Error from Ellis County Court; J. C. Lumpkins, Judge.

Action by J. D. Keiningham against the Indiana & Ohio Live Stock Insurance Company. Judgment for plaintiff, and defendant brings error. Affirmed.

Wm. Thompson and John S. Patterson, both of Dallas, for Plaintiff in Error.

Will Hancock, W. H. Fears, and Supple & Harding, all of Waxahachie, for Defendant in Error.

STATE vs. MASSACHUSETTS BONDING & INS. CO.*

In an action upon a bond written by a corporation engaged in the business of furnishing surety for compensation, the rules of strict construction which usually control in cases of accommodation sureties will not be applied, and if the bond is fairly open to two constructions, one of which will uphold and the other defeat the claim of the insured, that which is most favorable to the insured will be adopted. But where there is no ambiguity, the plain intention of the parties cannot be disregarded or nullified by construction.

(For other cases, see Principal and Surety, Cent. Dig. §§ 103, 1032; Dec. Dig. § 59.)

2. STATES-PUBLIC BUILDING CONTRACT-CONSTRUCTION OF SURETY BOND-DEFENSES-"O. K.”

A contract entered into between the State of Kansas and a construction company for the erection of a building provided that the state architect should make a certified estimate each month of the value of all labor and material used that month in the construction, and that the state would pay to the contractor ninety per cent thereof; that no payments should be made except on his certificate that the work for which the payment was due had been properly done. A surety company guaranteed the faithful performance of the contract on the part of the construction company, and by reference the contract was made a part of the bond. The bond also contained the following provision: "If the payments are not made promptly in accordance to contract, this bond becomes null and void." During the progress of the work the construction company abandoned its contract and the state had the work completed by another contractor. In an action on the bond it is held:

(a) That the rights of the parties are not affected by the fact that the architect was a state officer. In making the estimates he was not acting as a state architect but as an individual.

(b) The parties agreed upon the architect as the person upon whose judgment and decision with respect to the character, amount, and value

* Decision rendered, Dec. 6, 1913. 136 Pac. Rep. 905. Syllabus by the Court.

of the work payments were to be made. In the absence of fraud or mistake, they are bound by his judgment and decision.

(c) Upon the facts stated in the opinion, if the architect in making the certificates acted in good faith in relying upon information from others as to the extent of the work and the amount of labor and material that had been used, the terms of the contract in this respect were satisfied.

(d) Some of the certificates were prepared by other persons and were indorsed by the architect, "O. K." The employment of the abbreviation or symbol of "O. K." in such a transaction is in accordance with common usage and was a sufficient certificate of the correctness of the estimate upon which it was endorsed.

(e) The state is not estopped from maintaining an action to recover upon the bond because before making the payments it failed to take the precaution to see that the estimates were true and correct, nor by the fact that the estimates certified by the architect included labor and material which had not in fact been used in the construction of the work, but which had been furnished when the estimates were made. (For other cases, see States, Cent. Dig. § 98; Dec. Dig. § 101.) (For other definitions, see Words and Phrases, vol. 5, p. 4871; vol. 8, P. 7735.)

Appeal from District Court, Shawnee County.

Action by the State against the Massachusetts Bonding & Insurance Company, a corporation. Judgment for plaintiff, and defendant appeals. Modified.

McClintock & Quaint, of Topeka, McCune, Harding, Brown & Murphy, of Kansas City, Mo., and Chas. Blood Smith, of Topeka, for Appellant. J. S. Dawson, Atty. Gen., and S. N. Hawkes, Asst. Atty. Gen., for the State.

LIFE.

UNITED STATES SUPREME COURT.

OCTOBER TEKM.

ÆTNA LIFE INSURANCE COMPANY, Petitioner,

VS.

JOHN T. MOORE, Administrator of John A. Salgue, Deceased.**

INSURANCE UNTRUE STATEMENTS IN APPLICATION GOOD FAITH OF INSURED.

1. Variations from the truth in the statements made by the insured in his application for life insurance, which are by the policy expressly made the basis of the insurance contract, will, under the construction given to Ga. Code, §§ 2479, 2480, by the courts of that state, avoid the policy if such untruths are such as change the nature, extent, or character of the risk, whether they are made in good faith, without knowledge of their untruth, or are made fraudulently or wilfully.

(For other cases, see Insurance, Cent. Dig. §§ 540, 549; Dec. Dig. § 256.)

APPEAL AND ERROR-PREJUDICIAL ERROR-REFUSING INSTRUCTION.

2. Error in refusing to instruct the jury in an action on a policy of life insurance that untrue answers in the application, if material, avoid the policy, regardless of the good faith of the insured calls for the reversal of a judgment entered on a general verdict against the insurance company, where the evidence as to the untruthfulness of the answers is conflicting, since the verdict being general, it is not possible to say what view the jury took of the conflict, or that it was necessary to resolve it in view of the charge of the court or how they would have resolved it if the instructions requested had been given. (For other cases, see Appeal and Error, Cent. Dig. §§ 4219, 4221-4224; Dec. Dig. § 1064.)

INSURANCE-UNTRUE ANSWER IN APPLICATION-APPLICATION FOR OTHER INSURANCE.

3. The answer "no" to the question in the insured's application for life insurance whether any proposal or application to insure his life was pending in another company, or, if made, had not been granted, calling for particulars and the names of all such companies, associations, or agents, is such a variation from the truth as changes the nature, extent, and character of the risk, and therefore, under Ga. Code, §§ 2479, 2480, avoids a policy which makes the statements in the application the basis of the insurance contract, where, having made an application for insurance to the local agent of another company, whose medical examiner refused to pass him, the insured had withdrawn the application on the advice of such agent before it reached the insurance company. (For other cases, see Insurance, Cent. Dig. § 679; Dec. Dig. § 300.) * Argued Nov. 3, 1913. Decided Dec. 22, 1913. 34 Sup. C. Rep. 186.

Vol. XLIII.-21

INSURANCE-ESTOPPEL OF INSURER-KNOWLEDGE OF LOCAL AGENT.

4. Knowledge of the actual conditions and circumstances by the local agent who prepared the application for a policy of life insurance will not estop the insurance company from enforcing a condition rendering the policy void if material untrue statements are made in such application, where it was expressly agreed between the parties that "no statement or declaration made to any agent, examiner, or other person, and not contained in" the application, should "be taken or construed as having been made to or brought to the notice or knowledge of" the company, "or as charging it with any liability by reason thereof," and the insured specifically expressed his understanding to be that the company or one or more of its executive officers and no other person, could grant insurance or make any agreement binding upon the company.

(For other cases, see Insurance, Cent. Dig. §§ 968-997; Dec. Dig. § 378.) COURTS-RULES OF DECISION-FOLLOWING DECISIONS OF STATE COURTS.

5. The question as to the effect of the knowledge of the local agent upon the right of a life insurance company to insist upon a condition rendering the policy void if material untrue statements are made in the application is one of general jurisprudence, upon which the Federal courts are not controlled by the decisions of state courts.

(For other cases, see Courts, Cent. Dig. §§ 950, 952, 955, 969-971; Dec. Dig. § 365.)

On Writ of Certiorari to the United States Circuit Court of Appeals for the Fifth Circuit to review a judgment which affirmed a judgment of the Circuit Court for the Southern District of Georgia in favor of plaintiff in an action on a policy of life insurance. Reversed and remanded for a new trial.

The facts are stated in the opinion.

Messrs. A. L. Miller, M. D. Jones, George S. Jones, Walter Defore, Wallace Miller, and Chas. H. Hall, Jr., for Petitioner.

Messrs. Minter Wimberly, Jesse Harris, and Alexander Akerman, for Respondent.

MCKENNA, J., delivered the opinion of the court. Action on a life insurance policy for $6,000, issued upon the life of John A. Salgue, the intestate of respondent. It was tried to a jury, resulting in a verdict and judgment for respondent. The judgment was affirmed on writ of error to the Circuit Court of Appeals by a per curiam opinion. This certiorari was then granted.

The questions in the case are based on certain statements made by Salgue, which, it is contended by petitioner (herein called the insurance company), became a part of the policy and constituted warranties.

The following are the material provisions of the policy and the application:

"This policy of insurance witnesseth: That the Etna Life Insurance Company, in consideration of the statements, answers, and warranties contained in or indorsed upon the application for

this policy, which application is copied herein and made a part of this contract, and in further consideration of the annual premium * * * hereby insures the life of John A. Salgue ***. "This policy is issued and accepted subject to the conditions, provisions, and benefits printed on the reverse of this page, which are hereby referred to and made a part hereof. *

* *

"Conditions, provisions, and benefits which are made a part of this policy:

"Section 1. This policy shall not take effect until the first premium hereon shall have been actually paid during the lifetime and good health of the insured.

* *

*

"Section 7. All agreements by said company are signed by one of its executive officers. No agent or other person not an executive officer can alter or waive any of the conditions of this policy, or make any agreement binding upon said company." Copy of the application:

"Being desirous of insuring my life with the Ætna Insurance Company, I do hereby declare and warrant that I am in good health, of sound body and mind, and that the following statements signed by me are full, correct and true; and that I have no knowledge or information of any disease, infirmity, or circumstance not stated in this application which may render insurance on my life more hazardous than if such disease, infirmity, or circumstance had never existed; and I do hereby agree that the declarations and warranties herein made, and the answers to the following questions, together with those signed by me on the second page of this application, shall be the basis and form part of the contract (or policy) between me and the said company, and that if the same be in any respect untrue, said policy shall be void; and I further agree that the insurance hereby applied for shall not be binding upon said company until a policy has been issued, nor until the amount of premium as stated therein has been received by said company, or its authorized agent, during my lifetime and good health, and a receipt given therefor, signed by an executive officer of said company; and I further agree that no statement or declaration made to any agent, examiner, or other person, and not contained in this application, shall be taken or considered as having been made to or brought to the notice or knowledge of said company, or as charging it with any liability by reason thereof; and I understand that all policies and agreements made by the said Ætna Life Insurance Company are signed by one or more of its executive officers, and that no other person can grant insurance or make any agreement binding upon said company."

The application also contained questions addressed to the insured by the examining physician, and the answers by him, among others, as follows:

"14. What are the names and residences of all the physicians