recital having been made, there could be no question as to their legal effect. No evidence could have been introduced and no inference drawn to limit them simply to a release of the mortgage. They were not coupled in the operative clause with a limitation to the mortgage interest as were the operative clauses in the Barnstable Savings Bank case, in Donlin v. Bradley, and in Barr v. Foster, cited by the appellant.

The appellant maintains that notwithstanding the lack of ambiguity in the operative words of the instrument, the intent of the grantor was shown by the recitals in the preamble. If his contention were sound, no matter how broad was the language used, it would not be extended beyond the clear intent of the parties. (Civ. Code, sec. 1648.) It is only when the operative words of grant are doubtful that recourse may be had to its recitals to assist in the construction. (Civ. Code, sec. 1068.) The recitals in an instrument may be operative in the sense that they may bind either or both parties to the truth of the facts stated, or they may be examined for the purpose of resolving an ambiguity in the operative words of the grant itself, but where the words of grant are clear, the recitals cannot be resorted to for the purpose of imparting an ambiguity to the entire instrument by which clear words of grant may be limited in their effect. It may be contended that a quitclaim deed is not a grant and that section 1068 of the Civil Code applies only to technical grants. [2] But the word "grant" includes all sorts of conveyances, including quitclaim deeds. (Faivre v. Daley, 93 Cal. 664, [29 Pac. 256].) If several parts of a grant are absolutely irreconcilable, the former part prevails (Civ. Code, sec. 1070), but this section must be read in connection with section 1068, and with section 1069, which provides that it is to be interpreted in favor of the grantee.

[3] Grants are to be interpreted as other contracts (Civ. Code, sec. 1066), and they may be explained by the circumstances under which they were made and the matter to which they relate (Civ. Code, sec. 1647). An examination of the surrounding circumstances in making the instrument in question supports the conclusion that under the rules of construction of the language of the instrument, the operative words must be given their full significance.

The appellant maintains that the external circumstances show the instrument was intended merely as a release. An

examination of all the circumstances before the court gives little support to this contention. Thomas R, Bard, as the attorney in fact of Thomas A. Scott of Philadelphia, in 1869 was authorized to bargain and sell Scott's lands in Humboldt County, to make deeds of quitclaim, special warranty, and general warranty, to accept mortgages, to collect moneys due Scott and to compound the same; to execute and to satisfy of record releases of mortgages and to give acquittances and releases. When the instrument in question was executed under this power, Bard knew that he was authorized to make quitclaim deeds and to release mortgages. He also knew that on the same day the mortgage was made, he reserved what the appellant maintains was a legal estate out of the mortgaged premises, consisting of rights under the surface of the lands mortgaged. He knew, therefore, that his principal had both legal and equitable interests in the lands. The instrument was made before the mortgage debt became due. It is significant that it does not recite the fact of payment of the debt. It does recite that the owners were desirous of having the lands relieved from the operation of the mortgage, and in consideration of that desire, and for a further consideration, Bard used the language necessary to convey both the legal and the equitable interests of his principal. He did not use the language he was expressly authorized to use in the event of the payment of the mortgage debt.

These transactions occurred nearly fifty years ago. The original grant from Scott to the Walkers was made in November, 1869. The instrument in question was made in 1870. Scott lived for twenty-one years after the instrument in question was executed. During that period the Walkers dealt with the property in all respects as their own; deeds between the original grantees and from the original grantees to their successors were executed and recorded, and a few months before Scott's death, successors of one of the Walkers in terms leased to one Graham a portion of the lands included within the original deed for the express purpose of drilling, digging, boring, and removing petroleum, oil, and similar substances therefrom. Scott died in 1891; between that time and 1903 numerous other conveyances and leases of the lands and parts of them were recorded, some of them reserving in the grantors named in these latter conveyances, and others transferring to the grantees named therein, the oil and similar products

40 Cal. App. 33

with the right to extract the same. All these instruments, some fifteen in number, were matters of public record more than twelve years before the plaintiff was appointed the administrator of the cstate of Scott, with the will annexed. His appointment was not until twenty-three years after the death of Scott. The appointment was made in 1914, and this suit was brought shortly thereafter. Notwithstanding the appellant's claim that during this period of half a century Scott and his estate have held an estate in the lands of which they could not be divested by nonuser, that interest in the lands was never assessed, at least before 1909, to either Scott or Scott's estate. The entire interest in the property was assessed to the holders claiming under the instrument in suit, and all taxes were paid by them. Their property was fenced and held by them openly as their own. Even though all the elements of adverse possession of such an estate as the appellant claims do not appear, for the reason that the clock would not begin running until Scott or his representatives were denied the right to exercise the privileges reserved in the original deed, in view of the notice imparted by the recordation of the instruments during a long period of years showing the adverse claims of the Walkers and their successors, coupled with the fact that at the expiration of forty-five years after the instrument in suit was executed, the plaintiff, as the representative of Scott's estate, deemed it necessary to bring a suit to quiet those adverse claims, the principle that equity does not look with favor upon stale claims might well be applied. Whether this principle would be conclusive or not, the dealings of the Walkers and their successors with the land after the execution of the instrument in suit and the silence on the part of Scott and the representatives of his estate in regard to the clouds upon his title, if he still retained title, would indicate that the parties to the instrument had themselves considered the operative words to mean exactly what they say.

[4] Respondent urges that apart from any question of construction of the instrument or of adverse possession, the court made the ultimate findings of fact of ownership in the defendants and lack of ownership in the plaintiff, and that these findings fairly sustain the judgment. This rule directly applies to the present case, unless the findings of the probative facts regarding possession and the construction of

the instrument in suit are at variance with the finding of ownership in the defendants. (McArthur v. Goodwin, 173 Cal. 499, [160 Pac. 679].) In support of the construction given to the instrument in suit by the lower court, there may have been additional facts before the lower court not presented by the judgment-roll. Ordinarily the existence of whatever facts might be necessary to support the finding of ownership in such a case would be presumed to have been. presented to the lower court in support of its action. Upon the facts before this court, Scott's title was divested in 1870, since which time the defendants and their predecessors in interest have been, as they still are, the owners of the lands in fee.

Judgment is affirmed.

Langdon, P. J., and Haven, J., concurred.

[Civ. No. 2741. First Appellate District, Division Two.-April 1, 1919.] JAMES EVA ESTATE (a Corporation), Respondent, v. THE MECCA CO. (a Corporation), Defendant; OAKLAND BREWING AND MALTING CO. (a Corporation), Appellant.

[1] GUARANTY-SURETY OF LESSEE-CONSTRUCTION OF CODE SECTIONS.—Sections 594-596, inclusive, of the Political Code are intended to apply exclusively to the conduct of the business of insurance as such, and their provisions cannot be stretched to cover the case of a single contract of guaranty, such as where one person acts as surety upon a bond guaranteeing the faithful performance on the part of a lessee of the covenants of a written lease.

[2] CORPORATION LAW-POWERS OF CORPORATION-ULTRA VIRES ACTS— NOTICE. Where an act is within the corporate powers for some purposes or under some conditions, the rights of parties who have dealt with the corporation, under the express or implied representation that it is acting with such powers in the making of a particular contract, are entitled to favorable consideration; and in such a case the defense of ultra vires is not available unless it is shown that the party dealing with the corporation had notice of the intention to perform the act for an unauthorized purpose, or under circumstances not justifying performance.

[3] ID. LIABILITY TO THIRD PARTIES-DEFENSE-DIRECT ATTACK.-The attempt of a corporation to use the defense of ultra vires as a means of escaping its liability to third parties is regarded with much less favor than when a direct attack upon such corporate act is made by a stockholder or by the state.

[4] ID. BURDEN OF PROOF.-Where the corporate act is within the powers of the corporation for some purposes and is claimed to be without its powers under given circumstances, the burden of proving the latter state of affairs rests upon the corporation denying its liability.

[5] ID.-POWER TO EXTEND FINANCIAL AID.-A corporation organized for the purpose of operating and maintaining the general business of brewing and malting may, in furtherance of its own interests, extend financial aid to its customers.

[6] ID.-GENERAL POWER - WANT OF BENEFIT BURDEN OF PROOF.Where it is within the general powers of a corporation to execute a guaranty bond under some circumstances, but such act is ultra vires if such corporation receives no direct benefit therefrom, in an action to recover upon such bond, the burden is on the corporation of proving that it received no such benefit. [7] LANDLORD AND TENANT-REBATE IN RENT-EFFECT ON LEASE.-A rebate, for certain months, made by the lessor to the lessee and to a committee of its creditors, is not sufficient to establish a change in the written lease so as to affect the amount of future installments of rent.

[8] ID.-CORPORATION PARTY TO REBATE-ESTOPPEL.-Where the corporation surety for the lessee, through its vice-president, asked for and consented to such change in the amount of the rent, it cannot be heard to object thereto.

APPEAL from a judgment of the Superior Court of Alameda County. W. M. Conley, Judge Presiding. Affirmed.

The facts are stated in the opinion of the court.

Snook & Church for Appellant.

W. B. Rinehart for Respondent.

HAVEN, J.-Action by a lessor for the collection of delinquent rent, against its lessee and two sureties upon a bond guaranteeing the faithful performance on the part of said lessee of the covenants of a written lease. The lessee suffered default and the action was tried as against the sureties