your honor understands it, of course there is no objection.

Mr. Young: I will amend that offer by offering in addition thereto the copy of the policy which is attached to the statement of claim in this case, marked Exhibit A, the same purporting to be a correct copy of the policy which was issued to William J. White, the decedent.

Mr. Ferguson: The defendant objects because on the face of the policy the following language appears: "See copy of application inside and, if errors or omissions are found therein, note the same and return the same to the Illinois Life Insurance Company, Chicago, Illinois, for correction"-and no such application appears upon the paper offered, and no explanation for its absence is given. (2) Because it is provided in the policy that the policy shall not take effect until the first premium has actually been paid in in cash . during the lifetime and good health of the assured, and therefore the policy is not competent unless proof is given by the plaintiff that the decedent was in good health at the time Objections overruled. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

In the case at No. 388, February term, 1903, counsel for plaintiffs offer in evidence the averments of plaintiffs' statement not denied by the affidavit of defense, to wit: The plaintiff, the Fidelity Title & Trust Company, a corporation of the state of Pennsylvania, which was duly appointed by the orphans' court of Allegheny county at No. 122, November term, 1902, guardian of Gladys L. White, minor child of William J. White, deceased, claims of the defendant, the Illinois Life Insurance Company, a corporation of the state of Illinois, the sum of $2,500 upon a policy of insurance, dated October 22, 1900, with interest thereon from November 6, 1902, just ly due and payable to the plaintiff, of which claim the following is a statement: A policy of insurance, dated October 22, 1900, was duly executed and delivered by the defendant to the plaintiff's decedent on or about October 22, 1900, in consideration of the sum of $101.15 paid on said date by the plaintiff's decedent to the defendant. The plaintiff attaches hereto and makes a part hereof, marked Exhibit A, a true and correct copy of said policy of insurance. The plaintiff avers that the decedent has always, from the time of the making of the policy of insurance, a copy of which is hereto attached, marked Exhibit A, performed all things on his part to be fulfilled, according to the tenor and effect of said policy; that William J. White, the party insured for the benefit of the plaintiff herein, died November 6, 1902, in the city of Pittsburg, whilst the said policy was in force; that the plaintiffs herein did promptly furnish unto the said defendant good and sufficient proof of the death of the said William J. White; that, although hereto

fore so requested, defendant did not, and has not, paid unto the said plaintiff herein, or to any one for her, the sum of $2,500, or any part thereof, and said sum, together with lawful interest thereon is now due.

Mr. Ferguson: Defendant's counsel object, in so far as the offer of the policy is concerned, for the reasons: First, that policy contains indorsed on its face the following language: "See copy of application inside, and if errors or omissions are found therein, note the same and return the policy to the Illinois Life Insurance Company, Chicago, Illinois, for correction." That the paper produced does not contain the application, nor is there any offer to account for its absence. Second, the policy on its face provides that it shall not take effect until the first premium shall have actually been paid in cash during the lifetime and good health of assured, and no offer is made to prove the necessary fact of the good health of the assured at the time of the payment of the first premium. (Objections overruled. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

Counsel for defendant offer to show that William J. White, prior to the taking of the policies in suit, was an applicant to other insurance companies and was rejected on the ground that he was not an insurable risk; this for the purpose of showing the fact of rejection, and also showing the fact of the knowledge of the decedent.

The Court: How is that material in this case?

Mr. Ferguson: Because it tends to show that he was not in good health at the time.

Mr. Young: That offer is objected to for the reason it is incompetent, irrelevant, and immaterial, and that it shows nothing in regard to the state of the decedent's health at the time the policies in these suits were taken out. (Offer withdrawn.)

Mr. Ferguson: These depositions are offered for the purpose of showing the rejection of William J. White as an applicant for life insurance in the Mutual Benefit Life Insurance Company of Newark, N. J., to be followed by evidence that, at the time of the application to the defendant company for the insurance sued on, he represented that he never had been rejected as an applicant for life insurance.

Mr. Young: This offer and the depositions are objected to for the reason that there is nothing in these depositions to identify the William J. White dealt with in the application as the one who took out the policies in question in this case, there being no effort made to identify them as the same by means of signatures or in any other way; and for the further reason that there is nothing to show that William J. White, the decedent, ever received any notice from this company of such rejection of that application, if they were the same; and for the further reason

that there is nothing in the plaintiff's case which shows that he made any such representations as the defendant has stated.

The Court: Do you mean that there is no allegation in the affidavit of defense?

Mr. Dalzell: There is nothing on the face of the contract of insurance which is in evidence here which would invalidate it by reason of these representations which counsel now says were made to the defendant. (Objection sustained. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

It is claimed that the court erred in overruling the following offer of defendant and sustaining the exception of plaintiffs thereto: In the case of No. 388, February term, 1903, counsel for defendant offer in evidence the deposition of the same parties as in the other case, to wit: Edward L. Dobbins and James C. Young, for the purpose of showing that William J. White had made an application for insurance on his life to the Mutual Benefit Life Insurance Company of Newark, N. J., and he had been rejected by that company, this to be followed by evidence that when the application for the policy in this case was made to the defendant company, he was verbally interrogated by the examiner of the company, among other things, as to whether or not he had ever been an applicant for life insurance in any other company, in which application he had been refused, and that he answered, "No," or words to that effect; this for the purpose of showing that having undertaken to answer as to a matter material to the contract, as a preliminary thereto, he answered falsely, and for the purpose of avoiding the contract on account of such answer.

Counsel for plaintiffs object to the foregoing offer, for the reason that it is incompetent, irrelevant, and immaterial, by reason of the fact that there is nothing in the depositions to connect William J. White, the decedent, whose heirs are the plaintiffs in this case, with the William J. White who made the application to the Mutual Benefit Life Insurance Company of Newark, N. J.; and for the further reason that there is nothing in these depositions to show that William J. White, the decedent, ever received any notice of the rejection of said application; and for the further reason that the misrepresentation alleged to have been made by William J. White, the decedent, is not material to this case, under the contract. (Objection sustained. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

Mr. Ferguson: I offer to show by the witness, Dr. Ingram, upon the stand, that the time at which William J. White, the decedent, came before him as medical examiner of the company, he was interrogated by the witness verbally as to whether or not he had any disease of the kidneys, or had ever had

any such disease, and that in response to the question the decedent verbally replied that he had not; this in connection with evidence already in the case that at the time he was suffering with a disease known as Bright's disease, a serious disease, and one likely to prove fatal, and that White had knowledge of that fact; this for the purpose: First, of negativing any inference that might arise in the case that the risk upon the life of White was accepted by the insurance company with knowledge that he was suffering from any such disease; secondly, for the purpose of showing that the said White by false and fraudulent misrepresentation procured the issuing of the policies upon his life, sued on in these cases, this evidence being applicable to both cases on trial. (To which offer counsel for the plaintiffs object as incompetent generally under the statute, and particularly because it appears from the affidavit of defense in this case, and from a reference to a copy of the policy which is in evidence, that the application to this company for insurance was made in writing and filed with the company.)

The Court: This contract is in writing, and, the defendant not having put itself in position to prove a contemporaneous oral statement made at the time, the objection is sustained.

Mr. Ferguson: Would your honor let me add what is necessary to complete that offer? In connection with the foregoing offer I propose to prove by witness on the stand and others that he and the company relied upon the truth of the answers referred to in the question, and that the existence of such a disease was a material matter in relation to the contract.

The Court: The objection is sustained. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.

It is also claimed that the court erred in overruling the following offer of the defendant, and in sustaining the objections of the plaintiff thereto, viz.: "Q. Now, doctor, did you have any conversation with him as to whether or not he had ever withdrawn an application for insurance upon his life in any other companies than yours, or whether he had ever made application for insurance upon his life to any other company, which had declined or refused to issue him a policy?" (Objected to as incompetent. Objection sustained. To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

Mr. Ferguson: I now propose, in view of the fact that the plaintiff has been permitted to interrogate beyond the direct examination of this witness, as to the portion of the examination undergone by W. J. White, to offer in evidence Exhibit No. 1, and then call witnesses to prove the falsity of the various answers referred to in the affidavits of de

fense, and already referred to in offers of evidence in the case. (Objected to as incompetent.)

The Court: We certainly would not admit any such offer as that, because, as the court understands its rulings, the witness has not been interrogated on cross-examination beyond direct examination. The objection is sustained. (To which ruling counsel for defendant request an exception. Exception allowed, and bill sealed.)

Verdict and judgment for plaintiff for $5.670. Defendant appealed.

Argued before MITCHELL, C. J., and FELL, BROWN, MESTREZAT, POTTER, ELKIN, and STEWART, JJ.

J. S. Ferguson, E. G. Ferguson, and Henry W. Price, for appellant. William S. Dalzell and Edwin P. Young, for appellees.

STEWART, J. This was an action on a policy of insurance issued by the defendant company on the life of William J. White, brought by plaintiff, as guardian of the minor children of the insured. The assignments of error relate to the admission, rejection, and sufficiency of evidence. They include nothing beyond. On the trial, the first offer on the part of the plaintiff, was so much of the statement filed in the case as was not denied in the affidavit of defense. This included the specific averments that the policy of life insurance in the sum of $5,000 had been issued by the Illinois Life Insurance Company, the defendant, October 15, 1900; that the premium on this policy had been paid up to November 6, 1902, the date of the death of the insured; that proofs of death were made to the company as required by the terms of the policy; and that the policy had not been paid. The offer was subsequently enlarged so as to include the policy itself. The grounds of objection to this offer were: (1) That on the face of the policy the following language appears, "See copy of application inside and if errors or omissions are found therein note the same and return the same to the Illinois Life Insurance Company, Chicago, Illinois, for correction," and no such application appears upon the paper offered, and no explanation for its absence is given. (2) Because it is provided in the policy that the policy shall not take effect until the first premium has actually been paid in cash, during the lifetime and good health of the insured, and therefore the policy is not competent unless proof is given by the plaintiff that the decedent was in good health at the time. Although unimportant in this immediate connection, it may be well to state here that it was at no time alleged that the application referred to had been fraudulently suppressed, or had in fact ever been issued. The fact seems to be that it was originally omitted from the policy by mistake.

With respect to the first objection: The policy of insurance was the basis of the ac

tion, and the statement contained an express averment that the copy filed was a true copy of it, and that the insured in his lifetime had performed the conditions and covenants stipulated in said instrument or contract of insurance. The affidavit of defense admitted the issuing of the policy and the contract of insurance as set out in the statute, but alleged, as matter of defense, that the insured had procured the policy to be issued by fraudulent misrepresentations. The affidavit contains no denial, either express or by implication, that the policy was the contract of insurance, and the entire contract. The supplemental affidavit, made by the same officer who made the original, merely averred that the affiant did not know, at the time the original affidavit was made, that the copy of the insured's application was not filed with the copy of the policy. This left the policy as free from objection, as matter of evidence, as any other of the undenied averments of the statement. The printed notice on the policy, directing attention to the copy of the application inside, did not affect in any way the admissibility of the policy in evidence; nor was the plaintiff bound at this stage of the case to explain the absence of the application. The court below was not called upon in this inquiry to decide what effect the notice on the face of the policy had upon the rights of the parties themselves, or whether, being there, it imposed any particu lar duty upon the insured. Nor are we now; the question being as to the admissibility of the policy in evidence. Inasmuch as it was admitted by the pleadings to be the contract of the parties, there is no rule of evidence by which it could have been excluded.

As to the second ground of contention: Even though, as contended, a payment by the insured of the first premium while in good health was a condition precedent, and the contract of insurance dependent upon its fulfillment, the admission by defendant of the facts set out in the statement, that the insured had performed all things on his part to be fulfilled, the policy, as a matter of evidence, stood clear of all such objection as that urged.

The fourth assignment relates to the rejection of evidence offered on behalf of the defendant. The offer was to show the rejection of William J. White as an applicant for life insurance in the Mutual Benefit Life Insurance Company, of Newark, N. J., to be followed by evidence that, at the time of the application to the defendant company, for the insurance sued for, he represented that he had never been rejected as an applicant for life insurance. Were there nothing more to justify the ruling of the court in rejecting this offer, the fact that it was not proposed to show the identity of the William J. White referred to with the insured in this case would be quite sufficient. This was the answer made when the objection was stated and the fact that no amendment of the offer

in this regard was proposed shows that the omission of this from the offer was not accidental. The evidence was properly rejected.

Defendant's next offer was to show by the medical examiner of the company that, when the insured was examined by him before the policy issued, he was interrogated orally as to whether or not he had any disease of the kidneys, or whether he had ever had any such disease; and that the insured replied orally that he had not. This offer was, in connection with the evidence already in, for the purpose of negativing any inference that might arise in the case that the risk upon the life of the insured was accepted by the company with the knowledge that the insured was suffering with kidney disease, and also for the purpose of showing that the insured had procured the policy issued to him by false and fraudulent misrepresentations as to his physical condition; such misrepresentations relating to a material fact relied on by the defendant. This offer conflicts directly with the act of May 11, 1881 (P. L. 20), relating to life and fire insurance policies. It is there provided that the application shall not be considered a part of the policy or contract between the parties, unless a correct copy of such application be attached to the policy; and the application in this case was not attached. In the affidavit of defense it was admitted that a written application had been made, in which the very thing here proposed to be shown was inquired of, and written answers in response obtained from the insured. It is to make the act of no effect to say that it excludes the paper being considered a part of the contract between the parties, but allows proof of what it contains for that very purpose; not only so, but it reverses the established order of proof that always regards the written document as the first and best evidence of the contract, and excludes all others until the writing be introduced, or its absence accounted for. There was no error in the rejection of the evidence.

What we have said applies equally well to the seventh and eighth specifications, which relate to the exclusion of evidence, the purpose of which was, in one case, to introduce the contents of the application paper, and, in the other, the paper itself, or so much of it as is entitled "medical examiner's report," containing questions and answers of the insured relating to his physical condition. The case as tried presented a single issue of fact. One of the terms expressed in the policy was that it was not to take effect until the first premium had actually been paid in cash during the lifetime and good health of the insured. It was admitted by the pleadings that all the premiums had been paid, but it was attempted to be shown that, when

the first premium was paid, the insured was suffering from the malady that finally terminated his life. In this connection, to negative the inference that defendant had waived this condition in the policy, and for this purpose only, defendant was allowed to introduce the insured's application, showing that he there had represented himself as free from such disease. Defendant's case on this point rested largely upon the testimony of Dr. Asdale, who was the physician of the insured. He testified that from the examination made by himself of the insured's urine, shortly before the policy was issued, he was satisfied that the insured was the victim then of Bright's disease, from which he died two years later; that this disease was progressive and incurable. The testimony of Dr. Ingram, the medical examiner of the defendant company, the only additional witness, was of little value, since it was not shown with that degree of certainty that the case required that the urine he examined, and which he considered, showed sure indications of Bright's disease, in the person who voided it, was the urine of the insured. Dr. Asdale had sent it to this witness by the hand of his son, and could Inot tell whether he himself had received this particular specimen from the insured or whether it was one of several specimens that had been given him by those in charge of his office, during his absence, and which was represented to him as having been left there by the insured for examination. It will be seen that defendant's case upon this point rested almost entirely upon the testimony of Dr. Asdale. The case where an assault of this kind could be met by counter expert testimony would be rare indeed, and it is not surprising that the plaintiff could only meet it by testimony going to the apA single witparent health of the insured.

ness was called on behalf of the plaintiffthe employer of the insured-who testified to close and intimate relations with the insured, over a long period of years, continuing until the date of his death. He testified that at the time inquired of the insured's health was good, and that he continued to attend to his duties at the college where he was employed until a day or two before his death, stating clearly the opportunities he had of knowing the insured's daily condition during all that period. This conflicting testimony was submitted to the jury in an impartial charge, which should have been entirely adequate, addressed to a jury of ordinary intelligence. The submission was a matter of course, and the finding of the jury in favor of the plaintiff was a conclusion that cannot now be disturbed.

All the assignments of error are overruled, and the judgment is affirmed.

(213 Pa. 450)

BOSWELL v. BUHL et al. (Supreme Court of Pennsylvania. Jan. 2, 1906.) CORPORATIONS-STOCKHOLDERS' AGREEMENT—

CONSTRUCTION.

Where stockholders of a corporation agreed that, if any stockholder desired to sell his stock, he must offer it to the holders of the balance of the stock at a cash price to be determined by the holders of a majority of the stock, at which price they might buy it and distribute it among the various stockholders in proportion to the amount of their holdings, etc., two stockholders could not dispose of their stock to other stockholders in such a manner as to exclude one stockholder from obtaining a portion of the stock; but each of the selling stockholders was entitled to share in the stock which the other proposed to sell.

Appeal from Court of Common Pleas, Allegheny County.

Action by George B. Boswell against Boggs & Buhl, a corporation, and others. From a decree dismissing the bill, plaintiff appeals. Reversed.

Argued before MITCHELL, C. J., and FELL, BROWN, MESTREZAT, POTTER, ELKIN, and STEWART, JJ.

William B. Rodgers and Edwin S. Craig, for appellant. John S. Ferguson and Ed. G. Hartje, for appellees.

MESTREZAT, J. The validity of the contract involved in this controversy has not been attacked, nor is any question raised by the pleadings as to the jurisdiction of the court below. We may say, however, that, under our decisions, the circumstances of the case fully warrant a court of equity in assuming jurisdiction. The rights of the parties depend upon the construction of their agreement, and that is the controlling question involved in this litigation.

The contract is dated April 20, 1899, and was signed by the holders of all the common stock of the corporation. By its charter and by-laws the holders of the common stock have the control and management of the affairs of the corporation. The agreement recites this fact, and, further, that the parties thereto are actively engaged in the business of the corporation and are holding positions of trust and responsibility in its management, and that "it is deemed advisable by the parties hereto that the common stock of said corporation shall be held and owned only by those actively engaged in its management, either as officers or directors, or holding positions of trust and responsibility under said officers, or by parties entirely acceptable to the holders of the majorty of said stock." The parties then agree "to accept and do hereby purchase the said shares of common stock set opposite their respective names, upon the following terms and conditions." These terms and conditions are: (a) If a holder of stock ceases to be a desirable associate or voluntarily resigns his position, the holders of a majority of the stock may appraise and purchase his stock, which "shall be divided

or distributed among the holders of said common stock in proportion to the amounts of stock held by each." (b) If the holder of any stock desires to sell it, he must first offer it to the holders on the balance of the stock at a cash price to be determined by the holders of a majority of the stock, at which price they may buy it, "and distribute same among said holders in proportion to the amount of their respective holdings," and, if they refuse to purchase it at the price, the owner may sell it in open market. (c) The common stock "shall be under the control of and subject to the vote or decision of the majority of said stock." Russell H. Boggs and Henry Buhl, Jr., each proposed to sell 750 shares of his common stock to five of the other holders of the stock, not including Boswell, the plaintiff. The latter then filed this bill to restrain both Boggs and Buhl from selling and transferring, and the other defendants from purchasing, the stock, "other than in the manner and upon the terms provided for in the agreement." The plaintiff avers in his bill that by the terms of the agreement "the common stock which they (Boggs and Buhl) proposed to transfer should first be offered to all of the holders of the balance of the common stock, except the said Russell H. Boggs and Henry Buhl, Jr., at a cash price to be determined upon by the holders of a majority of said common stock." Under his construction of the contract, the plaintiff claims to be entitled to 924 of the 1,500 shares of stock proposed to be transferred by Boggs and Buhl. On the other hand, the defendants contend that, under a proper interpretation of the contract, Boggs and Buhl may sell the stock to any of the present holders of common stock without being required to first offer it to all of them, and that they were only required to offer the stock to all the balance of the holders of stock before they could sell to an outsider. The court sustained the position of the defendants and dismissed the bill.

We have no doubt that the purpose of R. H. Boggs and Henry Buhl, Jr., in proposing to sell a part of their holdings to the smaller shareholders of the common stock, was, as suggested by them, to insure the success of the corporation and to increase the value and earning power of all of the common stock. Acquiring and holding the additional stock would unquestionably be a strong incentive to the smaller shareholders to increase their efforts in behalf of the corporation, and would, no doubt, secure from them greater activity in advancing the common interests of all the holders of the stock. But the purpose thus sought to be accomplished by Mr. Boggs and Mr. Buhl was precisely the purpose which all the parties had in view when they signed the contract of 1899, under which they hold the common stock. They all then thought that the enforcement of the terms and conditions set forth in that instrument would result to the mutual benefit and ad