Following the description of the property are these words: "For a more particular description, and as forming a part of this policy by which the assured is to be bound, special reference being had to the assured application and survey." In an anterior part of the policy, is the declaration that the property is insured subject to the conditions and stipulations indorsed thereon, which constitutes the basis of this insurance. One of the stipulations, referred to and printed on the back of the policy, is as follows: "1. That the basis of this contract is the application, *** and if such application does not truly describe the property, this policy shall be null and void. And any false statements or misrepresentations of facts material to the risk, shall be deemed fraudulent and be an absolute voidance of the policy."

The application does undoubtedly contain a warranty, and is imported into the contract. But the policy qualifies the stipulation in the application, within much narrower limits. The condition alluded to in the body of the policy, is to this effect: that the policy shall be avoided if the assured has not correctly described the property, and if he has made any false statements or misrepresentations in the application, of facts material to the risk. In the face of the policy the insurers declare in substance, that they assume the risk, subject to this and the other conditions indorsed thereon, "which constitute the basis of the contract." When we come to look closely at what that basis it, we find it to be the statements and representations of. facts material to the risk. The falsity of any fact, however trivial and unimportant, the subject of a warranty, avoids the contract. But the underwriter assumes the risk, not on the warranty of the assured that his statements are absolutely and literally true, but on the faith of that his statements and representations are true in all respects material to the risk. To avoid the policy the statements must be not only untrue, but such untruth must be predicated of a fact or facts material to the risk. If it be about an immaterial matter, no such consequence would follow. A provision that the statements are to be regarded as warranties, is controverted by a subsequent recital that the assured is responsible for their truth so far as they are material to the risk. So if the covenant is, that the statements are true as to condition, value, risk, etc., but as to all others, representations merely. Lindsey vs. N. M. Ins. Co., 3 R. I., 157 ; May on Ins., p. 166, § 160. This case is very much like one recently before Lord Cockburn. Fowkes vs. M. & L. Life Ass., largely quoted in May on Ins., § 168, wherein the Queen's Bench held that construing the declaration of the assured and the policy together, the fair import of the

verbal disclosure. The assured would be regarded as declaring to the insurer, If the answer as written is your understanding of the facts disclosed to your agent, then I am bound by them as warranties, or as representations, as the case may be. Mahone's case, 21 Wallace. If this were a suit in chancery for reformation of the contract, that court would esteem the verbal statements of Myers, in answer to the interrogatories, as incorporated into the contract and decree accordingly, if there were no other objections. A court of law would reach precisely the same end by putting the insurer under an estoppel to insist on a breach of the warranty, or the untruth of the representations. It is but another addition to the numerous instances where courts of law have borrowed principles from the equity courts and adopted and enforced them. Nor should any limitation be put upon the naturalization into the common law of equitable principles, where its methods of procedure and forms of action are adapted to render complete justice. In Chase vs. Ins. Co., 20 N. Y., 54, there was a stipulation in the application which we have before characterized as reasonable: it was that the company would not be bound by any act done or statement made to or by any agent or other person not contained in the application.

In the late case of Rohrbach, 62 N. Y., 1875, literally the same covenant as in the case before us, was sustained. It had been condemned by the Supreme Court of New York. Its inevitable effect is to greatly weaken the indemnity on which the assured rely. It is inconsistent with the acts and conduct of the insurance companies in sending abroad all over the land their agents and representatives to canvass for risks. It is an effort by covenant to get the benefit and profits which these agents bring them, and at the same time repudiate the relation they sustain to them, and to set up that relationship with the assured, and that too without their knowledge and consent. It is not a limitation or restriction of power, but the dissolution of the relationship with themselves, and the establishment of it between other parties. This 14th condition attempts a logical and legal impossibility. It converts the agent of one into the agent of both. He deals with the subject matter for both contracting parties. He is instructed by the company to study his documents and papers, so that he can readily fill up the blanks; he can negotiate for the company for high rates of insurance; and at the same time his duty is to his other principal to cheapen the rates. It places the agent in an inconsistent and antagonistic position. On the one hand he must ply the people to insure, extend and increase the business and the profits

of the company, and thereby put money in his own purse. But in doing all this, if he blunders and makes mistakes, for these he is the agent of his customers, and with them is the responsibility. If he waives a forfeiture by extending the time for the payment of a premium note, it would be a grave question whether he represented the company or the assured; if the latter, there would be no waiver at all. The complications would be intricate, and almost inexplicable. Whilst we cannot sustain this condition, we repeat that it is entirely legitimate for this corporation to limit the powers of their local agents. But if they choose to do so, those with whom they do business ought to be informed of it.

We adopt the doctrine of these cases, which held that if the agent takes charge of the preparation of the application, or suggests or advises what shall be answered, or what will be a sufficient answer, the company shall not avoid the policy because they are false or untrue, if the full disclosures were made by the applicant to him. We come now to consider whether there are any false representations or concealments that should avoid the policy. The underwriter was entitled to full disclosures, not merely to know the truth, but the whole truth. A withholding of any facts material to the risk is tantamount to a false representation, and vested with the same penalty. No serious objection is made to the answers to the interrogatories about the title.

It is said with great force of reason that the response to the inquiry about incumbrances lacks fullness, and does not accord with the truth. It was very material to the company to learn the extent of the assured's interest in the property, and its value. If he had only an equity of redemption, how much was it worth? The fact was that the incumbrance was for a principal debt of $40,000, with large arrears of interest. It was in litigation, and there had been a decree of the chancery court, reducing the apparent debt to $10,000, which had been appealed from and was undecided in the Supreme Court. These circumstances were important, both in determining whether the risk would be taken, and in fixing the rate of insurance. It is also objected that the answers to the questions as to the value of the plantation, and the gin-house, gin, stand, press and appurtenances, are untrue in this, that the valuation is excessive. Every over-valuation will not avoid the contract. There must be some element of fraud or intention to deceive, with a view to obtain insurance thereon for a greater sum than could otherwise be obtained.

The rule, as approved by the Supreme Court in Franklin Ins. Co., 2 Vaughn, 92 United States Reports, 519, that if the assured put a

value on his property greatly in excess of its cash value in the market, yet if he did so in the honest belief that the property was worth the valuation put upon it, and the excessive valuation was made in good faith, and not intended to mislead or defraud the insurance company, then such valuation will not defeat a recovery on the policy. In that case the "goods" were valued in the application at $12,000; the actual worth as proved by the jury was $7,504. Yet there being no fraud meditated or intention to mislead, the contract was not avoided.

The Planters Insurance Company gave notice in their blank applications, and also stipulated in the policy, that they would only pay, if a loss occured, two thirds of the value of the property at the time of the loss, thereby giving themselves a wide margin of safety, and not trusting to the accuracy of valuations. At best the value of real estate and structures thereon is uncertain. It is a matter very much of opinion about which there will be great difference. Myers was asked his opinion, and if it was in excess of others he should not suffer by it, if he meant no fraud or deceit. The answers to the questions, six, twelve, and fifteen, were in relation to the title.

The value of the plantation, and the incumbrances, relied upon by the insurance company to defeat a recovery, were given under these circumstances. Wilson, the agent, states that at the time the application was filled up, and several years prior thereto, he was intimately acquainted with the Belmont plantation and gin-house, and appurtenances; that he had especially examined the latter twice, and made two surveys for the inspection of insurance companies, and that his invariable custom was followed in this case, to explain the interrogatories in the printed blanks and instruct the applicant how to make his answers; that he knew that Myers owned two thirds of the Belmont plantation upon which the deed of trust in favor of Estell operated to recover a principal debt of $40,000; that he was trustee, and a party to the suit, which resulted in the chancery court decreeing a balance in favor of Estell of $10,000, which was pending on appeal in Supreme Court, and undecided.

With all this knowledge, Wilson states, knowing the proper answer to be made to question six, "I did instruct Myers how to write down his answers. Of course I approved the same." He gives substantially this account of the answer to the twelfth interogatory: A good deal of conversation occurred between Myers and himself as to the proper answer. The property produced $5,000 income, which would be ten per cent on a value of $50,000. It was finally settled to give that valua

tion, and then added, that although that might be more than the property would bring in the market for cash down, yet it so greatly exceeded the amount of the lien or decree, that it was not a matter of importance as to the exact value; he did not consider the valuation excessive.

His explanation about the answer to the sixteenth question, is to the effect that knowing all about the matter inquired about, both Myers and himself knew that the incumbrance was $10,000 or thereabouts. Myers in his deposition states that he referred the question of the value of the plantation to Wilson; who after discussing with him, concluded that the property fairly represented a cash capital of $50,000, and could fairly be put down at that price. Wilson also agreed that the answer to the 6th interogatory should be as written.

Wilson, who was familiar with the deed in trust for Estell's benefit to himself, trustee, the litigation and the decree therein, agreed with Myers, after consultation, that the answer to the 16th question should be as written in the application. Myers further says, that he consulted Wilson on all the points of difficulty.

Not to pursue the subject into further detail, it has been already proved that Wilson actually participated in the preparation of the application, dictated the most material answers complained of as erroneous, and approved and consented to all of them, as statements of the truth, especially within the rule laid down in Ins. Co. vs. Mahone, 21 Wallace, and the other cases herein before cited; the company is estopped to deny the truth of the answers in the application, and cannot make the defense that the statements of the assured therein are misrepresentations so as to avoid the policy.

Myers in his application gave notice that his factors had applied for insurance to the extent of $4,500 in other companies. In the face of the policy, the insurers consented that such a policy. "current" might be underwritten; that was sufficient notice or waiver of further notice. The company does not insist in this court on the point that the policy has been forfeited for non-payment of the premium.

The 6th section of the charter, acts 1874, p. 238, does not make them require the applicant to state all the material facts and circumstances concerning the risk required by the company. But it does not prohibit the parties to the contract from making warranties if they choose. It is not restrictive of the power of the corporation; but declaratory of the duty of the assured. Independent of this section it would have been the duty of the assured to have made full and truthful disclosures. The provision is for the benefit of the company,