14. An oral agreement to sell personal property does not come within the provision of this subdivision, and need not be in writing.-Deyoe v. Paonessa, 26 Cal. App. 397, 147 Pac. 100.

15. An agreement to pay a broker a commission for the sale of personal property is not invalid under subdivision 6 of section 1624 of the Civil Code because not in writing, by reason of the fact that the seller accepts real property in exchange therefor instead of money.-Deyoe v. Paonessa, 26 Cal. App. 397, 147 Pac. 100.

16. A written agreement to pay a real estate broker a certain sum of money for services in effecting an exchange of real property executed after the full performance of the services, but before the exchange was fully consummated, is valid under the statute of frauds.-Carrington v. Smithers, 26 Cal. App. 460, 147 Pac. 225.

17. Where the memorandum was in writing, the fact that it did not specify the commission to be paid did not subject it to the objection that it is void under this subdivision. Muncy v. Thompson, 26 Cal. App. 634, 147 Pac. 1178.

18. The word "commission" as used in the section should be given a broader meaning than merely that of a per centum valuation on the services of either agent; and that if it is made to appear that the first agent, by virtue of whatever understanding he may have with his principal, is to derive a definite advantage in the way of a material profit from the sale or exchange of his principal's property, and that such agent does derive such advantage through the co-operation and services of a second agent, as the result of an oral agreement between them, the former must account to the latter therefor. Under such circumstances this section has no application. Jenkins V. Locke-Paddon Co., 30 Cal. App. 52, 157 Pac.

537.

19. A purchaser ready, able and willing to buy the property is produced within the meaning of a written authorization when one is found who was ready, willing and able to buy the property for any sum up to or in excess of the net amount specified.-Daniel v. Calkins, 31 Cal. App. 514, 160 Pac. 1082.

20. When an agent's authorization is written, the amount of his compensation in the event of a sale may be agreed upon orally.Daniel v. Calkins, 31 Cal. App. 514, 160 Pac. 1082.

21. A contract by which one party agrees to furnish another with the name of a person who may purchase his property in consideration of which the latter agrees to pay the former a commission comes within this subdivision.-Cram v. McNeil, 32 Cal. App. 101, 162 Pac. 140.

22. Section 1624 of the Civil Code does not require any formal contract of employment; all that is necessary is, that the fact of employment be expressed in writing, signed by the party to be charged or by his agent.-McCartney v. Clover Valley Land & Stock Co., 232 Fed. 697.

23. Correspondence relating to the em

ployment of a broker may constitute a sufficient note or memorandum to satisfy section 1624 of the Civil Code.-McCartney v. Clover Valley Land & Stock Co., 232 Fed. 697.

24. -Defenses.-The defendant in an action for broker's services is in no position to avail himself of the point that the description of the property for the sale of which the plaintiff claimed compensation, contained in the contract, was insufficient under the statute of frauds, if the statute is not specially pleaded in the answer and the contract not denied, but, on the contrary, set up as the contract entered into.-Healy v. Obear, 29 Cal. App. 696, 157 Pac. 569.

25. --Purpose of.-This provision was only designed to protect owners of real estate against unfounded claims of brokers, and does not extend to agreements between brokers to co-operate in making sales for a share of the commissions.-Hellings v. Wright, 29 Cal. App. 649, 156 Pac. 365; Jenkins v. Locke-Paddon Co., 30 Cal. App. 52, 157 Pac. 537; Sellers v. Solway Land Co., 31 Cal. App. 259, 160 Pac. 175.

26. -Subdivision 7. -This can have no application to a contract which was fully executed before this sub-section was added. -Rogers v. Schlotterback, 167 Cal. 35, 138 Pac. 728.

27. One may make a valid contract with another to will property in a specified way, and in the event of a breach the promisee has an action for damages. In some cases this, by reason of the circumstances, may be his only remedy, for a resort to any equitable remedy can be had only where the circumstances are such as to make the case one within the well-settled principles relative to the proper exercise of equitable jurisdiction.-Morrison v. Land, 169 Cal. 580, 147 Pac. 259.

28. An oral agreement to pay a specific sum of money in consideration of furnishing the promisor a regular, permanent and established home during the term of his natural life is an agreement which, as to him, is not by its terms to be performed within his lifetime, but immediately after his death, and is, therefore, invalid under subdivision 7 of section 1624 of the Civil Code and the same subdivision of section 1973 of the Code of Civil Procedure.-Hagan v. McNary, 170 Cal. 141, 148 Pac. 937.

29. This is inapplicable to a contract to dispose of property in a particular way resting in parol where it was executed by the promisee prior to the enactment of this subdivision. Monsen v. Monsen, 174 Cal. 97, 162 Pac. 90.

Its

3. In the construction of any written instrument, whether it be a constitution, a statute or a contract, the most important duty of the court is directed to discovering the true meaning of the instrument. endeavor is directed first to attaining an understanding of the purpose and object of the writing, and next to the giving to that purpose and object the fullest expression compatible with the meaning of the language through which that purpose and object find expression. Words, phrases and sentences, therefore, are construed in contemplation of these fundamental purposes and objects, and when any doubt of their precise meaning is found to exist, aid in arriving at that meaning is drawn from the general rules and principles governing the construction of such doubtful language.— Perry v. Gross, 172 Cal. 468, 156 Pac. 1031.

4. A contract for a broker's commission for effecting an exchange of properties, which as to the payment of the commission provides that the time of payment should be extended until a certain potato crop belonging to the owner of the properties has been harvested, and that when the crop is sold the proceeds to the amount of sixteen hundred and fifty dollars is to be turned over to the broker "in liquidation of the indebtedness," constitutes merely a limitation upon the amount of money to be paid to the broker from the proceeds of the crop, and not that the proceeds of the crop should be accepted in liquidation of the claim.-Evans v. Hindes, 29 Cal. App. 708, 157 Pac. 522.

5. Matters that relate to the preliminary question whether a contract has been made are in general governed by a fixed law, which is independent of and can not be varied by the intention of the parties. Such matters include the capacity of the parties to contract, conditions or restrictions upon the right to contract, and the formal validity of the contract. The governing law, on the other hand, with respect to the obligation of the contract, is, as a general proposition, dependent upon the intention of the parties, expressed or presumed.-Flittner v. Equi

1. Construction of contract-Every part to be given effect.-All the parts of a contract must be read together and given effect, if possible.-McCampbell v. Obear, 27 Cal. App. 97, 148 Pac. 942.

2. Every provision, clause, and word shall be taken into consideration in ascertaining the meaning of the party, whether words of grant, of description, or words of qualification, restraint, exception, or explanation, and every word shall be presumed to have such force and effect as it can have.-East San Mateo Land Co. v. Southern Pac. R. Co., 30 Cal. App. 223, 157 Pac. 634.

3. The scope, purpose and effect of a lease must be determined from the instrument as a whole rather than by a resort to any individual clause thereof, and, so construed, it must be given such an interpretation as will make it effective in conformity with the intention of the parties.-Barron Estate Co. v. Waterman, 32 Cal. App. 171, 162 Pac. 410.

§ 1642.

1. Construction of contract-Several contracts construed together, when.-Actual annexation is not essential to a merger by reference of separately executed written instruments.-Beedy v. San Mateo Hotel Co., 27 Cal. App. 653, 150 Pac. 810.

2. A written agreement may, by reference expressly made thereto, incorporate other written agreements, and when such reference is made the original agreement and those referred to must be considered and construed as a whole.-Beedy v. San Mateo Hotel Co., 27 Cal. App. 653, 150 Pac. 810.

3. In case a building contract is amended by another agreement which does not entirely supersede it, both of the contracts may be construed as a single agreement, and parol evidence is not admissible to strike out a provision in the first contract for payment.-Giberson v. Fink, 28 Cal. App. 25, 151 Pac. 371.

4. Ordinarily the identity of the parties to several instruments will be disclosed by a reference to the instruments themselves; but the question as to whether or not several instruments between the same parties were contemporaneously executed and intended by the parties thereto to cover a single transaction, oftentimes can not be

ascertained from an inspection of the instruments; consequently, if the intention of the parties be either not expressed or doubtfully expressed, resort may be had to extrinsic evidence which will show the circumstances under which the several instruments were made, for the purpose of ascertaining the intention of the parties concerning the scope and effect of the several instruments.-Torrey v. Shea, 29 Cal. App. 313, 155 Pac. 820.

§ 1643.

1. Interpretation in favor of contract.— As between two permissible constructions, that which establishes a valid contract shall be preferred to that which does not.-Weinreich Estate Co. v. Johnston, 28 Cal. App. 144, 151 Pac. 667.

§ 1644.

1. Ordinary words to be given usual significance.—The making of the sale by the owner is not a "ratification" of the sale within the meaning of such word in the contract, as the term "ratify" refers to the act of another.-Snook v. Page, 29 Cal. App. 246, 155 Pac. 107.

§ 1645.

1. Technical words to be given technical meaning.-Legal terms are to be given their legal meaning unless obviously used in a different sense. Weinreich Estate Co. V. Johnston, 28 Cal. App. 144, 151 Pac. 667.

§ 1646.

1. Law of the place.-A contract as to its nature, obligation and validity, is governed by the law of the state where made, unless it is performed in another state, in which case it will be governed by the law of the state of performance. When it appears that the place of performance was different from the place of making the contract, it is to be construed according to the laws of the place where it is to be performed.-Flittner v. Equitable Life Assur. Soc., 30 Cal. App. 209, 157 Pac. 630.

2. All matters connected with the performance of a contract are regulated by the law of the place where the contract by its terms is to be performed. All matters bearing upon the execution, the interpretation and the validity of contracts, including the capacity of the parties to contract, are determined by the law where the contract is made.-Flittner v. Equitable Life Assur. Soc., 30 Cal. App. 209, 157 Pac. 630.

3. As a general proposition, the capacity of parties to contract is to be determined by the law of the place where the contract is made.-Flittner v. Equitable Life Assur. Soc., 30 Cal. App. 209, 157 Pac. 630.

contract reduced to writing and executed by the parties shall have anything added to or taken away from it by evidence of "surrounding circumstances." This rule of evidence is invoked and employed only in cases where upon the face of the contract itself there is doubt and the evidence is used to dispel that doubt, not by showing that the parties meant something other than what they said, but what was meant by what they said. United Iron Works v. Outer Harbor, D. & W. Co., 168 Cal. 81, 141 Pac. 917.

2. Surrounding circumstances. - The admission of evidence touching the circumstances surrounding the execution of a contract is not injurious, where such evidence merely tends to confirm its proper legal construction.-Provident Gold Min. Co. v. Manhattan Securities Co., 168 Cal. 304, 142 Pac. 884.

3. Surrounding circumstances are to be considered in construing a contract only when the terms of the agreement leave the intention of the parties uncertain.-Salter v. Ives, 171 Cal. 790, 155 Pac. 84.

4.

Contemporaneous or previous transactions may be considered in ascertaining the sense in which parties to a contract have used particular terms.-Fee v. McPhee, 31 Cal. App. 295, 160 Pac. 397.

5. Where a contract is uncertain or not clear as to its purpose and effect, the question whether the transaction of which it purports to be the evidence is a sale or a bailment is to be determined from all the circumstances giving rise to it, and on conflicting evidence a question of fact is presented for the jury's determination.-Slama Tire Protector Co. v. Ritchie, 31 Cal. App. 555, 161 Pac. 25.

1. Interpretation in sense promisor believed promisee understood.-The acts of the parties to a contract, accruing after the contract was made, may be looked to as indicating the construction which the parties themselves put upon a doubtful clause, and as aiding that construction.-Woodard v. Glenwood Lumber Co., 171 Cal. 513, 153 Pac. 951.

2. If the terms of a promise are in any respect ambiguous or uncertain they must be interpreted in keeping with the sense in which the promisor believed that the promisee understood them.-Simen v. Aftergut, 26 Cal. App. 361, 146 Pac. 1058.

3. A contract which has been prepared by one of the parties only will be construed in the sense which he supposed the adverse party understood it.-Ruffin v. Becker, 27 Cal. App. 163, 148 Pac. 233.

§ 1652.

1. Repugnancies reconciled, how. The repugnancies of a contract must be reconciled, if possible, by giving to them such an interpretation as will make them effective and at the same time subordinate to the general intent and purpose of the contract considered and construed in its entirety.-Rosenthal v. Bauer, 30 Cal. App. 251, 157 Pac. 1137.

§ 1654.

1. Words taken against whom.—Provisions in an insurance policy are always construed so as to prevent a forfeiture, if the language will reasonably permit such a construction.-O'Neill v. Caledonian Ins. Co., 166 Cal. 310, 135 Pac. 1121.

2. In presence of repugnancies or uncertainties the language of the contract is to be construed most strongly against the party responsible therefor, who, under such circumstances, is presumed to be the promisor. -Simen v. Aftergut, 26 Cal. App. 361, 146 Pac. 1058.

3. In cases of uncertainty, the language of a contract should be interpreted most strongly against the party who caused the uncertainty to exist.-Ruffin v. Becker, 27 Cal. App. 163, 148 Pac. 233; Simen v. Aftergut, 26 Cal. App. 361, 146 Pac. 1058.

§ 1657.

1. Time of performance.-A written contract to install a system of automatic sprinklers and fire-extinguishers in a box factory for a specified sum which contains no provision fixing the time within which the installation is to be made, requires performance within a reasonable time.-Roughton v. Brookings Lumber & Box Co., 26 Cal. App. 752, 148 Pac. 539.

an

2. A period of two or three months is not unreasonable time for the installation

of such a system, where much of the material for doing the work requires shipment from distant parts of the country.-Roughton v. Brookings Lumber & Box Co., 26 Cal. App. 752, 148 Pac. 539.

3. Where a building contract contains no provision as to the time within which the building shall be completed, the rule is that the building shall be completed within a reasonable time, and as to what constitutes a "reasonable time" depends upon the circumstances of the particular case.-Giberson v. Fink, 28 Cal. App. 25, 151 Pac. 371. 4.

Under such a contract the failure of the contractor by seven days in complying with the other party's demand for the completion of the building by the end of the time fixed by the latter as a reasonable time for such completion, does not constitute an unreasonable delay, notwithstanding the sidewalk is not completed until a month or

so later.-Giberson v. Fink, 28 Cal. App. 25, 151 Pac. 371.

§ 1659.

1. Joint and several liability.—A contract for the construction of a wagon road which recites that "the parties of the first part" (not named but described as "settlers" of a certain school district) agree to pay a named person, described as party of the second part, a certain sum per rod for the building of the road, creates a joint and several liability.-Shelton v. Michael, 31 Cal. App. 328, 160 Pac. 578.

§ 1667.

1. Contracts against public policy. A contract to pay commissions to a broker for negotiating an exchange of a note for a parcel of land is against public policy and void, and a promissory note given in consideration therefor is consequently invalid, where the other party to the exchange, who also agreed to pay the broker a commission, was without knowledge that the broker was to receive a commission from the other party. Glenn v. Rice, 174 Cal., 162 Pac. 1020.

2. A contract must have a lawful purpose; transactions in violation of law can not be made the foundation of a valid contract.Scheeline v. Pezzola, 29 Cal. App. 266, 155 Pac. 127.

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3. Contract between a railroad company and an engineer, by which the engineer was to gather information and data as to cost of construction, traffic conditions, etc., and to embody the results of his investigations in a report to be used in enlisting capital for the carrying out of the enterprise, is not against public policy.-Sacramento Valley Elec. R. Co. v. Aston, 236 Fed. 698.

§ 1668.

1. Unlawful contracts — Construction of section.-Section 1668 applies to insurance policies, inasmuch as "all contracts" must necessarily apply to contracts of insurance. But the section does not apply when the effect of the clause eliminating fraud as a defense is merely to limit the time within which fraud may be urged as a defense to a reasonable time.-Dibble v. Reliance Life Ins. Co., 170 Cal. 199, 149 Pac. 171. 2.

The rule as to the incontestable character of such a provision is not changed by section 1668 of the Civil Code, which provides that all contracts that have for their object, directly or indirectly, to exempt any one from responsibility for his own fraud, are against the policy of the law, for the object and effect of such insurance provision is not to exempt the insured from the consequences of his fraud, but to provide a shorter term for maintaining the claim than is prescribed by the statute of limitations.Dibble v. Reliance Life Ins. Co., 170 Cal. 199, 149 Pac. 171.

3. A contract must have a lawful purpose, and transactions in violation of law can not be made the foundation of a valid con

and the following section announce no new principles of law in this state. These sections were intended to secure a just compensation for injuries, when they could be readily ascertained, and to protect the parties in those cases from improvident contracts. They were not intended to force a construction of a contract that will assign it to the prohibited class and thereby deprive a party of the benefit of an agreement he has taken to secure him against loss of rents to accrue from his tenant.-Weinreich Estate Co. v. A. J. Johnston Co., 28 Cal. App. 144, 151 Pac. 667.

2. A bond in the penal sum of two thousand dollars, conditioned for the payment of rent and the faithful performance of all the other covenants of a lease, is to be construed as a "penalty to cover the actual damages" sustained upon the breach of any of the covenants of the lease, and not as "stipulated damages," within the inhibition of sections 1670 and 1671 of the Civil Code.Weinreich Estate Co. v. A. J. Johnston Co., 28 Cal. App. 144, 151 Pac. 667.

3. A plaintiff seeking to recover a sum as stipulated damages must also show by pleading and proof that it is a case where the parties are allowed under the code to stipulate the damages.-Weinreich Estate Co. v. A. J. Johnston Co., 28 Cal. App. 144, 151 Pac. 667.

§ 1671.

1. Exception - Pleading and proof. In order to entitle defendant to retain the sum deposited with him as contingent liquidated damages for the breach of an obligation, he must show not only by averment but also by proof, that the case is within the exception noted herein, for without an averment bringing him within the exception the pleading is insufficient, inasmuch as the presumption is, in the absence of the averment, that such agreement is void. Thomas v. Anthony, 30 Cal. App. 217, 157 Pac. 823.

2.

Where a contract for the purchase of a number of motor cars between specified dates provided that in case of the cancellation of the contract before its expiration, or in the event that its terms should not be fully complied with by the purchaser, the deposit made by the purchaser should be retained by the seller as damages, it is the duty of the latter in an action by the former to recover such a deposit on the theory of a rescission of the contract by mutual consent, to show that he has been actually damaged in the sum deposited, or that any of the other contingencies mentioned in the

contract had arisen upon which he was entitled to retain the deposit.-Thomas v. Anthony, 30 Cal. App. 217, 157 Pac. 823.

§ 1673.

1. Contracts in restraint of trade-Construction.-No exception is made in favor of contracts only in partial restraint of trade. Chamberlain v. Augustine, 172 Cal. 285, 156 Pac. 479.

2. An agreement made upon a sale of corporate stock and the withdrawal of the vendor from the business of the corporation, that he would pay to the vendees the sum of five thousand dollars, as liquidated damages, in the event that he, within three years from the date of the agreement, became interested in any way in any business conducted by any person or corporation in the states of California, Oregon or Washington, similar to that which such corporation was then conducting, is in violation of section 1673 of the Civil Code, and therefore unenforceable, since it clearly operates to restrain the vendor from "exercising a lawful profession, trade or business."-Chamberlain v. Augustine, 172 Cal. 285, 156 Pac. 479.