agent none the less knew of his own knowledge that such answers were not truthful.

To safeguard and protect themselves from the assertion of such claims, companies have quite universally inserted in their policies of insurance a provision somewhat similar in tenor to the following:

"The agent taking this application has no authority to make, modify or discharge contracts or to waive any of the company's rights or requirements, and no other agent or person except the president, the vice-president, the secretary and the treasurer of the company has such authority."

With the same idea in mind, companies also at one time quite generally inserted in their policies a provision that the representative, agent and medical examiner, or other person, shall not be the agent of the company, but solely the agent of the insured for the purpose of completing the application. However, to preclude the company from making such provisions, most states have provided by statute that an agent who solicits insurance, etc., is to be regarded as an agent of the company and not of the insured. Insurance companies, therefore, have been denied the liberty of making any provision regarding such matters except in so far as the provision against modification and waiver may be held to be a safeguard, and we shall see that as far as most state courts are concerned, regarding matters in connection with facts contained within the application relative to the applicant's insurability, such a provision is a redundant waste of printer's ink.

It is not the purpose of this paper to enter into a consideration of what constitutes fraud in procuring a life insurance policy, but to limit the discussion to the federal and state decisions applicable to the general situation we have just instanced, and what protection, if any, the company has received from faithless and dishonest agents, who presumably for the sake of the commission they will derive from the transaction will mislead and deceive either the insured or the company, or both.

While the rule of the state courts upon this question appears to be reasonably well known to the profession, yet the fact that the rule of the federal courts upon this question is almost diametrically opposed and contradictory to that adopted by the state courts does not seem to be fully appreciated.

HISTORY OF THE FEDERAL RULE

The doctrine of the federal courts was not arrived at overnight, but is the result of a gradual change in viewpoint rather than, as has often been the case where the Supreme Court has reversed its opinion, because of a shifting in the personnel of the court.

The rule of the federal courts upon this subject originally was to the same effect as the present weight of authority prevailing among the state courts and, in fact, most of the state courts rely upon and quote with approval the earlier expressions of the Supreme Court upon this subject. Thus in Insurance Co. v. Wilkin son, decided in 1872, where an action was commenced on a policy of insurance and the insurance company defended the case on the theory that certain answers relating to the age of the mother of the insured and the cause of her death were false, the insured was permitted in the lower court to prove that the agent of the insurance company, who took down the answers of the applicant and his wife to all the interrogatories, was told by both of them that they knew nothing about the cause of the mother's death or her age at the time; that the wife was too young to know or remember anything about it and the husband had never known her, but that there was present, at the time the agent was taking the application, an old woman who said she had knowledge on that subject, and that the agent questioned her for himself and from what she told him he filled in the answer, which is now alleged to be untrue, without its truth being affirmed or assented to by the plaintiff or the wife. To the introduction of the oral testimony regarding the action of the agent the insurance company excepted and assigned in the Supreme Court the ruling of the trial court as error on the ground that it permitted the written contract to be contradicted. Mr. Justice Miller, in a lengthy opinion, concurred in by the entire court, decides that insurance companies clothe their representatives with every appearance of being the full and complete representative of the company and that the applicants with whom these agents do business are, therefore, fully warranted in regarding the agent as possessing power to advise the applicant as to the manner in which the application should be completed; that the effect of such a doctrine is not to admit oral testimony to vary or contradict that which is in writing, but proceeds upon the theory that the writing offered in evidence was not the instrument of the party whose name was signed to it; that it was procured under such circumstances by the 4. 13 Wallace 222, 20 Law ed. 617.

other side as estops that side from using it or relying on its contents, not that it may be contradicted by oral testimony, but that it may be shown by such testimony that it cannot lawfully be used against the party whose name is signed to it.

In view of the later decisions of the court upon this subject it is significant to observe that, while the court in the course of its opinion shows that prima facie the powers of the insurance agent are co-extensive with the business entrusted to his care and will not be narrowed by limitations not communicated to the persons with whom he deals, yet it did not state what notice would constitute a sufficient communication of a limitation upon the powers of the insurance agent. It is on this account and the absence of any comment in either the statement of facts or the language of the opinion that there was anything in the application which conveyed any notice of the limitation of the powers of the agent soliciting the insurance that we can perhaps reconcile this opinion with the almost contradictory trend of the later cases decided by the same court upon this subject.

In American Life Ins. Co. v. Mahone, decided three years after the Wilkinson case (1875), where the general nature of the defense to an action on a policy of insurance was that the policy had been issued on the faith of false and fraudulent representations made by the insured and where it appeared that none of the answers was written by the insured, although he signed his name at the foot of them all, but were written by the agent of the company"and as he (the agent of the company) testified, read over to the insured, who then signed them and immediately thereafter signed a declaration filled out by the agent which was in effect an agreement that if the said proposals, answers and declarations returned to the company should be found fraudulent or untrue in any respect or if there should be any wilful misrepresentation or concealment in said declaration, the policy should be void"

the beneficiary was permitted, against the objection of the defendants, to call a witness and prove by him that true and correct answers were given to the agent and that the answers were improperly written down without the knowledge or consent of the insured.

The reception of this testimony constituted the basis of the first assignment of error in the Supreme Court and the court, in an opinion by Mr. Justice Strong and concurred in by the entire court, held that the case was controlled by the conclusion arrived at in the

5. 21 Wallace 152, 22 Law ed. 593.

Wilkinson case, supra, and the fact that the questions and answers were read to the applicant by the agent made no difference, because, after answering the questions truthfully, the answers read by the agent constituted an assurance on his part as representative of the assuring company that, for the purpose of issuing the policy, the answers which he had given were accepted as meaning what the agent had stated them in writing to be.

However, in New York Life Ins. Co. v. Fletcher, decided by the court about ten years later (1886) and probably the leading case upon this subject, the court distinguishes the prior cases on the ground that in the former cases no limitation on the power of the agent was contained in the application for insurance and thus brought to the knowledge and attention of the insured. Mr. Justice Field says in the unanimous opinion of the court in commenting upon these cases:

"The present case is very different from Ins. Co. v. Wilkinson, supra, and from Ins. Co. v. Mahone, supra. In neither of these cases was any limitation upon the power of the agent brought to the notice of the assured. Nothing in these views has any bearing upon the present case. Here the power of the agent was limited, and notice of such limitation given by being embodied in the application, which the assured was required to make and sign, and which, as we have stated, he must be presumed to have read. He is, therefore, bound by its statements."

The court also quotes with approval from the Connecticut case of Ryan v. World Mut. Life Ins. Co., where it was held that the insurer has a right to presume that the insured will not only in good faith answer all of the interrogatories correctly, but will use reasonable diligence to see that the answers are correctly written.

Notwithstanding the lengthy consideration given to this question in the Fletcher case, we find four years later, in Continental Life Ins. Co. v. Chamberlain, that on account of a statute of South Carolina constituting the agent soliciting the insurance the agent of the company, the court holds, notwithstanding any provision in the policy prohibiting the modification or waiver of any terms thereof "except upon agreement in writing signed by the president or secretary of the company whose authority for this purpose cannot be delegated," that knowledge communicated to the agent concerning the existence of other insurance, which was not transmitted to the

6. 117 U. S. 519, 29 L. ed. 934.

7. 41 Conn. 168.

8. 132 U. S. 304, 33 L. ed. 341.

company in response to the question designed to elicit such information, would none the less preclude the company. In that case it is asked: "Is the company estopped, under these circumstances, to dispute its liability upon the policy?”

It appears from the opinion that the plaintiff relied upon the Wilkinson and Mahone cases, supra, while the defendant relied upon the Fletcher case, supra. The court said that because of the special facts in this case it must be determined upon grounds that did not exist in any of the others; that by force of the statute the company could not, by any provision in the application or policy, convert its agent into a representative of the applicant for insurance and that, if in his capacity of agent for the company, he filled out the application, something he was not bound to do, but which service, if he chose to render it, was within the scope of his authority as agent, the company would be estopped from taking any advantage of the misstatements knowingly placed therein by its agent; that this conclusion was particularly necessary in this case by reason of the fact that the question relating to other insurance was more or less ambiguous and the negative answer made by the agent amounted to a construction that the question had no application to insurance in co-operative societies and, therefore, the company would be bound by the interpretation which its agent had placed upon the question.

It would seem that without distinguishing the Fletcher case, supra, the court could very well had arrived at the same result by merely pointing out the ambiguity in the form of the question and then holding that by reason of this ambiguity the question was truthfully answered. It is a well settled rule of construction that where there is any ambiguity in a contract of insurance or in the application therefor that all such ambiguities will be resolved in favor of the insured. Thus our own Supreme Court in the case of Peterson v. Manhattan Life Ins. Co. decided, where a similar question had been answered in the negative, that the insured was warranted in presuming that the inquiry was directed to other insurance of the same character as that for which he was applying, and his attention not being specifically directed by the question to other forms of insurance, such as fraternal insurance, his insurance was not voided by his negative answer. The decision in the Chamberlain case, supra, can, therefore, be sustained and reconciled upon this theory, although the language of the opinion itself appears to be in conflict with the Fletcher case, because the fact that the statute

9. 244 Ill. 329.