basis of the contract. The defendant was not called upon to anticipate a claim which had not been pleaded; the plaintiff alleged the making and delivery of the contract set forth as a part of the complaint, and she has been permitted to recover upon an entirely different theory-upon the theory that some other and different contract was made. The principle still remains that the judgment to be rendered by any court must be "secundum allegata et probata;" and this rule cannot be departed from without inextricable confusion and uncertainty and mischief in the administration of justice. Parties go to court. to try the issues made by the pleadings, and courts have no right impromptu to make new issues for them, on the trial, to their surprise or prejudice, or found judgments on grounds not put in issue, and distinctly and fairly litigated. Wright vs. Delafield, 25 N. Y. 266, 270. No suggestion is made in the pleadings of a waiver on the part of the defendant; the contract is pleaded as it stands, with the alleged answers of the insured constituting a part of the contract, and the court has permitted the plaintiff to recover upon the theory that the defendant, through its agent, has waived this part of the contract, because of the alleged knowledge of these agents that the answers were not true. Such proof was clearly inadmissible, and there was error in receiving the same over the objection of the defendant. Garlick vs. Metropolitan Life Ins. Co., 109 App. Div. 175, 95 N. Y. Supp. 645.

[2] We are of the opinion that the court erred in refusing to charge, as requested, that:

"If the jury believe the statements of the plaintiff and her witnesses that the insured or the plaintiff disclosed to the soliciting agent or soliciting agents of defendant the true state of his health and physical condition before going before the medical examiner, or of his having been an inmate of Craig Colony for epilepsy, such evidence is not binding on the defendant, and any such notice or information as to the health or physical condition of the insured given to such soliciting agents is not knowledge chargeable to the defendant."

There can be no doubt that under a proper pleading it might be shown that the medical examiner had failed to report correctly the answers given him upon the examination, and that such answers were in fact truly made, and such a mistake or fraud would be chargeable to the defendant, but that the knowledge of mere soliciting agents, who have nothing to do with the issuing of the policy or with the inquiry into the physical condition of the insured, is notice to the company, is not supported by reason or authority. Notice to an agent is not notice to the principal unless the agent's knowledge is acquired in connection with his acts as agent, and it clearly appears in this case that the soliciting agents were not called upon to know anything of the physical condition of the applicant; all inquiries in this regard

being made by the medical examiner. This is clearly the doctrine of the court in Butler vs. Michigan Mutual Life Insurance Co., 184 N. Y. 337, 77 N. E. 398, and the defendant was entitled to have the law stated to the jury, though the error of admitting the testimony could not have been cured by the charge if made as requested. The refusal of the court merely emphasizes the original error.

It is clear that Thomas P. Gorman was not a legitimate risk at any time involved in this transaction; the contract could not have been consummated without operating as a fraud upon the defendant, and, while it is probably true that the defendant would be liable if the fraud was perpetrated by the medical examiner, the pleadings in this case did not, and do not now, open the way for any such proof. The cause of action alleged assumes a legitimate policy just as it stands, and the proof offered shows that the policy pleaded never had any existence, accepting the plaintiff's own version, for the insured made none of the answers which are accredited to him, and he has not performed the conditions precedent to the issuing of the policy on which the action is predicated.

The judgment and order appealed from should be reversed, and a new trial granted, with costs to the appellant to abide the event. All concur.

COURT OF APPEALS OF KENTUCKY.

NEW YORK LIFE INS. CO.

VS.

CONNER.*

1. INSURANCE-WAIVER OF FORFEITURE-FAILURE TO CANCEL POLICY.

A life insurance policy provided that, upon default of the payment of a premium or interest on any debt, the policy should automatically continue as term insurance for one month and then automatically become paid-up insurance for a specified amount. The company made a loan to the insured receiving the policy as collateral security, and the insured defaulted in the payment of the next premium. The note and policy were retained by the company, and no notice was sent to the insured, and no indorsement made upon the policy until one month after the death of the insured and six months after default was indorsed on the policy and it was mailed to the insured; the company being ignorant of his death. Held, that neither the failure of the com* Decision rendered, Nov. 14, 1913. 160 S. W. Rep. 491.

pany to take action prior to the death of the insured, nor the subsequent indorsement upon the policy, constituted a waiver by the company of the provisions of the policy, and it was liable only for the excess of the paid-up insurance over the amount of the loan.

(For other cases, see Insurance, Cent. Dig. §§ 194, 936, 939; Dec. Dig. § 368.)

2. INSURANCE PAYMENT.

WAIVER OF FORFEITURE

DEMAND FOR

A provision of a life insurance policy for forfeiture for nonpayment of a premium note may be waived by the company's retention of the note and making an unconditional demand for the payment thereof. (For other cases, see Insurance, Cent. Dig. §§ 1041-1056, 1058-1070; Dec. Dig. § 392.)

Appeal from Circuit Court, Jefferson County, Chancery Branch, First Division.

Action by Florence M. Conner against the New York Life Insurance Company. Judgment for the plaintiff, and defendant appeals. Reversed and remanded.

Keith L. Bullitt, of Louisville, James H. McIntosh, of New York City, and Bruce & Bullitt, of Louisville, for Appellant. D. A. Sachs, Jr., of Eminence, and M. A., D. A. & J. G. Sachs, of Louisville, for Appellee.

CLAY, C.

On June 27, 1904, the New York Life Insurance Company issued to Lounett Thomas Conner a policy of insurance, insuring his life in favor of his wife, Florence M. Conner, in the sum of $3,000. Lounett Thomas Conner died November 23, 1911. Plaintiff, Florence M. Conner, brought this action to recover on the policy. A demurrer was sustained to the amended answer of the defendant, and judgment rendered in favor of plaintiff for the amount of the policy, less the indebtedness thereon, and the amount of the premium due June 27, 1911. Defendant appeals. The annual premium on the policy was $128.37. All the premiums up to and including that for the year 1910 were paid. On about April 1, 1911, the insured borrowed from the defendant the sum of $525. To secure the payment of this indebtedness, he deposited the policy of insurance with the company as collateral security. The policy provides as follows: "If any premium or interest is not paid on or before the date when due, after the policy has been in force two full years, and if there is an indebtedness to the company, insurance for the net amount that would have been payable as a death claim immediately before such due date, will automatically continue from such due date, as Term Insurance for one month; if the policy is not restored within said month as herein provided, the insurance will thereafter automatically become a paid-up insurance for an amount payable to the designated beneficiary only in event of death of the insured before the end of the accumulation period, and for the amount of cash payable to

the insured at the end of the accumulation period only if then living, such amounts to bear the same proportion to the amounts stated in column 2 and column 3, respectively, of the table on the second page, as any excess of the reserve under this policy calculated according to the American Table of Mortality with interest at 42 per cent over such indebtedness, bears to the reserve itself."

The premium due in advance on June 27, 1911, was not then paid, nor was any note executed for it, nor any arrangement of any kind made by the insured with reference thereto. No demand was made on the insured for the payment of that premium, nor did any communication pass between him and the company. At the time of the death of the insured on November 23, 1911, the premium due on June 27, 1911, had not been paid nor had any portion of the indebtedness of $525 on the policy been paid. The value of the paid-up insurance available on the policy on June 27, 1911, was $738. The reserve under the policy was $567. The excess of the reserve over the indebtedness was $42. The proportionate amount of paid-up insurance payable to the beneficiary in the event of the insured's death before the end of the accumulation period was $54.60. The foregoing facts appear from the answer of the defendant. By amended answer the company alleged that upon the failure of the insured to pay the premium on June 27, 1911, and upon his failure to restore the policy within 30 days thereafter, it thereupon treated and considered the policy lapsed, subject to the insured's right to automatic paid-up insurance; that on December 29, 1911, the company, in ignorance of the death of the insured, mailed the policy to him, and, in order to call his attention to his nonforfeiture rights, made upon the policy the following indorsement: "In accordance with the terms of the loan agreement of the 1st of April, 1911, and on account of the default of the payment of the June 27, 1911, premium and loan interest, this policy is continued for the reduced amount of $54.60 for a term of 13 years from June 27, 1911, to June 27, 1924, with a cash payment of $41.00 at that date if insured is then living. New York, Dec. 29th, 1911."

[1] It will be observed that the policy contract provides that if any premium or interest is not paid on or before the date when due after the policy has been in force two full years, and there is an indebtedness to the company, insurance for the net amount that would have been payable as a death claim immediately before such due date will automatically continue from such due date as term insurance for one month. But if the policy is not restored within that month, as provided by the contract, the insurance will thereafter automatically become a paid-up insurance for a certain. amount. Indeed, the contract is substantially the same as section 659, Kentucky Statutes. In the present case there was an indebtedness against the policy, and the insured defaulted in the payment of the premium due June 27, 1911. The policy was not

restored within a month after the default. Therefore the policy was automatically converted into paid-up insurance unless this provision of the contract was waived by the company. In sustaining the demurrer to the company's answer, the trial court proceeded on the theory that although the policy provided for automatic paid-up insurance for a reduced amount, the fact of the company's having deemed it necessary to make an indorsement on the policy to that effect would indicate that so far as the company's rights were affected the change was not to be an automatic one, but at its election, and not having made this election when it was due, to wit, July 29, 1911, or at any time prior to the date of indorsement, to wit, December 29, 1911, which was more than five months after the election should have been made and more than one month after the insured died, such contract on the part of the company was sufficient to constitute a waiver of the provisions of the policy relied on. In support of this position we are cited to the case of New York Life Insurance Co. vs. Evans, 136 Ky. 391, 124 S. W. 376. In that case the facts were these: The policy provided that, in case of lapse for nonpayment of premium, "a paid-up policy will be issued on demand," etc. The insured, in part payment of the premium, on April 20, 1904, executed a note payable on October 20, 1904. The note was not paid at maturity. The company retained the note and wrote the insured a number of letters urging reinstatement. In addition to this, several witnesses testified that in some of the letters the company demanded payment of the note. The insured mailed to the company on January 19, 1905, a check for the amount of the note, and the company cashed the check and held the proceeds pending the receipt of the health certificate and application for reinstatement. The insured died January 20, 1905. The company denied liability for the face of the policy on the ground that the policy had lapsed for nonpayment of the premium note when the same fell due, and insisted it was liable only for the amount of paid-up insurance provided for in the nonforfeiture clause of the policy. The beneficiary contended that, by urging the payment of the note and holding it as a subsisting obligation of the insured, the company indicated an intention to waive the failure of the insured to pay the note promptly when due. The judgment was reversed because of error in the instructions, but the court held that there was some evidence of a waiver, and remanded the case for a new trial upon the issue whether or not the company, by its conduct, indicated an intention to waive the payment of the note.

[2] That case did not extend the waiver doctrine, but simply applied the old rule in force that, where a provision in an insurance policy provides for the lapse of the policy for nonpayment of a premium note, the provision may be waived by the insurer's retention of the note and making an unconditional demand for payment. Limerick vs. Home Insurance Co., 150 Ky. 827, 150