stakeholder, under an agreement to divide the sums among the winners, who are to be determined by the chances of life, and hence the policy is void, as being a gambling contract.

4. Testimony of experts in insurance matters as to their understanding of a contract of insurance and a book containing the company's advertisement and explanation of the contract is inadmissible, the construction of writings being for the court.

Andrews, C. J., and Baldwin, J., dissenting.

Appeal from superior court, New Haven county; Milton A. Shumway, Judge,

Suit by Austin B. Fuller and wife against the Metropolitan Life Insurance Company of New York for a cancellation of certain receipts given to the defendant, for an accounting, and for damages. Facts found by the court, and judgment rendered for the defendant, and appeal by the plaintiffs for alleged errors in the rulings of the court. Error and Judgment set aside.

The complaint contains 41 counts. Each count sets up a different policy of insurance, but they are all alike in other respects. The first count is as follows:

"(1) On October 26, 1872, the defendant issued to John S. Follansbee, of Bridgeport, Connecticut, a policy of insurance under the seal of the defendant, on his life, for the benefit of his wife, Eunice R. Follansbee, for a sum of money exceeding one thousand dollars.

"(2) The plaintiffs are unable to state the amount of said policy, or to annex a copy of the same to this count, because, as is hereafter stated, said policy has been delivered to the defendant, and is now in its possession.

"(3) Said policy of insurance was duly signed, executed by the proper officers of the defendant, and was in all respects a valid and binding contract between the defendant and said John S. Follansbee and Eunice R. Follansbee.

"(4) Among other promises and agreements contained in said policy, there was the following agreement, to wit: This policy is issued and accepted by the assured upon the following express conditions and agreements: At the request of the assured this policy is issued upon the reserve dividend plan; and the said company agrees that, should the premiums be paid as herein stipulated for ten full years from the date hereof, and that should the life insured survive said period of ten full years, said company will pay to the designee of this policy at the expiration of said period of ten years its equitable proportion of the reserve dividend fund in cash, and the same to be receipted for to said company.'

**(5) Said reserve dividend plan, referred to In the preceding paragraph, is set forth and expressed on pages ten and eleven of a certain book entitled 'Key to Reserve Dividend Plan,' which book is hereto annexed, and marked Exhibit A.' Said reserve dividend plan, as therein stated, was originated by one William P. Stewart, who was the sometime defendant's actuary prior to the issuing of

any of the policies stated in this complaint, and in the form as stated on pages ten and eleven of this book had been adopted by the defendant prior to the issue of any of such policies, which plan, as expressed by said Stewart, and adopted by the defendant, was as follows: 'All who take policies of any denomination or character within the year form a class, which is treated by the company as a distinct body for ten years. Every year forms a separate class, and all are known by the year in which they terminate; as the class of 1880, 1881, etc. Policies issued in this way, like all other policies, are paid out of the general fund of the company when becoming a claim by death or limitation, and not, as sometimes supposed, out of the class fund. The company, in issuing any policy, guaranty two things: the amount insured, according to its terms, and an equitable share in all the surplus and earnings. The amount insured they pay after it becomes a claim. The surplus they divide by way of a cash dividend at the end of every year. The reserve policies, however, in forming a class, stipulate among themselves that all the dividends allowed upon their policies for ten years shall be retained by the company, invested at the average rate of interest obtained upon their investments, and finally divided at the close of the ten years among the living members only. It is further stipulated that, in case any member fails to keep his policy in force for ten years, he shall forfeit his reserve for the benefit of his class, which sum shall be kept at interest by the company, and divided in like manner. It follows, then, that for every class formed a fund will accumulate from five sources, as follows: First, from the ordinary 'dividends as allowed by the company, accumulated upon existing policies; second, from the accumulated dividends bequeathed to the class by dying members; third, from the accumulated dividends forfeited to the class by retiring members; fourth, from the reserves of all policies lapsing before the close of the class; fifth, from the addition of compound interest. It follows, then, that the existing members at the close of the class will get, besides receiving all the ordinary dividends earned by their policies, more or less from all the last four sources. It is plain, therefore, that the dividend to the existing member at the close of the class must be considerably larger than the dividend accumulating in the ordinary way. Substantially what may be expected in reason, this work is designed to show. It will be well to remember that policies lapsing in one class do not benefit any other; that the expenses and death claims are paid out of the general fund of the company, and not charged to the class fund; that the lapses among ordinary policies benefit all policies alike; a partial indemnity to the reserve class for their greater vitality; that each class secures the investment of its funds at the best rate of interest available with safety, without any charge for

Investing it, as the expenses of the company are borne in an equitable manner by the policy holders in general; that the dividend at the close of the class is paid in cash, and no reversionary additions allowed; that at the close of one class, unless the policy holder signifies his desire to enter the new class then forming, he will become as one of the ordinary members of the company, receiving the dividend at end of every year, and a surrender value in case of lapse.'

"(5) Between 1869 and 1872 the foregoing plan became well known to the public as the reserve dividend plan of insurance, and was known to the public by the name of the reserve dividend plan. In August, 1872, the defendant, under its corporate seal, agreed with William P. Stewart that the defendant would use the plan for five ensuing years, and at once thereafter the defendant adopted and used it, and announced it to the public as one of the distinctive plans of defendant, owned and used by it alone. In September, 1872, defendant, by writing under its corporate seal, appointed Josiah N. Bacon, of New Haven, its general agent to canvass and procure applications for insurance of the lives of individuals, and to appoint and educate subagents; and in September, 1872, the defendant, in writing, under its corporate seal, appointed Sherwood Sterling its general agent to canvass and procure applications for insurance on lives of individuals, and to appoint and educate subagents. Thereafter, and in September, 1872, the defendant, by John R. Hegeman, vice president of defendant, and William P. Stewart, actuary of defendant, delivered to Josiah N. Bacon, and also delivered to Sherwood Sterling, copies of the said book entitled 'Key to Reserve Dividend Plan,' and verbally instructed each of them to obtain insurance upon that plan, and to use those books to explain the said plan to applicants for insurance. Pursuant to these instructions, said Josiah N. Bacon and said Sherwood Sterling represented and explained to each of the persons mentioned in the complaint that the reserve dividend plan was the plan as stated in the fifth paragraph of the complaint, and exhibited to them copies of the said 'Key to the Reserve Dividend Plan,' and read to such persons pages ten and eleven of said book, and declared to such persons that the book described the reserve dividend plan practiced by the defendant. Whereupon the persons mentioned in the complaint, upon the faith of the book so exhibited to them, and the declarations of Bacon and Sterling that it represented the reserve dividend plan of the defendant, and of their representations and explanations as to said reserve dividend plan, accepted said policies from the defendant, and paid premiums thereon for ten years to defendant, without notice of any other reserve dividend plan than as above stated.

cies of life insurance on their respective lives, in varying amounts, from the defendant, under said reserve dividend plan. The policies in each case contained the agreement set forth in paragraph 4 of this count; and all such policy holders formed a class known as the 'class of 1882.'

"(7) The defendant has upon its books the names of all the policy holders insured by the defendant on the reserve dividend plan, and the several amounts of said policies, and the payments thereon; and the plaintiff's know of but a few of the names of said policy holders, which are set forth in this complaint, and do not know the amounts for which said policies were issued, nor the payments made thereon.

"(8) Many of the members of said class of said policy holders allowed their policies to lapse during the said class period of ten years by reason of the nonperformance on their part of the stipulations of said policies, but after payment of one or several premiums upon their respective policies. A few of said policy holders died before the expiration of said period of ten years, and a few of said policy holders, including said John S. Follansbee and Eunice R. Follansbee, maintained and kept their policies in force during the whole of the period of said ten years.

"(9) The books of the defendant will show who of said policy holders died, or allowed their policies to lapse, or kept them in force, during said period of ten years

"(10) During said period of ten years the defendant received large sums of money, amounting to several hundred thousand dollars, from said policy holders, by way of premiums paid on their respective policies. Dividends were earned on said policies. Substantially fifty per cent. of the premiums paid on each policy was held by the defendant as the reserve on said policy; and the defendant should have kept the class fund of said policy holders invested, according to the terms of said plan as before stated, and should have rendered to the policy holders whose policies were in force at the termination of said class period a just and correct account of said class fund.

"(11) At the close of said class period, to wit, on the day of -, 1882, the defendant, by a letter which it wrote, informed said John S. Follansbee and Eunice R. Follansbee that their proportion of the said class fund to which they were entitled according to said reserve dividend plan on their said policy, was the sum of dollars; and

the defendant, in said letter, requested a return of said letter to the defendant, and the same is now in the possession of the defendant.

"(13) Said John S. Follansbee and Eunice k. Follansbee, on the receipt of said letter from the defendant, had no knowledge or information as to whether the amount which the defendant so represented as their true proportion of said class fund was such true proportion or not. The defendant had always the exclusive charge of said class fund, and at the time of sending said letter knew and had the exclusive knowledge as to what was and should have been the just and true amount of such class fund, and knew that the amount stated in said letter was much less than the true amount thereof.

"(14) Said John S. Follansbee and Eunice R. Follansbee believed at the time of receiving said letter that the amount therein stated as their just proportion of said class fund was the just and true amount thereof; and in reliance upon said belief they returned said letter to the defendant, and received from the defendant the amount as stated in said letter to them as their proportion of said class fund, and also as the entire sum due to them from other provisions of said policy, and thereupon executed and delivered to the defendant a receipt for the sum so received, and returned to the defendant the original policy of insurance; and they have now no copy of said letter, receipt, or policy of insurance. "(15) On the — day of 1889, said John S. Follansbee and Eunice R. Follansbee learned for the first time that the amount which had been so stated to them by the defendant in said letter, as aforesaid, as their true proportion of said class fund, was not the true and just amount thereof; but that their true and just proportion of said class fund would and did exceed the amount stated in said letter by several times, to wit, more than five times the amount so stated, and that the proportion of said class fund really due to them exceeded the amount paid them by the sum of more than one thousand dollars.

"(16) The defendant, in stating to them in said letter their proportion of said class fund. fraudulently concealed from them the truth concerning the real amount of said class fund, and of their just and true proportion thereof, in order to cheat and defraud them. "(17) On the day of - 1889, the said John S. Follansbee and Eunice R. Follansbee, for a valuable consideration, assigned to Harriet A. Fuller, the plaintiff, all of their claims and the claims of each of them against the defendant, and she is now the equitable and bona fide holder and owner thereof. The assignment was as follows: 'For one dollar and other good considerations, we, John S. Follansbee and Eunice R. Follansbee, do hereby sell, set over, transfer, and assign unto Harriet A. Fuller, of New Haven, Conn., all the claims, demands, and causes of action which we or either of us have or may have against the Metropolitan Life Insurance Company of New York, N. Y. Witness our hands and seals, this day of

1889. New Haven, Conn. John S. Follans

bee. [L. S.] Eunice R. Follansbee. [L. S.]' The consideration therefor was expressed in the instrument executed by A. B. Fuller, and delivered to the said Follansbees, as follows: 'Whereas, John S. Follansbee and Eunice R. Follansbee have this day assigned to Harriet A. Fuller, wife of Austin B. Fuller, of New Haven, Conn., a claim against the Metropolitan Life Insurance Company of New York, with the expectation that said claim will be prosecuted against said company, this agreement witnesses that the said assignment is made upon the following understanding, viz.: Said A. B. Fuller is to employ attørneys and counsel for the purpose of prosecuting said claim in the name of said Fullers, and without any liability on the part of said Follansbees to pay the expenses, or any part thereof. If no recovery is had, the said Follansbees are not to make any claim against said Fullers, or either of them. But if the suit results in a judgment and recovery for the plaintiff, then said A. B. Fuller will pay to John S. and Eunice R. Follansbee one-half of such sum as remains to him, after paying lawyers and other expenses. If said Fullers find it advisable to give up the attempt to prosecute the claim, then the right is reserved to reassign the said claim to former holder, whereupon their liability under this agreement will then cease. [Signed] A. B. Fuller. New Haven, Conn., 1898.'

"(18) The defendant has never paid to said plaintiff Harriet A. Fuller, nor to said John S. Follansbee or Eunice R. Follansbee, any sum out of said class fund, or upon said reserve dividend plan, other than as above stated.

"(19) Neither the plaintiff's nor said John S. Follansbee or Eunice R. Follansbee have any knowledge or information by which they can state to this court who constituted the class formed in the year 1872, nor the amount of the policies belonging to said class, nor the amount of the premiums paid thereon, nor the amount of the dividends earned thereon, nor the amount or number of said policies that became lapsed during the period of said ten years, nor the several times when any of the said policies became lapsed; but all such knowledge is exclusively with the defendant, and is to be found on the books of the defendant whereon were kept entries concerning all such matters."

The plaintiffs claimed, by way of equitable relief, a cancellation of said receipts, an accounting and judgment for the amount found due thereon, and $100,000 damages.

The policy of insurance referred to in the first count, is as follows:

eration of the representations made to them in the application for this policy, and of the sum of seventy dollars and ten cents, to them duly paid by the assured, Eunice R. Follansbee, of Bridgeport, in the county of Fairfield, and state of Conn., and of the annual payment of a like amount, to be paid on or before the first day of November in every year during the continuance of this policy, until she shall have paid ten full years' premiums, do insure the life of John S.. Follansbee, of Bridgeport, in the county of Fairfield, and state of Connecticut, in the amount of two thousand dollars, for the term of ten years, ending with the first day of November, 1882. And the said company do hereby promise and agree that. should the person whose life is hereby insured die previous to the date last mentioned, the said amount shall be payable to the assured aforesaid, her executors, administrators, or assigns, in ninety days after due notice and satisfactory proof of the death of the said insured; the balance of the year's premium, if any, being first deducted therefrom. And the said company do further agree that, should the person whose life is hereby insured survive the full term of years hereinbefore described, they will pay the owner of this policy the reserve endowment of the same, on the day following the date last mentioned, as calculated by the actuary of the said company, being the sum of three hundred and thirty-seven dollars and ninetyeight cents, provided the stipulations, terms, and conditions under which this policy is issued shall have been observed by the party whose life is hereby insured, and provided this policy shall have been maintained in full force and effect by the payment of all premiums falling due hereon, up to and including the date mentioned for the last payment thereof; otherwise this agreement to become and be null, void, and of no effect. This policy is issued and accepted by the assured upon the following express conditions and agreements: 1st. At the request of the assured, this policy is issued upon the reserve dividend plan; and the said company agree that, should the premiums be paid as herein stipulated for ten full years from the date hereof, and that should the life insured survive said period of ten full years, that said company will pay to the owners of this policy at the expiration of said period of ten years its equitable proportion of the reserve dividend fund in cash, the same to be receipted for to said company. 2d. At the close of any reserve dividend period the owners of this policy have the option to continue it until matured by its terms, either for reserve dividend periods of five or ten years, or to receive its equitable proportion of said company's dividend surplus thereafter annually. 3d. The reserve dividend, when declared upon this policy, if not withdrawn in cash, may be exhausted in payment of future premiums, either as a tem

porary or reserve annuity, or continued with said company as a fund, drawing the average rate of interest earned, against which to charge future premiums as they fall due. 4th. An equitable surrender value will be allowed in purchase of this policy only at such time as a dividend may be due and payable upon it by its terms. 5th. This policy shall not be entitled to any share in the dividend surplus of said company other than at such times and after the manner and upon the conditions as hereinbefore described in sections first and second of this paragraph. 6th. At the close of the period limiting the insurance under this policy the policy holder has the option of continuing it for any further designated period, upon the payment of the same premium, receiving a pledge of the increased endowment for such future period, providing said policy holder shall furnish the company with satisfactory proof of health, and continue with said company the reserve endowment value hereinbefore specified. 7th. Permission is hereby given to the person whose life is insured at any time to make a voyage to Europe by steamer or a first-class packet ship, to travel while there in good conveyances, and to reside in any part thereof north of 42 degrees of north latitude and west of 30 degrees east longitude, and also to return in a like manner. It is, however, mutually understood and agreed that the said person is not insured against death in or by any war, or by any risk, casualty, or consequence of any war at or in any place where he may be while so traveling or residing; provided, always, that in case the said person whose life is insured as above shall at any time during the continuance of this policy, without the consent of the Metropolitan Life Insurance Company previously obtained in writing, sojourn or reside for a longer period than thirty days in any one year, commencing at the time of his arrival, in any part of the western hemisphere lying between the tropics, or of the eastern hemisphere between the 36th parallel north and the tropic of Capricorn, or shall enter upon a voyage upon the high seas except as hereinbefore mentioned, or shall be personally engaged in blasting, mining, submarine operations, or the production of highly inflammable or explosive substances, or in working or managing a steam engine or a circular saw in any capacity, or as a mariner, engineer, fireman, conductor, or laborer in any capacity upon service on any sea, sound, inlet, river, lake, or railroad, or enter any military or naval service whatsoever (excepting into the militia when not in actual service), without the consent of this company previously given in writing, in each or either of the foregoing cases; or if he shall die by his own hand or act, or in, or in consequence of, a duel, or of the violation of the laws of any nation, state, or province; or if any of the statements or declarations made in

the application for this policy, upon the faith of which this policy is issued, shall be found in any respect untrue,-then, and in every such case, this policy shall be null and void. 8th. The said premiums shall be paid on or before the days above mentioned for the payment thereof at the office of the company in the city of New York (unless otherwise expressly agreed in writing), or to the company's agents, when they produce receipts signed by the president or secretary; and, in default thereof, then in every such case the company shall not be liable for the payment of the sum assured, or any part thereof, and this policy shall cease and determine. Nor shall this policy, although delivered, take effect or be in force until the whole amount of the first premium is actually paid in the lawful currency of this country. No officer or agent of this company has power or authority to deliver this policy until such actual payment, nor to waive the actual payment of said premium on the delivery of this policy. 9th. In every case when this policy shall cease and determine, or become or be null and void, all payments thereon shall be forfeited to this company. 10th. If this policy should be assigned or held as security, written notice shall be given to the company, and due proof of interest produced with the proofs of death. 11th. This policy shall be incontestable for any errors or omissions contained in the application not affecting age, health, or family history of the insured. 12th. Grace will be allowed on the payment of premiums on this policy of as many months (not exceeding six) as shall be equal to the number of complete years during which this policy shall have been in force, the policy holder using these periods of grace being charged legal interest for such time. In witness whereof the said Metropolitan Life Insurance Company, have, by their president and secretary, signed and delivered this contract at the city of New York, this twenty-sixth day of October, one thousand eight hundred and seventy-two. Joseph F. Knapp, President. Robt. A. Granniss, Secretary. Countersigned this 29th day of October, 1872. Sherwood Sterling, Gen'l Agent. Reserve Endowment, August, 1872.

"No person except the president or secretary of the company is authorized to make, alter, or discharge contracts, or to waive forfeitures."

On the back of the three policies referred to in counts 17, 19, and 27 there was printed an advertisement or notice containing regulations in respect to payment of premiums and obtaining permission to make a sea voyage, and also the following: "This policy is placed in the reserve dividend class of 1873-83, the credits to the fund of which shall be made at the close of each calendar year until the completion of ten full years from the date hereof; such credits to be the total gains from the following sources, viz.: 1st. The surplus

overpayments on all policies surviving said class period. Note: Overpayments of premiums arise from a larger rate of interest earned than anticipated in the premium charges, a lower ratio of mortality experienced than expected, and a lighter percentage of expenses than provided for in calculating the annual payments. 2d. The surplus overpayments on all policies becoming a claim by death before the completion of said period. 3d. The surplus overpayments on all policies lapsing by their terms before the completion of said period. 4th. The total reserve on all policies lapsing before the completion of said period. Note: The reserves shall be accumulated in all respects as for a whole life policy for a like amount of insurance as herewithin written, to be calculated on the assumptions adopted by the state insurance department for determining such values. 5th. The interest upon such credits at the average rate earned by the company."

The material parts of the judgment rendered for the defendant are as follows: "The 'reserve dividend plan' treated those taking policies upon that plan during any calendar year as a class, and postponed the usual distribution of profits or surplus among such class mutual policy holders to the end of an agreed initial tontine period, to wit, ten years from the date of the several policies, and then at the expiration of said ten-year tontine period dividing among the several surviving and persisting owners, holders, and designees of the policies in the several classes their equitable proportion of the class reserve dividend fund or divisible surplus; the policy holders in any class dying or lapsing or forfeiting their policies during said tontine period of ten years thereby forfeiting their contingent share in any such divisible surplus or profit. At the end of such initial ten-year tontine period the defendant paid in each instance to the several policy holders, owners, and designees of said policies their equitable proportion of the class reserve dividend fund or divisible surplus in cash, and in each instance wherein the insurance term mentioned in the policy was a ten-year term the defendant, at the end of said ten years, also paid to the said holders, owners, and designees of said several policies the amount of said 'reserve endowment' in cash; and in those cases wherein the insurance term mentioned in the policy was for a longer term than ten years, the defendant, upon the request of said sev eral owners, holders, and designees of said policies, at the end of said ten years, also paid to them, severally, an equitable surrender value for said policies in cash; and thereupon, in consideration of such payments of said 'reserve endowment,' and such equitable proportion of the reserve dividend fund or divisible surplus and of said surrender value by the defendant to the said several owners, holders, and designees of said policies, said several owners, holders, and designees surrendered said policies to the defendant, and