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CHAPTER IV.

LIFE AND HEALTH INSURANCE. $ 2762. Insurance upon life, when payable. $ 2763. Insurable interest. $ 2764. Assignee, etc., of life policy need have no interest. $ 2765. Notice of transfer. 2766. Measure of indemnity.

$ 2762. Insurance upon ife, when payable. An ins ance upon life may be made payable on the death of the person, or on his surviving a specified period, or periodically so long as he shall live, or otherwise contingently on the continuance or determination of life. En. March 21, 1872

Mutual life, health, and accident insurance corporations: See ante, secs. 437 et seq.; post, Appendix, title Insurance.

Fraternal societies not insurance companies: See ante, sec. 451.

$ 2763. Insurable interest. Every person has an insurable interest in the life and health:

1. Of himself;

2. Of any person on whom he depends wholly or in part for education or support;

3. Of any person under a legal obligation to him for the payment of money, or respecting property or services, of which death or illness might delay or prevent the performance; and,

4. Of any person upon whose life any estate or interest vested in him depends. En. March 21, 1872.

Cal.Rep.Cit. 90, 248.
Insurable interest generally: Ante, secs. 2546 et seq.

$ 2764. Assignee, etc., of life policy need have no interest. A policy of insurance upon life or health may pass by transfer, will, or succession to any person, whether he has an insurable interest or not, and such person may recover upon it whatever the insured might have recovered En. March 21, 1872.

Cal.Rep.Cit. 90, 251.
Compare with section 2553, ante.

8 2765. Notice of transfer. Notice to an insurer of a transfer or bequest thereof is not necessary to preserve the validity of a policy of insurance upon life or health, unless thereby expressly required. En. March 21, 1872.

$ 2766. Measure of indemnity. Unless the interest of a person insured is susceptible of exact pecuniary measurement, the measure of indemnity under a policy of insurance upou life or health is the sum fixed in the policy. En. March 21, 1872.

Act relating to life, health, accident and annuity or en. dowment insurance: See post, Appendix, title Insurance.

TITLE XII.

INDEMNITY. 2772. Indemnity, what. $ 2773. Indemnity for a future wrongful act void.

2774. Indemnity for a past wrongful act valid. $ 2775. Indemnity extends to acts of agents.

2776. Indemnity to several. $ 2777. Person indemnifying liable jointly or severally with person

indemnified. $ 2778. Rules for interpreting agreement of indemnity. $ 2779. When person indemnifying is a surety. $ 2780. Bail, what. $ 2781.

How regulated. $ 2772. Indemnity, what. Indemnity is a contract by which one engages to save another from a legal consequence of the conduct of one of the parties, or of some other person. En. March 21, 1872.

Cal.Rep.Cit. 58, 439; 70, 557.

§ 2773. Indemnity for a future wrongful act void. An agreement to indemnify a person against an act thereafter to be done is void, if the act be known by such person, at the time of doing it, to be unlawful. En. March 21, 1872. Am'd. 1873-4, 259.

$ 2774. Indemnity for a past wrongful act valid. An agreement to indemnify a person against an act already done is valid, even though the act was known to be wrongful, unless it was a felony. En. March 21, 1872.

$ 2775. Indemnity extends to acts of agents. An agreement to indemnify against the acts of a certain person applies not only to his acts and their consequences, but also to those of his agents. En. March 21, 1872.

Cal.Rep.Cit. 58, 439.

§ 2776. Indemnity to several. An agreement to indemnify several persons applies to each, unless a contrary intention appears. En. March 21, 1872.

: 2777. Person indemnifying liable jointly or severally with person indemnified. One who indemnifies another against an act to be done by the latter, is liable jointly with the person indemnified, and separately to every person injured by such act. En. March 21, 1872.

$ 2778. Rules for interpreting agreement of indemnity. In the interpretation of a contract of indemnity, the following rules are to be applied, unless a contrary intention appears:

1. Upon an indemnity against liability, expressly, or in other equivalent terms, the person indemnified is entitled to recover upon becoming liable;

2. Upon an indemnity against claims, or demands, or damages, or costs, expressly, or in other equivalent terms, the person indemnified is not entitled to recover without payment thereof;

3. An indemnity against claims, or demands, or liability, expressly, or in other equivalent terms, embraces the costs of defense against such claims, demands, or liability incurred in good faith, and in the exercise of a reasonable discretion;

4. The person indemnifying is bound, on request of the person indemnified, to defend actions or proceedings brought against the latter in respect to the matters embraced by the indemnity, but the person indemnified has the right to conduct such defenses, if he chooses to do so;

5. If, after request, the person indemnifying neglects to defend the person indemnified, a recovery against the latter, suffered by him in good faith, is conclusive in his favor against the former;

6. If the person indemnifying, whether he is a principal or a surety in the agreement, has not reasonable notice of the action or proceeding against the person indemnified, or is not allowed to control its defense, judgment against the latter is only presumptive evidence against the former;

7. A stipulation tnat a judgment against the person indemnified shall be conclusive upon the person indemnifying,

is inapplicable if he had a good defense upon the merits, which by want of ordinary care he failed to establish in the action. En. March 21, 1872. Cal.Rep.Cit. 57, 50; 121, 519. Subd. 1 - 81, 273. Subd. 3–

81, 274. Subd. 4 - 68, 432. Subd. 5 – 81, 273. 82779. When person indemnifying is a surety. Where one, at the request of another, engages to answer in damages, whether liquidated or unliquidated, for any violation of duty on the part of the latter, he is entitled to be reimbursed in the same manner as a surety, for whatever he may pay. En. March 21, 1872.

$ 2780. Bail, what. Upon those contracts of indemnity which are taken in legal proceedings as security for the performance of an obligation imposed or declared by the tribunals, and known as undertakings or recognizances, the sureties are called bail. En. March 21, 1872.

$ 2781. How regulated. The obligations of bail are governed by the statutes specially applicable thereto. En. March 21, 1872.

TITLE XIII.

GUARANTY.
Chapter 1. Guaranty in General, $8 2787-2825.

II. Suretyship, 88 2831-2866.

CHAPTER I.

GUARANTY IN GENERAL. Article 1. Definition of Guaranty, 88 2787-2788.

II.

Creation of Guaranty, $S 2792-2795.
III. Interpretation of Guaranty, $8 2799-2802.
IV. Liability of Guarantors, &$ 2806-2810.
V.

Continuing Guaranty, $$ 2814-2815.
VI. Exoneration of Guarantors, $$ 2819-2825.

ARTICLE I.

DEFINITION OF GUARANTY. $ 2787. Guaranty, what. § 2788. Knowledge of principal not necessary

guaranty.

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§ 2787. Guaranty, what. A guaranty is a promise to answer for the debt, default, or miscarriage of another person. En. March 21, 1872.

Cal.Rep.Cit. 62, 487; 77, 477 ; 94, 103; 113, 434; 119, 70.

$ 2788. Knowledge of principal not necessary to creation of guaranty. A person may become guarantor even with. out the knowledge or consent of the principal. En. March 21, 1872.

ARTICLE II.

CREATION OF GUARANTY. $ 2792. Necessity of a consideration. $ 2793. Guaranty to be in writing, etc. $ 2794. Engagement to answer for obligation of another, when

deemed original. $ 2795. Acceptance of guaranty.

8 2792. Necessity of a consideration. Where a guaranty is entered into at the same time with the original obligation, or with the acceptance of the latter by the guarantee, and forms with that obligation a part of the consideration to him, no other consideration need exist. In all other cases there must be a consideration distinct from that of the original obligation. En. March 21, 1872.

Cal.Rep.Cit. 109, 221.

$ 2793. Guaranty to be in writing, etc. Except as prescribed by the next section, a guaranty must be in writing, and signed by the guarantor; but the writing need not express a consideration. En. March 21, 1872.

Cal.Rep.Cit. 111, 284; 113, 434.

$ 2794. Engagement to answer for obligation of another, when deemed original. A promise to answer for the obli. gation of another, in any of the following cases, is deemed an original obligation of the promisor, and need not be in writing:

1. Where the promise is made by one who has received property of another upon an undertaking to apply it pursuant to such promise; or by one who has received a discharge from an obligation in whole or in part, in consideration of such promise;

Where the creditor parts with value, or enters into an

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