tion of and in full reliance upon certain statements and warranties contained in the said application made and signed by said Orlando H. Couch September 29, 1913, and delivered by him to appellant prior to the execution by it of the policy sued upon; that as

delivered therewith a "health certificate," which was signed by him and which was as follows:

Monarch Company and receive from appel- [appellant company was issued in consideralant such an amount of insurance as such premiums would pay for, under a rate set out in said contract; that said contract also provided that holders of policies like that issued to appellee and Orlando H. Couch should, by making written application therefor within one year from the date of said | a part of said application Orlando H. Couch contract, receive, free of expense from appellant, a choice of three designated policies, provided that on said new policy the member should pay the premium rate of said Western Company applicable to the member's age at the time of acceptance by said Monarch Company; that on September 29, 1913, Orlando H. Couch and appellee, in accordance with said contract, made application to appellant for a new policy of insurance in the sum of $5,000, and that the appellant company issued to them a "co-operative dual life policy," payable to the survivor of them; that Orlando H. Couch died April 30, 1914; that the appellant failed to pay the policy; and demanding judgment.

The appellant filed an amended answer, admitting all the material allegations of the complaint, and assumed the burden of proving a defense.

* ** *

"I hereby apply to the Western Life Indemnity Company for a dual life policy of $5,000 on my life, in substitution for policy No. 804 now held by me, which latter policy shall be void upon acceptance of this application by said company. And as a basis of and consideration for said new policy, I hereby submit and warrant that I am now in sound health, that there is no cause in connection with my physical condition that would be a bar to my securing life insurance or in any way shorten my life; that I am not afflicted with any physical or mental defect or infirmity; that I have never suffered from diseases of the liver or kidneys."

It is then alleged that the statements in said health certificate were false and untrue, The answer set out the reinsurance con- in that the said Orlando H. Couch was not tract mentioned in the complaint, and, after in sound health September 29, 1913, and at the setting out the provisions thereof as alleged time the policy sued upon was issued; that in the second paragraph of complaint, alleg- at said time his health and physical condied that when the policy holders in the Mon- tion were such that they would be a bar to arch Company made application for insur- his securing life insurance and were such as ance they were required to furnish satisfac- to shorten his life; that he was at said time tory evidence of insurability at the time of afflicted with a physical defect or infirmity, making such application; that appellant com- was suffering from a disease of the liver and pany in said contract reserved the same kidneys, and other named diseases, which rights of defense against any liability as continued to exist and afterwards caused his could have been exercised by the Monarch death; that on several occasions prior to the Company in the absence of said agreement. 29th day of September, 1913, and also prior to It was also alleged that, after the execu- September 21, 1911, said Orlando H. Couch tion of said reinsurance contract, Orlando H. had had physical examinations made by repCouch and appellee did not elect to carry utable physicians, in which examinations their joint life policy, for the reason that the his urine was tested, and it was discovered premiums theretofore paid by them would that there was present in the urine albumen; only pay for an insurance of $2,000.99; that that said condition of the urine indicated the they elected to apply to appellant for the co- existence or the approach, of the diseased operative dual life policy upon their lives for condition of said Orlando H. Couch hereinbe$5,000, and that they made application for fore described; that Orlando H. Couch was such new insurance on forms prescribed by informed of the existence of said condition, appellant, a copy of which application is set and for the purpose of obtaining the insurout; that with their said application said ance policy sued upon fraudulently concealed parties furnished and delivered to appellant said information from appellant, although he certain written statements, which were in- knew at the time that appellant would not tended by the parties as satisfactory evi- issue said policy of insurance, or assume said dence of the insurability of said parties at insurance risk, if it knew of the existence of the time of making such application, said said condition, and he also fraudulently conwritten statement of Orlando H. Couch being cealed said information from the Monarch also set out in full; that the policy of insur- Company for the same purpose, knowing that, ance sued upon was issued by appellant by if it possessed said knowledge and informareason of the foregoing facts, and not other- tion, it would not issue its policy of insurwise, and that the insurance policy thereto- ance; that all of said conditions existed prior fore held by said parties in the Monarch to September 21, 1911, and Orlando H. Couch, Company was surrendered and canceled; for the purpose of obtaining the insurance at that said policy of insurance so issued by the time of making his application to said

Monarch Company, fraudulently concealed | representations and warranties were false. said information from said Monarch Company, and never thereafter disclosed such facts to either said Monarch Company or to the appellant company; that Orlando H. Couch, on the 21st day of September, 1911, and on the 29th day of September, 1913, knew that said conditions existed.

It is then alleged that the application made to the appellant company for the policy sued upon contained the following provisions:

*

"I hereby make the following warranties: Inasmuch as the policy hereby applied for in the Western Life Indemnity Company is issued in consideration of my present membership in, or contract with, the Monarch Life Indemnity Company, and as such latter membership or policy is based upon my application therefor to said Monarch Life Indemnity Company, I hereby expressly warrant to said Western Life Indemnity Company that my said application to said Monarch Life Indemnity Company and the statements and warranties contained in said application, together with all agreements, medical examinations, revival applications and health certificates made by me to said Monarch Life Indemnity Company for the issuance, revival of or continuance in force of my said membership or policy therein, are and were true when made, and, if the same, or any part thereof, was untrue when made, then, and in that ease, the policy hereby applied for in said Western Life Indemnity Company shall be void and of no effect."

That it did not learn of the untruthfulness of said statements until August 10, 1914, on which day appellant notified the appellee that the appellant had canceled and rescinded the policy sued upon by reason of the misrepresentations and breaches of warranty on the part of Orlando H. Couch and that appellant held itself accountable for the amount of premiums which had been paid on such policy, and on said day mailed a check to appellee for $188.35, drawn upon, accepted by, and certified to by the Central Trust Company of Illinois, the above sum being the full amount of the premiums which had been paid on the policy sued upon. That all the transactions between the parties theretofore had been by checks on banks. That appellee knew that said check was valid. That she was unwilling to receive and accept the amount of the premium paid by Orlando H. Couch on said policy, and would not have accepted the same, had tender been made in legal tender. That she returned said check to appellant without making objection to the form of the tender. That appellant, knowing the appellee was unwilling to receive the return of said premium, made no further offer to repay said money, except as hereinafter stated. That the appellee refused to join in the cancellation of said policy of insurance, and filed her complaint herein August 19, 1914, for the full amount of the policy It is also alleged: That, when Orlando H. and interest. That a summons was issued Couch made application to the Monarch Life for appellant, returnable October 1, 1914. Company for said insurance policy, he made That appellant was required to answer Noa statement in writing dated September 21, vember 10, 1914, at which time appellant filed 1911, to his medical examiner, which became its first answer herein, and paid to the clerk and was a part of his application to said of the court the full amount of the premiums Monarch Company for said policy of insur-paid upon said policy, to wit, $188.35, and in ance, which medical statement and applica- said answer declared said policy of insurtion contained the following question and an- ance rescinded and canceled. That thereaftswer: "Have you ever been refused insurer, on November 30, 1914, appellant tendered ance in any company or order? A. No." That said statement and warranty was false, in that the said Couch had theretofore made application for insurance upon his life with the Hartford Life Insurance Company, which application for insurance was refused and re-all the accrued court costs. That appellee rejected by said Hartford Life Insurance Company prior to September 21, 1911. That said statement and warranty was false when made, in that, prior to making said application, he had applied for life insurance in the Mutual Life Insurance Company of New York which application was also rejected and refused prior to September 21, 1911. That each of the foregoing statements of Orlando H. Couch were warranties, and were material to the risk incurred by appellant, and that appellant, at the time of issuing the policy sued upon, had no knowledge of the falsity of such representations or warranties, but relied upon said statements and warranties, and would not have issued said policy sued upon, if it had known that any part of said

and offered to pay appellee, in legal tender coin of the United States, the sum of $201.62, being the principal and interest on said premiums, and that it also paid into the clerk's office the additional sum of $21.72, covering

fused to accept the return of said premium. That all of said money was on said day paid into court, and is now in the hands of the clerk for appellee's benefit and use, by reason of which facts it is alleged that the policy of insurance sued upon is null and void, and was not in force at the time of Orlando H. Couch's death.

The appellee filed a reply in five paragraphs, the first of which was a general denial. A demurrer was sustained to the second and third paragraphs. The fourth paragraph alleged the issuing of the policy by the Monarch Company in September, 1911; the execution of the reinsurance contract between the receiver of the Monarch Life Company and the appellant company; the application

of Orlando H. Couch to the appellant for the policy sued upon; that the policy sued upon was issued in the place of, and as a continuance of, the policy issued by the Monarch Company, in which it was agreed that said policy of insurance and application therefor was the entire contract between the parties, said policy and application therefor being set out and made a part of the reply; that no medical examination was attached to or made a part of said policy; that by the express provision of said policy the medical examination referred to in appellant's answer was excluded therefrom; that according to the terms of the Monarch Life policy, it was incontestable after one year from its date, except for nonpayment of premiums; that more than one year had elapsed after it was issued before the death of Orlando H. Couch; that the Monarch Life Company, at the time of issuing the policy, had full knowledge and information of the fact that Orlando H. Couch had formerly made "applications" for insurance upon which policies had not been issued, and that the Monarch Company issued the policy to Orlando H. Couch with the information and knowledge of the facts and circumstances connected therewith; and that, at the time when the appellant company issued the policy sued upon, it had knowledge and information of such former "application" for insurance by Orlando H. Couch.

The fifth paragraph of reply alleged that, within a few days after the death of Orlando H. Couch, appellee prepared all the proofs of death as she believed to be necessary under the terms of the policy sue upon and forwarded same to appellant; that appellant, after the receipt of said proofs of loss, and with full knowledge of all the facts set out in its second answer, requested and required appellee to make additional affidavits and proofs of death, which she did at great expense and trouble; and that, although appellant was fully advised and knew all the matters set up in its answer, it did not notify appellee, until long after the receipt by it of said additional proofs, that any objection would be made by it to the payment of said policy of insurance sued on herein, and did not until long after said time inform her of its refusal to pay any sum due thereon by reason of the matters set forth in its answer. Wherefore she says appellant has waived its defense in this action, and ought to be estopped to defend on account of the matter set forth in the answer.

for the reasons that the verdict is not sustained by sufficient evidence, is contrary to law, and also because of alleged errors in the giving of certain instructions tendered by appellee, and in refusing to give certain instructions tendered by the appellant.

[1] Appellee contends that the appellant has failed to have the record paged and indexed and to have the marginal notes made as required by the rules of this court, and that the appeal should be dismissed. There has been a substantial compliance with the rules in relation to the preparation of the record, and when that is done the cause will not be dismissed.

The first error assigned is that the court erred in overruling the demurrer to the fourth paragraph of appellee's reply. This paragraph of reply contains two purported avoidances of the answer: (1) That the pollcy issued by the Monarch Company contained a provision that after one year it should be incontestable, and that more than one year had passed after it was issued and before the death of the insured; and (2) that when the Monarch Company issued its policy to Orlando H. Couch it knew that he had formerly made "applications" for insurance upon which policies had not been issued, and that appellant, at the time it issued the policy sued upon, had knowledge and information of such former “application" for in

surance.

[2, 3] The insurance policies issued by the Monarch Company and the one sued upon, together with the applications for insurance, the medical examinations, health certificate, and the reinsurance contract, are all set out in the pleadings, so that it is a question of law whether the incontestable clause in the Monarch policy became a part of the policy issued by the appellant. Under the terms of the reinsurance contract, Orlando H. Couch, as a member of the Monarch Company, was given a choice of two options: (1) To continue paying to the appellant the same premium for the same period as was theretofore to be paid by him to the Monarch Company, and be thereafter insured against death in the appellant company for such an amount of insurance as the premiums paid by him to the appellant would purchase according to the table of rates set out in the reinsurance contract; (2) within one year to make a written application on the form prescribed by the appellant, and by furnishing satisfactory evidence of insurability at the time of making such application to receive from appelThe appellant filed a demurrer for want of lant, free of expense, a choice of three polifacts to the fourth paragraph of reply, which cies for any desired amount within the limits was overruled and exception saved. There fixed by the by-laws of the appellant, and was a trial by jury, which resulted in a ver- for such new policy paying the rates applidict in favor of appellee for $5,773.24. Ap- cable to his age at the time of becoming a pellee filed a remittitur for $369.24, and member of the Monarch Company. He chose judgment was rendered for $5,414. the second option, entered into a new conAppellant filed a motion for a new trial, tract with the appellant, received a new pol

icy insuring him against death, and no other [in suit, and that he knew of his diseased contingency, and surrendered for cancellation condition, and that appellant, if it were poshis policy which had been issued by the Mon- sessed of such information, would not have arch Company. The reinsurance contract ex-issued the policy in question; that he fraudpressly eliminated and excluded from the ulently concealed such facts from appellant; new policy "all benefits, privileges, or condi- that such diseases continued, and caused tions contained in the policy issued by the his death. The reply also fails to respond Monarch Life Indemnity Company other than to this part of the answer, and is subject to the amount payable at death," which death demurrer for that reason. The appellee benefit was made subject to the conditions makes no attempt to uphold the reply, exexpressed in the policy issued by the appel- cept on the theory that “a bad reply is good enough for a bad answer."

ments in it to be true, thus making the said I have issued the policy if it had known that statement a part of his application for the said answer was false. policy sued upon. Under the conditions of the policy issued by appellant, a breach of warranty could be founded upon false statements made by the insured in his application to the Monarch Company.