinery for the manufacture of ice, wifh the privilege of ingress and egress to and from the rear of the premises, they to pay all taxes and water rents, and |50 per month rent in advance, during the continuance of a five-years term. That Purcell so understood the contract up to the time he conceived the idea that an oral lease for five years was not binding, and that he might sell the lot, plant, and all to other parties, is also quite evident. His after-denial that the terms of any lease were agreed upon seems to be the result of his legal conception that a lease for five years without writing was void within the statute of frauds. It is clear from the evidence that he caused a lease for five years to be executed, containing all the requirements of the oral agreement, except that for ingress and egress and for a second term of five years upon a revaluation; and, upon complainants’ refusal to accept the lease tendered, he promised to have others made, but never did. It is also clear that he permitted them to take possession, and that the improvements, costing about ?30,000, were put on with his daily knowledge and implied consent, and that he even assisted in making the improvements for complainants. How little the case lacks of coming within the acknowledged rule for specific performance of an oral contraed for an interest in land, accompanied by an entry into possession and the erection of valuable improvements with the grantor’s knowledge and permission, will be seen by a brief reference to some of the many cases on this subject. To refuse relief in such a case would be to encourage fraud, which the statute requiring a contract for the sale of an interest in land for a longer time than one year to be in writing was passed to prevent.
The general rule is laid down by Story, as follows:
“In tlie next place, courts of equity will enforce specific performance of a contract within the statute where the parol agreement has been partly carried into execution. The distinct ground upon which courts of equity interfere in cases of this sort is that otherwise one party would be able to practice a fraud upon the other, and it could never be the intention of the statute to enable any party to commit a fraud with impunity. Indeed, fraud in all cases constitutes an answer to the most solemn acts and conveyances, and the objects of the statute are promoted instead of being obstructed by such a jurisdiction for discovery and relief.”
The rule is vrell laid down very recently by the United States supreme court in Riggles v. Erney, 154 U. S. 244, 14 Sup. Ct. 1083, as follows:
“Indeed, the rule is too well settled to require further citation of authorities that, if the parol agreement be clearly and satisfactorily proven, and the plaintiff, relying upon such agreement and the promise of the defendant to perform his part, has done acts in part performance of such agreement to the knowledge of the defendant, — acts which have so altered the relations •of the parties as to prevent their restoration to their former condition, — it
[176]*176wóuld be a virtual fraud to allow tbe defendant to interpose tbe statute as a defense, and thus to secure to bimself tbe benefit of wbat bas been done in part performance. It must appear, however, that tbe acts done by tbe plaintiff were done in pursuance of tbe contract, and for tbe purpose of carrying it into execution, and with tbe consent or knowledge of tbe other party. While acts done prior to tbe contract or preparatory thereto, such as delivering abstracts of title, measuring land, drawing up deeds, etc., are not regarded as sufficient part performance, it is otherwise with such acts as taking open possession of tbe land sold, or making permanent or valuable improvements thereon, or doing other acts in relation to tbe land manifestly inconsistent with any' other theory than that of carrying out tbe parol undertaking.”
The same doctrine had previously been laid down in Railway Co. v. McAlpine, 129 U. S. 305, 9 Sup. Ct. 286.
The same rule has been often declared by the supreme court of Illinois, where the premises are situated, as may be seen- from the following adjudged cases: Bright v. Bright, 41 Ill. 97; Kurtz v. Hibner, 55 Ill. 514; McDowell v. Lucas, 97 Ill. 489; Langston v. Bates, 84 Ill. 524; Bohanan v. Bohanan, 96 Ill. 591; Smith v. Yocum, 110 Ill. 142; Irwin v. Dyke, 114 Ill. 302, 1 N. E. 913; Morrison v. Herrick, 130 Ill. 631, 22 N. E. 537.
The principle is well stated by Lord Cottingham in Mundy v. Jolliffe, 5 Mylne & C. 167-177, as follows:
“Courts of equity exercise their jurisdiction in decreeing specific performance of'verbal agreements when there has been part performance, for the purpose of preventing the great injustice which would arise from permitting the party to escape from the engagements he has entered into upon the ground of the statute of frauds, after the other party to the contract has, upon the faith of such engagement, expended his money, or otherwise acted in execution of the agreement. Under such circumstances, the court will struggle to prevent such injustice from being effected; and with that object, it has on the hearing, where the plaintiff has failed to establish the- precise claims of the agreement, endeavored to collect, if it can, what the terms of it really were.”
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BUNN, District Judge
(after stating the facts as above). The principal questions discussed by counsel are: (1) Whether the evidence shows such a contract for an interest in real estate, followed by part performance upon the part of complainants in the original bill, as to take the case out of the statute of frauds, and entitle the complainants to a specific performance. (2) Is the action for specific performance barred by the judgment in the forcible entry and detain-er suit? (3) Allowing that the complainants are entitled to have the contract for a five-years lease specifically performed, are they now, after the decree is entered as prayed for by them, entitled in equity to a decree for the payment of the value of the improvements put upon the premises by them, as damages in lieu of specific performance? There are some other minor questions presented by the record, but we think the case may be properly disposed of upon a consideration of these.
Upon the first and principal question, we are of opinion that the circuit court properly overruled the report of the master that the case of the complainants was barred by the statute of frauds, and that no case was made for a specific performance. On the contrary, we are of opinion that the evidence brings the case fairly within the leading cases and the great weight of authority on this subject, for specific performance of the agreement. AH' the requisites of süch a case are fairly complied with. The weight'of testimony shows an. [175]*175oral contract for the execution and delivery of a lease for five years from January 1,1891, of premises described with sufficient certainty, including all the terms of the contract, and the payment of specific rent. That it was the express understanding that such a lease should be executed and delivered appears from the testimony; that complainants were to enter into possession and build a valuable plant with machinery for the manufacture of ice, wifh the privilege of ingress and egress to and from the rear of the premises, they to pay all taxes and water rents, and |50 per month rent in advance, during the continuance of a five-years term. That Purcell so understood the contract up to the time he conceived the idea that an oral lease for five years was not binding, and that he might sell the lot, plant, and all to other parties, is also quite evident. His after-denial that the terms of any lease were agreed upon seems to be the result of his legal conception that a lease for five years without writing was void within the statute of frauds. It is clear from the evidence that he caused a lease for five years to be executed, containing all the requirements of the oral agreement, except that for ingress and egress and for a second term of five years upon a revaluation; and, upon complainants’ refusal to accept the lease tendered, he promised to have others made, but never did. It is also clear that he permitted them to take possession, and that the improvements, costing about ?30,000, were put on with his daily knowledge and implied consent, and that he even assisted in making the improvements for complainants. How little the case lacks of coming within the acknowledged rule for specific performance of an oral contraed for an interest in land, accompanied by an entry into possession and the erection of valuable improvements with the grantor’s knowledge and permission, will be seen by a brief reference to some of the many cases on this subject. To refuse relief in such a case would be to encourage fraud, which the statute requiring a contract for the sale of an interest in land for a longer time than one year to be in writing was passed to prevent.
The general rule is laid down by Story, as follows:
“In tlie next place, courts of equity will enforce specific performance of a contract within the statute where the parol agreement has been partly carried into execution. The distinct ground upon which courts of equity interfere in cases of this sort is that otherwise one party would be able to practice a fraud upon the other, and it could never be the intention of the statute to enable any party to commit a fraud with impunity. Indeed, fraud in all cases constitutes an answer to the most solemn acts and conveyances, and the objects of the statute are promoted instead of being obstructed by such a jurisdiction for discovery and relief.”
The rule is vrell laid down very recently by the United States supreme court in Riggles v. Erney, 154 U. S. 244, 14 Sup. Ct. 1083, as follows:
“Indeed, the rule is too well settled to require further citation of authorities that, if the parol agreement be clearly and satisfactorily proven, and the plaintiff, relying upon such agreement and the promise of the defendant to perform his part, has done acts in part performance of such agreement to the knowledge of the defendant, — acts which have so altered the relations •of the parties as to prevent their restoration to their former condition, — it
[176]*176wóuld be a virtual fraud to allow tbe defendant to interpose tbe statute as a defense, and thus to secure to bimself tbe benefit of wbat bas been done in part performance. It must appear, however, that tbe acts done by tbe plaintiff were done in pursuance of tbe contract, and for tbe purpose of carrying it into execution, and with tbe consent or knowledge of tbe other party. While acts done prior to tbe contract or preparatory thereto, such as delivering abstracts of title, measuring land, drawing up deeds, etc., are not regarded as sufficient part performance, it is otherwise with such acts as taking open possession of tbe land sold, or making permanent or valuable improvements thereon, or doing other acts in relation to tbe land manifestly inconsistent with any' other theory than that of carrying out tbe parol undertaking.”
The same doctrine had previously been laid down in Railway Co. v. McAlpine, 129 U. S. 305, 9 Sup. Ct. 286.
The same rule has been often declared by the supreme court of Illinois, where the premises are situated, as may be seen- from the following adjudged cases: Bright v. Bright, 41 Ill. 97; Kurtz v. Hibner, 55 Ill. 514; McDowell v. Lucas, 97 Ill. 489; Langston v. Bates, 84 Ill. 524; Bohanan v. Bohanan, 96 Ill. 591; Smith v. Yocum, 110 Ill. 142; Irwin v. Dyke, 114 Ill. 302, 1 N. E. 913; Morrison v. Herrick, 130 Ill. 631, 22 N. E. 537.
The principle is well stated by Lord Cottingham in Mundy v. Jolliffe, 5 Mylne & C. 167-177, as follows:
“Courts of equity exercise their jurisdiction in decreeing specific performance of'verbal agreements when there has been part performance, for the purpose of preventing the great injustice which would arise from permitting the party to escape from the engagements he has entered into upon the ground of the statute of frauds, after the other party to the contract has, upon the faith of such engagement, expended his money, or otherwise acted in execution of the agreement. Under such circumstances, the court will struggle to prevent such injustice from being effected; and with that object, it has on the hearing, where the plaintiff has failed to establish the- precise claims of the agreement, endeavored to collect, if it can, what the terms of it really were.”
Tbe supposition that a party would enter into possession of a vacant lot, and expend so large a sum of money in making permanent improvements, under a letting from month to month, is not to be indulged in, unless the proofs and circumstahces make it necessary; but such improvements should be referred to an agreement for a longer term', if such agreement can be fairly found from the evidence.
This principle is laid down by Woodfall in his work on Landlord and Tenant (1st Am. Ed. 1890, vol. 1, pp. 165-167), as follows:
“The laying out of considerable sums of money by a person who enters under an agreement for a long term is rationally to be referred to such agreement, rather than to the mere tenancy at will, to be implied from such entry. After such expenses have been incurred on the faith of a lease agreed to be granted, it would be fraudulent and inequitable for a landlord to refuse to grant such lease.”
We think this language not inapplicable to the case at the bar.
-2. It is contended by Purcell and Puller that the judgment in the forcible entry and detainer proceedings, and the refusal of the court to open that judgment, constitute a bar to this suit. But this contention cannot be maintained. The difficulty with it is the issues are entirely different. The issues here not only were not, but could [177]*177not have been, litigated in that action. That was an action at law to terminate the lease, not a five-year lease, but a letting from month to month, and recover possession for nonpayment of the monthly rent. The court treated the lease only as it existed at law, holding it to be tantamount to a letting from month to month, and properly refused to consider any larger equitable rights which the artificial ice company or Trumbull and Olieveuton might have in the premises by reason of the contract with Purcell, expressly referring them to this suit already pending on the chancery side of tiie court for the ascertainment and protection of those rights. The judgment in that case was conclusive of all the issues depending therein. Those issues were whether the monthly rent had been paid when due, and, if not, whether the plain!itls were not entitled to terminate the lease as it existed at law and to recover possession for such nonpayment. The issues here are quite different, involving, as they do, questions of strictly equitable jurisdiction. When the suit for forcible entry was commenced, two courses were open to the defendants. One was to pay the rent overdue, and stop the proceedings. The other was to apply to the court where this suit in equity for a specific performance was already pending, for an injunctional order staying jjroceedings in the case at law until the rights of the parties in equity should be determined. Nothing of this sort was done, but the defendants, after serving notice of appearance, made no defense, and judgment went against them by default. But it is quite clear that that judgment is not a bar to this suit. It terminated the lease, as the court held it to be a letting from month to month, and put the plaintiffs in possession; but it adjudged nothing in regard to the equitable right of the defendants to a specific performance, which they had prayed for in the suit already begun on the chancery side of the court. The rent due was afterwards tendered by Trumbull and Cheverton, and a demand for possession made, which were both refused.
' 3. The contention of the complainants that: they are entitled to a decree for the value of the plant as damages in lieu of specific performance is untenable, and must be denied. They get by the decree what they prayed for, and, we think, all they are entitled to receive under the evidence.
The evidence on the question of damages resulting from user and deterioration is quite conflicting, the witnesses disagreeing very much in their estimates; but we cannot say that the amounts reported by the master and adopted by the court are not fairly sustained by the weight of evidence. But we think that these damages, covering the entire period, should only have been assessed against Purcell and Puller. They should be held responsible in equity from being the actuating cause of the complainants being denied their equitable rights under the contract, and being put out of the possession to which they were equitably entitled thereunder. But we are unable to see how the defendant the People’s Pure Ice Company, being a corporation, can be held for damages accruing before it was organized or went into possession of the plant. It would be [178]*178liable, no doubt, for damages accruing after it went into possession, but these, not having been separately assessed by the master, cannot now be assessed without a further reference.
The decree of the circuit court will be affirmed in all things except as to the decree for damages against the People’s Pure Ice Company, and as to those damages it will be reversed, with leave to the complainants, if they so choose, to take a further reference to a master to ascertain the proper proportion of the damages sustained for the time that company was in possession, in which case, upon the return of the master’s report and confirmation thereof, a further decree may be entered against the People’s Pure Ice Company for the damages so assessed.
The foregoing opinion was afterwards modified as appears below:
(November 13, 1895.)
BUNN, District Judge.
In this case there is a motion by complainants to modify the decree in respect to damages against the People’s Pure Ice Company, and also so as to require a further reference to ascertain damages to the plant accruing since the decree was entered. We think the decree should be modified in the first particular named, and the motion overruled as to the last.
We think the entire damages assessed for use and occupation covering the period from May 11, 1892, when Fuller and Purcell went into possession, up to Slay 23, 1894, the day after the entry of the decree, should only have been assessed against Fuller and Purcell, and not against the People’s Pure Ice Company, which did not go into possession until August 28, 1.892, — 3 months and 17 days after the termination of the forcible entry and detainer action, when Fuller and Purcell took the plant. But, as the basis of ■estimating these damages was the interest upon the assessed valuation of the plant, there is no difficulty in determining from data contained in the record the proportion of these damages properly' chargeable to the People’s Pure Ice Company.
The damages for use and occupation assessed by the master and allowed by the court were determined by reckoning the interest at 5 per cent, upon a valuation of $20,000 from May 11, 1892, to May 23, 1894, a period of 2 years and 12 days, and amounting to' the sum of $2,033.33. The People’s Pure Ice Company was organized on June 28, 1892, for the purpose of running the plant, but did not take an assignment of the lease or go into possession until August 28th, and so should not be chargeable for use during that interval. The interest upon that sum at 5 per cent, from May 11th to August 28th, — 3 months and 17 days, — amounting to $297.22, being deducted from $2,033.33; leaves $1,736.11 as the proper amount with which the People’s Pure Ice Company should be chargeable.
As to the $2,500 decreed against all the defendants on account of damages from deterioration, there is no difficulty in affirming the decree as to the People’s Pure Ice Company as well as the other ■defendants, because those damages, according to the master’s report and all the testimony, arose from the shutting down of the [179]*179plant on or about November 1, 1892, and allowing it to remain unused for a period of some 18 months, up to May 22, 1894. There is no evidence tending to show that any part of these damages accrued between May 11 and August 28, 1892, before the People’s Pure Ice Company went into possession.
The decree will be affirmed in all things except as to damages for use and occupation assessed against the People’s Pure Ice Company from May 11 to August 28, 1892, and in respect to these the decree as against the People’s Pure Ice Company should be modified by deducting the sum of $297.22 from the aggregate sum allowed by the decree for damages.
The motion for a further reference to a master to ascertain damages sustained to the plant since the entry of the decree will be overruled. Supposing that might be done in any case (a question we do not determine), the decree in this case gave the complainants the right to the possession. The bond given on appeal was not a supersedeas bond, but only for costs; and, if complainants have not taken possession, it is only because they did not wish to do so.