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14. An oral agreement to sell personal ployment of a broker may constitute a suftiproperty does not come within the provision cient note or memorandum to satisfy section of this subdivision, and need not be in writ- 1624 of the Civil Code.—McCartney v. Clover ing.-Deyoe v. Paonessa, 26 Cal. App. 397, 147 Valley Land & Stock Co., 232 Fed. 697. Pac. 100.

24. -Defenses.--The defendant in an 15. An

agreement to pay a broker a action for broker's services is in no position commission for the sale of personal property to avail himself of the point that the descripis not invalid under subdivision 6 of section tion of the property for the sale of which 1624 of the Civil Code because not in writing, the plaintiff claimed compensation, contained by reason of the fact that the seller accepts in the contract, was insufficient under the real property in exchange therefor instead statute of frauds, if the statute is not speof money.--Deyoe v. Paonessa, 26 Cal. App. cially pleaded in the answer and the contract 397, 147 Pac. 100.

not denied, but, on the contrary, set up as 16. A written agreement to pay a real the contract entered into.-Healy v. Obear, estate broker a certain sum of money for 29 Cal. App. 696, 157 Pac. 569. services in effecting an exchange of real 23. -Purpose of.—This provision was property executed after the full performance only designed to protect owners of real esof the services, but before the exchange was tate against unfounded claims of brokers, fully consummated, is valid under the statute and does not extend to agreements between of frauds.—Carrington v. Smithers, 26 Cal. brokers to co-operate in making sales for App. 460, 147 Pac. 225.

a share of the commissions.-Hellings v. 17. Where the memorandum was in writ- Wright, 29 Cal. App. 649, 156 Pac, 365; Jening, the fact that it did not specify the kins v. Locke-Paddon Co., 30 Cal. App. 52, commission to be paid did not subject it to 157 Pac. 537; Sellers v. Solway Land Co., 31 the objection that it is void under this sub- Cal. App. 259, 160 Pac. 175. division.-Muncy v. Thompson, 26 Cal. App. 26. -Subdivision 7. This can have no 634, 147 Pac. 1178.

application to a contract which was fully 18. The word "commission" as used in executed before this sub-section was added. the section should be given a broader mean- -Rogers v. Schlotterback, 167 Cal. 35, 138 ing than merely that of a per centum valua- Pac. 728. tion on the services of either agent; and 27. One may make a valid contract with that if it is made to appear that the first another to will property in a specified way, agent, by virtue of whatever understanding and in the event of a breach the promisee he may have with his principal, is to derive has an action for damages. In some cases a definite advantage in the way of a material this, by reason of the circumstances, may profit from the sale or exchange of his be his only remedy, for a resort to any principal's property, and that such agent equitable remedy can be had only where does derive such advantage through the the circumstances are such as to make the co-operation and services of a second agent, case one within the well-settled principles as the result of an oral agreement between relative to the proper exercise of equitable them, the former must account to the latter jurisdiction.--Morrison v. Land, 169 Cal. 580, therefor. Under such circumstances this 147 Pac. 259. section has application. — Jenkins V.

28. An oral agreement to pay a specific Locke-Paddon Co., 30 Cal. App. 52, 157 Pac. sum of money in consideration of furnishing 537.

the promisor a regular, permanent and es19. A purchaser ready, able and willing tablished home during the term of his natto buy the property is produced within the ural life is an agreement which, as to him, meaning of a written authorization when one is not by its terms to be performed within is found who was ready, willing and able to his lifetime, but immediately after his death, buy the property for any sum up to or in and is, therefore, invalid under subdivision 7 excess of the net amount specified.—Daniel of section 1624 of the Civil Code and the v. Calkins, 31 Cal. App. 514, 160 Pac. 1082. same subdivision of section 1973 of the Code

20. When an agent's authorization is writ- of Civil Procedure.--Hagan v. McNary, 170 ten, the amount of his compensation in the Cal. 141, 148 Pac. 937. event of a sale may be agreed upon orally.-- 29. This is inapplicable to a contract to Daniel v. Calkins, 31 Cal. App. 514, 160 Pac. dispose of property in a particular way rest1082.

ing in parol where it was executed by the 21. A contract by which one party agrees promisee prior to the enactment of this subto furnish another with the name of a person division.-Monsen v. Monsen, 174 Cal. 97, 162 who may purchase his property in considera- Pac. 90. tion of which the latter agrees to pay the former a commission comes within this sub

8 1625. division.--Cram v. McNeil, 32 Cal. App. 101, 1. Party bound by writing.-In signing a 162 Pac. 140.

document the law requires one to exercise 22. Section 1624 of the Civil Code does the care and diligence of a prudent business not require any formal contract of employ- man; and if he is unable to read the instrument; all that is necessary is, that the fact ment, it becomes his duty to procure some of employment be expressed in writing, reliable person to read it to him before signsigned by the party to be charged or by his ing. If he does not do so, he is bound by agent.--McCartney v. Clover Valley Land & the terms of the writing.–Schmidt v. Bekins Stock Co., 232 Fed. 697.

Van & Storage Co., 27 Cal. App. 667, 155 Pac. 23. Correspondence relating to the

647.

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$ 1636.

table Life Assur. Soc., 30 Cal. App. 209, 157

Pac. 630. 1. Construction of contract. — - Whether a

6. Contracts between real estate agents contract is in any of its terms or provisions

and owners of real estate are to be conambiguous or uncertain is a matter of de

strued so as not to defeat the objects of the termination in the first instance by the trial

contract when such construction is reasoncourt; and if the question is not disposed of by the trial court, the appellate court

ably deducible from their terms.-Daniel v. will not in the first instance undertake to

Calkins, 31 Cal. App. 514, 160 Pac. 1082. construe the contract.-Barlow v. Frink, 171 Cal. 165, 152 Pac. 290.

§ 1639. 2. Decisions the interpretation of

1. Construction of written contract-Law written instruments have but limited value

of land part of.-The settled law of the land when applied to the construction of docu

at the time contract is made becomes ments embodying different language.

To a

a part of it and must be read into it.-Weingreat extent each writing must be viewed

reich Estate Co. v. Johnston, 28 Cal. App. 144, by itself, and the intent of the parties must

151 Pac. 667. be ascertained from a study of the particular terms employed, read in the light of the

8 1641. underlying purpose of the transaction and 1. Construction of contract-Every part the circumstances under which it was made. to be given effect.-All the parts of a con-Estate of Whitney, 171 Cal. 750, 154 Pac. tract must be read together and given effect, 855.

if possible.—McCampbell V. Obear, 27 Cal. 3. In the construction of any written in- App. 97, 148 Pac. 942. strument, whether it be a constitution, a 2. Every provision, clause, and word shall statute or a contract, the most important be taken into consideration in ascertaining duty of the court is directed to discovering the meaning of the party, whether words the true meaning of the instrument.

Its

of grant, of description, or words of qualiendeavor is directed first to attaining an fication, restraint, exception, or explanation, understanding of the purpose and object of and every word shall be presumed to have the writing, and next to the giving to that such force and effect as it can have.- East purpose and object the fullest expression San Mateo Land Co. v. Southern Pac. R. Co., compatible with the meaning of the lan- 30 Cal. App. 223, 157 Pac. 634. guage through which that purpose and ob- 3. The scope, purpose and effect of a lease ject find expression. Words, phrases and must be determined from the instrument as a sentences, therefore, are construed in con- whole rather than by a resort to any inditemplation of these fundamental purposes vidual clause thereof, and, so construed, it and objects, and when any doubt of their must be given such an interpretation as will precise meaning is found to exist, aid in make it effective in conformity with the arriving at that meaning is drawn from the intention of the parties.—Barron Estate Co. general rules and principles governing the v. Waterman, 32 Cal. App. 171, 162 Pac. 410. construction of such doubtful language.Perry v. Gross, 172 Cal. 468, 156 Pac, 1031.

$ 1642. 4. A contract for a broker's commission 1. Construction of contract-Several confor effecting an exchange of properties, tracts construed together, when.-Actual anwhich as to the payment of the commission nexation is not essential to a merger by provides that the time of payment should be reference of separately executed written inextended until a certain potato crop belong- struments.—Beedy v. San Mateo Hotel Co., ing to the owner of the properties has been 27 Cal. App. 653, 150 Pac. 810. harvested, and that when the crop is sold 2. A written agreement may, by reference the proceeds to the amount of sixteen hun

expressly made thereto, incorporate other dred and fifty dollars is to be turned over written agreements, and when such referto the broker "in liquidation of the indebt- ence is made the original agreement and edness,” constitutes merely a limitation upon those referred to must be considered and the amount of money to be paid to the broker construed as a whole.-Beedy v. San Mateo from the proceeds of the crop, and not that Hotel Co., 27 Cal. App. 653, 150 Pac. 810. the proceeds of the crop should be accepted 3. In case a building contract is amended in liquidation of the claim.-Evans v. Hindes, by another agreement which does not en29 Cal. App. 708, 157 Pac. 522.

tirely supersede it, both of the contracts 5. Matters that relate to the preliminary may be construed as a single agreement, question whether a contract has been made and parol evidence is not admissible to strike are in general governed by a fixed law, out a provision in the first contract for paywhich is independent of and can not be ment.--Giberson v. Fink, 28 Cal. App. 25, 151 varied by the intention of the parties. Such Pac. 371. matters include the capacity of the parties 4. Ordinarily the identity of the parties to contract, conditions or restrictions upon to several instruments will be disclosed by the right to contract, and the formal validity a reference to the instruments themselves; of the contract. The governing law, on the but the question as to whether or not sevother hand, with respect to the obligation eral instruments between the same parties of the contract, is, as a general proposition, were contemporaneously executed and independent upon the intention of the parties, tended by the parties thereto to cover a expressed or presumed.-Flittner v. Equi- single transaction, oftentimes can not be

ascertained from an inspection of the instru- contract reduced to writing and executed by ments; consequently, if the intention of the the parties shall have anything added to or parties be either not expressed or doubt- taken away from it by evidence of "surfully expressed, resort may be had

to rounding circumstances," This rule of eviextrinsic evidence which will show the cir- dence is invoked and employed only in cases cumstances under which the several instru- where upon the face of the contract itself ments were made, for the purpose of there is doubt and the evidence is used to ascertaining the intention of the parties con- dispel that doubt, not by showing that the cerning the scope and effect of the several parties meant something other than what instruments.—Torrey y. Shea, 29 Cal. App. they said, but what was meant by what they 313, 155 Pac. 820.

said.-United Iron Works v. Outer Harbor,

D. & W. Co., 168 Cal. 81, 141 Pac, 917. § 1643.

2. Surrounding circumstances. The ad1. Interpretation in favor of contract. mission of evidence touching the circumAs between two permissible constructions, stances surrounding the execution of a conthat which establishes a valid contract shall tract is not injurious, where such evidence be preferred to that which does not.-Wein- merely tends to confirm its proper legal reich Estate Co. v. Johnston, 28 Cal. App. construction.-Provident Gold Min. Co. v. 144, 151 Pac. 667.

Manhattan Securities Co., 168 Cal. 304, 142

Pac. 884. § 1644.

3. Surrounding circumstances are to be 1. Ordinary words to be given usual sig- considered in construing a contract only nificance.-The making of the sale by the when the terms of the agreement leave the owner is not a "ratification" of the sale intention of the parties uncertain. --Salter v. within the meaning of such word in the Ives, 171 Cal. 790, 155 Pac. 84. contract, as the term "ratify" refers to the 4. Contemporaneous or previous transacact of another.-Snook v. Page, 29 Cal. App. tions may be considered in ascertaining the 246, 155 Pac. 107.

sense in which parties to a contract have

used particular terms.--Fee v. McPhee, 31 $ 1645.

Cal. App. 295, 160 Pac. 397. 1. Technical words to be given technical 5. Where a contract is uncertain or not meaning.-Legal terms are to be given their clear as to its purpose and effect, the queslegal meaning unless obviously used in a tion whether the transaction of which it different sense. - - Weinreich Estate Co. v. purports to be the evidence is a sale or a Johnston, 28 Cal. App. 144, 151 Pac. 667. bailment is to be determined from all the

circumstances giving rise to it, and on con8 1646.

flicting evidence a question of fact is pre1. Law of the place.-A contract as to its sented for the jury's determination.-Slama nature, obligation and validity, is governed Tire Protector Co. v. Ritchie, 31 Cal. App. by the law of the state where made, unless 555, 161 Pac. 25. it is performed in another state, in which case it will be governed by the law of the § 1648. state of performance. When it appears that

1. Restriction to subject-Construction.the place of performance was different from the place of making the contract, it is to be

The rule that general words are to be qualiconstrued according to the laws of the place

fied by particular recitals has often been where it is to be performed.-Flittner v.

declared, particularly in cases of releases. Equitable Life Assur. Soc., 30 Cal. App. 209,

The same theory underlies the provision of 157 Pac. 630.

section 1648, Civil Code, that "however broad

may be the terms of a contract, it extends 2. All matters connected with the performance of a

only to those things concerning which it contract are regulated by the law of the place where the contract

appears that the parties intended to con

tract."-Estate of Whitney, 171 Cal. 750, by its terms is to be performed. All matters

154 Pac. 855. bearing upon the execution, the interpretation and the validity of contracts, including the capacity of the parties to contract, are

§ 1649. determined by the law where the contract 1. Interpretation in sense promisor beis made.-Flittner v. Equitable Life Assur. lieved promisee understood.—The acts of the Soc., 30 Cal. App. 209, 157 Pac. 630.

parties to a contract, accruing after the 3. As a general proposition, the capacity contract was made, may be looked to as of parties to contract is to be determined indicating the construction which the parby the law of the place where the contract ties themselves put upon a doubtful clause, is made.-Flittner v. Equitable Life Assur. and as aiding that construction.--Woodard Soc., 30 Cal. App. 209, 157 Pac. 630.

v. Glenwood Lumber Co., 171 Cal. 513, 153

Pac. 951. 8 1647.

2. If the terms of a promise are in any 1. Interpretation of contracts, circum- respect ambiguous or uncertain they must be stances-Construction of section.This sec- interpreted in keeping with the sense in tion and section 1860 of the Code of Civil Pro- which the promisor believed that the promcedure simply enact the common law rule. It isee understood them.-Simen v. Aftergut, is never within their contemplation that a 26 Cal. App. 361, 146 Pac, 1058.

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3. A contract which has been prepared by so later.–Giberson v. Fink, 28 Cal. App. 25, one of the parties only will be construed 151 Pac. 371. in the sense which he supposed the adverse party understood it.-Ruffin v. Becker, 27 § 1659. Cal. App. 163, 148 Pac. 233.

1. Joint and several liability.-A contract

for the construction of a wagon road which $ 1652.

recites that "the parties of the first part" 1. Repugnancies reconciled, how.The re- (not named but described as "settlers" of a pugnancies of a contract must be reconciled, certain school district) agree to pay a if possible, by giving to them such an inter- named person, described as party of the pretation as will make them effective and second part, a certain sum per rod for the at the same time subordinate to the general building of the road, creates a joint and intent and purpose of the contract consid- several liability.—Shelton v. Michael, 31 Cal. ered and construed in its entirety.-Rosen- App. 328, 160 Pac. 578. thal v. Bauer, 30 Cal. App. 251, 157 Pac. 1137.

8 1667.

1. Contracts against publie policy. – A 8 1654.

contract to pay commissions to a broker for 1. Words taken against whom.-Provisions negotiating an exchange of a note for a in an insurance policy are always construed parcel of land is against public policy and as to prevent a forfeiture, if the lan

void, and a promissory note given in conguage will reasonably permit such a con- sideration therefor is consequently invalid, struction.-O'Neill v. Caledonian Ins. Co., 166

where the other party to the exchange, who Cal. 310, 135 Pac. 1121.

also agreed to pay the broker a commission, 2. In presence of repugnancies or un- was without knowledge that the broker was certainties the language of the contract is to to receive a commission from the other be construed most strongly against the party party.—Glenn v. Rice, 174 Cal. — 162 Pac. responsible therefor, who, under such cir- 1020. cumstances, is presumed to be the promisor. 2. A contract must have a lawful purpose; -Simen v. Aftergut, 26 Cal. App. 361, 146 transactions in violation of law can not be Pac. 1058.

made the foundation of a valid contract. 3. In cases of uncertainty, the language Scheeline v. Pezzola, 29 Cal. App. 266, 155 of a contract should be interpreted most Pac. 127. strongly against the party who caused the 3. Contract between a railroad company uncertainty to exist.-Ruffin v. Becker, 27 and an engineer, by which the engineer was Cal. App. 163, 148 Pac. 233; Simen v. Aftergut, to gather information and data as to cost of 26 Cal. App. 361, 146 Pac. 1058.

construction, traffic conditions, etc., and to

embody the results of his investigations in a 8 1657.

report to be used in enlisting capital for the 1. Time of performance.-A written con

carrying out of the enterprise, is not against tract to install a system of automatic sprink

public policy.-Sacramento Valley Elec. R. lers and fire-extinguishers in a box factory

Co. v. Aston, 236 Fed. 698. for a specified sum which contains no provision fixing the time within which the

$ 1668. installation is to be made, requires perform

1. Unlawful contracts - Construction of ance within a reasonable time.-Roughton section.—Section 1668 applies to insurance v. Brookings Lumber & Box Co., 26 Cal. App. policies, inasmuch as "all contracts" must 752, 148 Pac. 539.

necessarily apply to contracts of insurance. 2. A period of two or three months is not But the section does not apply when the an unreasonable time for the installation effect of the clause eliminating fraud as a of such a system, where much of the ma- defense is merely to limit the time within terial for doing the work requires shipment which fraud may be urged as a defense to a from distant parts of the country.-Roughton reasonable time.-Dibble v. Reliance Life v. Brookings Lumber & Box Co., 26 Cal. App. Ins. Co., 170 Cal. 199, 149 Pac. 171. 752, 148 Pac. 539.

2. The rule as to the incontestable char3. Where a building contract contains no acter of such a provision is not changed by provision as to the time within which the section 1668 of the Civil Code, which probuilding shall be completed, the rule is that vides that all contracts that have for their the building shall be completed within a object, directly or indirectly, to exempt any reasonable time, and as to what constitutes one from responsibility for his own fraud, a "reasonable time" depends upon the cir- are against the policy of the law, for the cumstances of the particular case.-Giberson object and effect of such insurance provision v. Fink, 28 Cal. App. 25, 151 Pac. 371.

is not to exempt the insured from the con4. Under such a contract the failure of sequences of his fraud, but to provide a the contractor by seven days in complying shorter term for maintaining the claim than with the other party's demand for the com- is prescribed by the statute of limitations.pletion of the building by the end of the Dibble v. Reliance Life Ins. Co., 170 Cal, 199, time fixed by the latter as a reasonable 149 Pac. 171. time for such completion, does not constitute 3. A contract must have a lawful puran unreasonable delay, notwithstanding the pose, and transactions in violation of law can sidewalk is not completed until a month or not be made the foundation of a valid contract. Where the illegal sale of liquor enters contract had arisen upon which he was entiinto any contract as an inseparable part tled to retain the deposit.-Thomas V. Anof its consideration, or the terms or con- thony, 30 Cal. App. 217, 157 Pac. 823. ditions of the contract are inseparably connected with the illicit traffic in liquors, $ 1673. it is against public policy and immoral, and

1. Contracts in restraint of trade-Contherefore void.-Scheeline v. Pezzola, 29 Cal.

struction.--No exception is made in favor of App. 266, 155 Pac. 127.

contracts only in partial restraint of trade.

Chamberlain v. Augustine, 172 Cal. 285, 156 $ 1670.

Pac. 479. 1. Damage clause - Construction. This 2. An agreement made upon a sale of and the following section announce no new corporate stock and the withdrawal of the principles of law in this state. These sec- vendor from the business of the corporation, tions were intended to secure a just com- that he would pay to the vendees the sum pensation for injuries, when they could be of five thousand dollars, as liquidated damreadily ascertained, and to protect the par- ages, in the event that he, within three ties in those cases from improvident con- years from the date of the agreement, betracts. They were not intended to force came interested in any way in any business a construction of a contract that will assign conducted by any person or corporation in it to the prohibited class and thereby deprive the states of California, Oregon or Washinga party of the benefit of an agreement he ton, similar to that which such corporation has taken to secure him against loss of rents was then conducting, is in violation of secto accrue from his tenant.--Weinreich Estate tion 1673 of the Civil Code, and therefore Co. v. A. J. Johnston Co., 28 Cal. App. 144, unenforceable, since it clearly operates to 151 Pac. 667.

restrain the vendor from "exercising a law2. A bond in the penal sum of two thou- ful profession, trade or business."-Chamsand dollars, conditioned for the payment of berlain v. Augustine, 172 Cal. 285, 156 Pac. rent and the faithful performance of all 479. the other covenants of a lease, is to be construed as a "penalty to cover the actual $ 1674. damages" sustained upon the breach of any

1. Sale of good-will, exceptions Conof the covenants of the lease, and not as

struction.—Sale of corporate stock does not "stipulated damages," within the inhibition

constitute a sale of the good-will of the of sections 1670 and 1671 of the Civil Code.

corporation so as to bring it within the Weinreich Estate Co. v. A. J. Johnston Co.,

purview of section 1674 of the Civil Code, 28 Cal. App. 144, 151 Pac. 667.

which permits the seller of the good-will 3. A plaintiff seeking to recover a sum as

of his business to make an agreement not stipulated damages must also show by plead

to engage in business in the vicinity for a ing and proof that it is a case where the

specified length of time. — Chamberlain v. parties are allowed under the code to stip

Augustine, 172 Cal. 285, 156 Pac. 479. ulate the damages.-Weinreich Estate Co. v.

2. A contract not to engage in the same A. J. Johnston Co., 28 Cal. App. 144, 151

business for twenty years in the city in Pac. 667.

which the business sold was conducted is not

void because the time is unreasonably long, § 1671.

where the successors in interest of the buyer, 1. Exception — Pleading and proof. — In after six years, are still conducting the order to entitle defendant to retain the sum original business.-Akers v. Rappe, 30 Cal. deposited with him as contingent liquidated App. 290, 158 Pac. 129. damages for the breach of an obligation, he must show not only by averment but also

1682. by proof, that the case is within the excep

1. tion noted herein, for without an averment

Extinguishment of contract.—The mere bringing him within the exception the plead

assertion that the party will be unable, ing is insufficient, inasmuch as

the pre

or will refuse to perform his contract, is not sumption is, in the absence of the averment,

sufficient to terminate it; it must be a disthat such agreement is void. -- Thomas v.

tinct, unequivocal, absolute refusal to perAnthony, 30 Cal. App. 217, 157 Pac. 823.

form, treated and acted on as such by the 2. Where a contract for the purchase of a

promisee, and must be of the whole contract. number of motor

-Rauer's Law & Collection Co. v. Harrell, cars between specified

32 Cal. App. 45, 162 Pac. 125. dates provided that in case of the cancellation of the contract before its expiration, or in the event that its terms should not be

$ 1688. fully complied with by the purchaser, the 1. Rescission of contract.-The word “redeposit made by the purchaser should be scind," when used with reference to the retained by the seller as damages, it is the refusal of a party to a contract for the duty of the latter in an action by the former sale of real estate to further proceed with to recover such a deposit on the theory the fulfillment, is not employed in the sense of a rescission of the contract by mutual in which it is used in the code sections, consent, to show that he has been actually which refer to the termination of contracts damaged in the sum deposited, or that any by the technical process of rescission, but it of the other contingencies mentioned in the is rather employed in the sense and as the

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