F. A. POTTER, A. W. POTTER, and B. G. FULLER v. ROBERT J. MERCER, WM. J. BUTLER, JOHN COOK, JOHN TROUNSON, and JOHN DOE, 53 Cal. 667

By the Court, Crockett, J.: The most important question on this appeal is, whether the verbal agreement which one of the plaintiffs testified was entered into on the 27th day of September, was a lease in presentí for a term of one year, to commence on the 1st day of October next ensuing, or whether it was only an agreement for a written lease to be thereafter executed. There is no conflict in the evidence to the effect that a written lease was to be executed, and that the agents of the lessor refused to make a verbal lease. F. A.

Potter, one of the plaintiffs, on cross-examination, was asked the question whether there was an understanding between the parties, that when they got through with the negotiations a written lease was to be made ? To which he answered: “ My understanding was that, when I rented the store in the morning, they told me that they would make out a written lease. I went to occupy it with that understanding.” A. W. Potter, another of the plaintiffs, testified: “ I told him [Mercer] that we would be satisfied with a verbal lease, for that would hold it for the year at any rate.

He says: Well, I can’t make the lease a verbal lease. I would have to see Mr. Davis. Whatever arrangements you make with Mr. Davis would be satisfactory.’ ” Fuller, another of the plaintiffs, testified that in a conversation with Davis, the day before the alleged leasing, Davis “ made the remark for Mr. Mercer to make out the lease and submit it to him to read.” There is nothing in all the testimony tending to show that the lease was to be verbal.

On the contrary, the whole of the evidence on that point tends to show that the agents for the lessor refused to make a verbal lease, and that the parties all understood that the lease was to be in writing, and was to be submitted to Davis for his approval before taking effect. This circumstance of itself is sufficient to show that the. parties could not have understood the conversation which occurred on the 27th of September as a lease in presentí, and must have understood that it was not intended to vest an estate in the plaintiffs until the agreement should be consummated by a written lease.

If a proposed lessor, during the entire negotiation, explicitly refuses to make a verbal lease, and thereupon it is mutually agreed that the lease shall be reduced to writing, it is difficult to see on what ground it could be held that the verbal agreement for a written lease is of itself a lease in presentí. To give this construction to the verbal agreement would be to bind the lessor by a verbal lease, when he refuses peremptorily to make a verbal lease.

In other words, it would be, by construction of law, to make a valid verbal lease in presentí, in the face of a distinct understanding between the parties that there was not to be a verbal lease at all. The verbal contract may be a valid agreement for a written lease, for a breach of which an action for damages would lie ; but it is not of itself a lease in presentí.

But much stress is laid upon the fact that immediately after the verbal agreement for a written lease, which the plaintiff testifies, occurred during the forenoon of September 27th, he was permitted to take lumber into the building to fit it up as a store, and was allowed to occupy it for that purpose, in advance of the commencement of the term.

The transaction, as testified to by plaintiff, was, that immediately after the verbal agreement for the written lease was entered into with Mercer, he [the plaintiff] went to Davis and told him that he had leased the store, and that Mercer promised to make out the written lease in the course of the day; and “ asked his permission, or rather, asked him if it would be presuming, if I-should go and take my lumber there and commence my work * * * putting in my fixtures, shelving, etc., for business; he said that he had no objections.” He further testified that he then went directly to Mercer’s office and told him that Davis had given permission to put the lumber in, to which Mercer replied: “ All right: whatever Mr.

Davis says in the matter is all right.” Mercer then told him where to get the key; and after getting it, he immediately employed a carpenter, who on the same day took lumber into the building and commenced work. The only other evidence on this point was that of Davis, who testified that he consented that the plaintiffs might put their lumber on the sidewalk, but said further : “ I would certainly not have given them possession, if I had had the power, until the lease was executed and the rent was paid.” For the purposes of this decision, it will be assumed that the transaction was as stated by the plaintiff.

Whether a license to enter under these circumstances for the specific purpose of fitting up the store, and the entry under the license, had the effect' in law to vest in, the plaintiff the possession of the building may admit of a grave doubt, and we are not to be understood as holding that it had that effect. But for the purpose of this decision only we shall assume that it did.

When an agreement,for a lease has been reduced to writing, and even though it contain a stipulation that a formal lease in writing shall be subsequently executed, the question has frequently arisen whether the written agreement operates as a lease in presentí, or only as an agreement for a lease in futuro. ■ In such cases the rule, as established by numerous decisions, is, First. That effect will be given to the instrument according to the inténtion of the parties, to be ascertained from all the terms of the instrument itself, considered in the light of the surrounding circumstances. Second.

That if the instrument contain words of a present demise, it will be deemed a lease in presentí, unless it appear from other portions of the instrument that such was not the intention of the parties. Third. That if possession be given under the agreement, this will be a circumstance tending to prove' that it was intended as a lease in presentí. On this point see 1 Washburn on Real Property, 300, side page, • and cases there cited; Chapman v. Towner, 6 Mees. & W. 100; Jones v. Reynolds, 1 Q. B. 306; Doe v. Benjamin, 1 Perry & D. 440; Bacon v. Bowdoin, 22 Pick. 401; Jenkins v. Eldridge, 3 Story, 325; People v.

Gillis, 24 Wend. 201; Jackson v. Delacroix, 2 Wend. 430. . In such cases, the delivery of the possession is considered as one of the elements in the transaction tending to throw light on the intention of the parties to the instrument, and as one of the attending circumstances in the light of which the instrument is to be construed. The same rule may properly be applied in ascertaining the intention of the parties to a verbal agreement for a lease.

In each case the object is to ascertain whether the parties intended a lease in presentí, or an agreement for a lease in futuro ; and the delivery of the possession becomes material only in so far as it may tend to throw light on the intention of the parties, and thus enable the Court properly to construe the agreement. But if there be nothing doubtful in the agreement, by the very terms of which it plainly appears that it was intended as an agreement for a written lease in futuro, and not a lease in presentí, the delivery of the possession is an immaterial circumstance.

It cannot be invoked- to overthrow an agreement, the terms of which are so plain and explicit as to speak for themselves, and which need no

interpretation. If, for example, the agreement be in writing, and explicitly declares on its face that it is intended only as an agreement for a written lease in futuro, and is not to be deemed a lease in presentí, the delivery of the possession could cut no figure in construing such an instrument, which would speak for itself, and the terms of which were in no wise -doubtful. The same rule applies in construing a verbal agreement for a- lease.

If the terms of the agreement are plain, intelligible, and free from ambiguity, and if from these it clearly appears that the agreement was for a written lease in futuro, and not for a verbal lease in presentí, and was so understood by the parties, the Court will give effect to it according to its terms, and the delivery of the possession will have no office to perform in aiding the Court to interpret a contract which, by its terms, is so explicit as to need no

interpretation. Such, as we have seen, was the character of this contract. The plaintiffs themselves understood it as an agreement for a written lease in futuro, and not as a verbal lease in presentí, and did not pretend at the trial that they understood it otherwise. Moreover it is perfectly clear, from all the testimony on the point, that the permission to take in lumber and to commence fitting up the store in advance of the commencement of the term, was given on the hypothesis that the verbal agreement would be consummated by the execution of a written lease to conform to the verbal agreement.

But when the contract fell through, from whatever cause, and was never consummated by a written lease, the purpose for which the entry was permitted ceased. The plaintiffs, as we have seen, acquired no estate in the premises by virtue of the verbal contract; and if they can maintain this action, their right to do so must rest wholly on the license to enter, followed by their possession under it. But the license- was revocable from the beginning, and was actually revoked on the evening of the same day on which it was given.

A license in respect to real estate is defined to be, “ An authority to do a particular act, or series of acts, on another’s land, without possessing any estate therein.” (2 Bouv. Law Diet. 45, Tit. “ License ” ; 1 Washb, on Real Property, 398, side page, and authorities there cited.) And the general rule, as settled by the weight of authority, is, that an executory license is revocable at the will of the licensor, even though the licensee has expended money on the faith of the license, and that, too, without refunding the expenditure. (2 Bouv.

Law Diet. 5; 1 Washb. on Real Property, 348; 11 Mass. 433; 15 Wend. 380; 10 Conn. 378; 23 Ibid. 223; 3 Duer, 355; 11 Met. 351; 2 Gray, 302; 24 N. Y. 364; 13 Ibid. 264; 4 Johns. 418; 3 Wis. 117; 13 Mees. & W. 838; 35 Eng. L. and E. 489; 5 Barn. & A. 1.) But the effect of an executed or partially executed license, though revoked, is to excuse the licensee from liability for acts done properly in pursuance thereof, and their consequences; but the revocation puts an end to the license, and no further acts can be justified under it. (2 Bouv. L.

D. 45, and authorities there cited.) Applying these principles to the license under consideration, it results that the entry of the plaintiffs under the license, and their possession, was lawful so long as' the license continued in force; but when it was revoked, their right to the possession ceased, and the defendants were entitled to re-enter, if they could do so peaceably. The proof shows that they did re-enter peaceably and without force or violence, and their entry was not unlawful.

The complaint, however, charges that the defendants, during the temporary absence of the plaintiffs, entered, “ with a strong hand and force,” and have kept and retained the possession “ by force and with a strong hand.” The proof, however, shows that the entry was peaceable and without force. But after thus obtaining the possession, the defendants, on the following morning, refused to permit the plaintiffs to enter.

And it is suggested that this made out a case of forcible entry under the second subdivision of sec. 1159 of the Code of Civil Procedure, or of a forcible detainer under the first subdivision of sec. 1160.

If this construction of the statute be correct, it would result that if one be peacefully, but unlawfully, in the possession of another’s dwelling-house, and if the true owner, in the absence of the occupant, peacefully, and without violence or threats, regain the possession of his own property and then refuses to permit the intruder to reenter, he would be guilty of a forcible entry under subd. 2 of sec. 1159, or of a forcible detainer under the first subdivision of sec. 1160. But the statute was not intended to apply to such a case.

The Forcible Entry and Detainer Act of 1866 contained provisions identical with those above quoted from the Code of Civil Procedure ; and the case of Powell v. Lane, 45 Cal. 677, involved a consideration of those provisions. In that case the defendant was the owner of a tract of land, on which was a vacant house, into which the plaintiff entered without right, and continued in peaceable occupation of it for several months. During the absence of the plaintiff, the defendant entered peacefully and removed the plaintiff's furniture from the building.

On the return of the plaintiff, the defendant refused to permit her to enter, and she thereupon brought an action for a forcible entry and a forcible detainer; and we held that the action could not be maintained. There is no difference in principle between that case and this, on the point now under consideration. On the facts disclosed by the record, the verdict and judgment should have been for the defendants, and the motion for a new trial ought to have been granted. Judgment and order reversed, and cause remanded for a new trial. Remittitur forthwith. Mr. Justice McKinstry concurred in the judgment. Mr.

Chief Justice Wallace and Mr. Justice Niles did not express any opinion.