¶1By the Court,
¶2A parol license to erect a dam upon another’s land, or to convey water from a stream running through the land of another, for the purpose of erecting and conducting a flouring-mill, is, in our opinion, irrevocable after the party to whom the license is given has executed it by erecting the mill, or otherwise expended his money upon the faith of the license.
¶3This principle is very clearly stated in Rerick v. Kern (14 Serg. & Rawle, 267), where the court held that a parol license, given without consideration, to use the water of a stream for a saw-mill, in consequence of which the licensee goes to the expense of erecting a mill, the license cannot be revoked at the pleasure of the licensor, and that the licensee could maintain an action against the licensor for a diversion of the water to his injury. Gibson, J., in delivering the opinion of the court, said: “A license maybe-come an agreement on valuable consideration, as, where the enjoyment of it must necessarily be preceded by the expenditure of money; and when the grantee has made improve*285meuts or invested capital in consequence of it lie lias become a purchaser for a valuable consideration. Such a grant is a direct encouragement to expend money, and it would be against all conscience to annul it as soon as the benefit expected from the expenditure is beginning to be perceived.” (2 Am. Lead. Cases, 734.) The principle that expending money or labor in consequence of a license to divert a water-course, or use a water-power, in a particular way, has the effect of turning such a license into an agreement that will be enforced in equity, has been frequently announced by the courts. In all such cases the execution of the parol license supplies the place of a writing, and takes the case out of the statute of frauds. (Woodbury v. Parshley, 7 N. H. 237; Snowden v. Wilas, 19 Ind. 14; Stephens v. Benson, Id. 369; Lane v. Miller et al., 27 Ind. 537; The Raritan Water Power Co. v. Vegthe, 21 N. J. Eq., 463; Rhodes v. Otis, 33 Ala. 578; Campbell v. McCoy et al., 31 Penn. 264; Prince v. Case, 2 Am. Lead. Cases, 760-1; Ameriscoggin Bridge v. Bragg, 11 N. H. 108.)
¶4The rule applicable to such cases is also acknowledged in cases where a parol license had been given to erect party Avails. (Wickersham v. Orr, 9 Iowa, 259; Russell v. Hubbard et al., 59 Ill. 340.)
¶5There are several very respectable authorities which hold a contrary doctrine, but we think the rule as announced in the authorities Ave have cited is founded in better reason, and fully accords Avitli our vieAvs in relation to this subject.
¶6There was some evidence admitted without objection which tended to prove an executed parol license. Respondent claims that the facts necessary to create a contract or constitute an equitable estoppel were not specially pleaded, and that no evidence of this character ought to have been admitted. This objection does not appear to have been made in the court beloAv, and it is therefore unnecessary to decide the question as to the sufficiency of the pleadings. The plaintiffs will, if they so desire, be alloAved, upon proper motion, to amend their complaint, so as to avoid any objection of this character upon another trial.
¶7As the testimony in this case tended to prove that plaint*286iffs were induced to build and had erected a flouring-mill, and constructed a ditch, relying upon a parol license given by the defendant and others to erect a dam and divert the waters of the Walker river from the natural channel of said stream, for the purpose of operating said mill, and that defendant bad, by digging a deep cut across bis own land, diverted the water of said stream away from the plaintiffs’ dam, to their injury, it follows that the court erred in granting a nonsuit.
¶8The judgment of the district court is reversed and cause remanded for a new trial.