edness is increased to an amount far in excess of the requisite sum.

The Bankrupt Act (§ 39, 14 Stat. at L., 517) provides for an adjudication of involuntary bankruptcy upon the petition of one or more creditors, the aggregate of whose debts provable under the Act amounts to at least $250. It becomes necessary, therefore, to ascertain what constitutes a debt that may be proved. The plaintiff in error contends that it is limited to the principal of a sum of money owing, while the assignee claims that it includes the principal and all accrued interest.

To determine this question we must look in the first place to the Act itself. If the intention of Congress is manifest from what there appears we need not go further. Sec. 19 provides "That all debts due and payable from the bankrupt at the time of the adjudication of bankruptcy, and all debts then existing but not payable until a future day, a rebate of interest being made when no interest is payable by the terms of the contract, may be proved against the estate of the bankrupt." And 156*] again; "all demands against the bankrupt, for or on account of any goods or chattels wrongfully taken or withheld by him, may be proved and allowed as debts to the amount of the value of the property so taken or withheld, with interest."

There is certainly nothing here which in express terms excludes interest from the provable debt. On the contrary, there is the strong est implication in favor of including it.

point of jurisdiction, that the *petition. [*157 ing creditors should have owing to them from the debtor they wish to pursue, debts provable under the Act to the required amount. The English cases referred to in the argument, in our opinion, have no application here. They are founded upon the English statutes and the established practice under them. Our statute is different in its provisions and requires, as we think, a different practice.

This is conclusive of the case. The petition filed in the bankruptcy proceedings distinctly averred that the debts due the petitioner exceeded the sum of $250; and, if interest is added, the particular indebtedness specified amounts to more than that sum. The court found this allegation true. That finding is conclusive in a collateral action. We have so decided in Michaels v. Post ante, 520, at the present term. Where the record shows jurisdiction, an adjudication of bankruptcy can only be assailed by a direct proceeding in a competent court. Evidence, therefore, to show that payments had been made which reduced the indebtedness below the required amount, was inadmissible under any form of pleading in an action like this, but it was especially so in this case, because there is no averment in the pleadings contradicting the record. The sole objection is that upon the face of the record the error is apparent. A record cannot be impeached without previous notice by proper form of pleading.

The judgment is affirmed.

CHARLES W. JEFFRIES, Admr. of Allan
A. Kennedy, Deceased, Plff. in Err.,
THE ECONOMICAL MUTUAL LIFE IN-
SURANCE COMPANY.

v.

(See S. C., 22 Wall., 47-57.)

are false answer.

The object is to ascertain the total amount of the indebtedness of the bankrupt at the time of the commencement of the proceedings, and also the amount of this indebtedness owing to each one of the separate creditors. Accrued interest is as much a part of this indebtedness as the principal. It participates in dividends, when declared, precisely the same as the principal. One has no preference over the other, Warranties in applications for insurance—what and for all the purposes of the settlement of the estate the bankrupt owes one as much as he does the other. Creditors prove their debts in order that they may participate in the management and distribution of the estate. Their influence in the management and their share on the distribution depend upon the amount of their several debts which have been proven. Hence, in order to fix the quitable representative value of a debt not due, provision is made for a rebate of interest. But if interest is to be rebated on debts not due, why ot, upon the same principle, add it to such as are past due?

The provision for adding interest to the value of goods wrongfully taken and converted is equally significant. Certainly no good reason can be given for withholding interest in cases arising upon contract and allowing it in cases of tort, and because it is expressly given in the last and no provision is made for it in the first, the conclusion is irresistible that it was expected to follow the contract as a part of the obligation.

1. Where the averment in the application for insurance is that the statements and declarations made therein are in all respects true, and the policy is made and accepted upon the express condition and agreement that such statements and declarations are in all respects true, this stipulation is not made as to important or material statements oniy, but as to all statements.

2. It is no answer that the false statement was not material to the risk, or that it was a positive advantage to the Company to be deceived by it. 3. A false answer, to an inquiry whether the applicant has made any other application to have his life insured and whether he is married or single, held to avoid the policy.

[No. 209.]

Argued Mar. 2, 1875. Decided Apr. 5, 1875.

'N ERROR to the Circuit Court of the United States for the Eastern District of Missouri. The case is fully stated by the court. Messrs. T. W. B. Crews and J. S. Laurie, for plaintiff in error:

A misrepresentation will never vitiate a policy, unless material to the risk. Such mate

NOTE. Material misrepresentation avoids policy -see note, 7 L. ed. U. S. 335.

We are all, therefore, clearly of the opinion that accrued interest constitutes part of a debt Effect of agents filling in untrue answers in approvable against the estate of the bankrupt, plication for life insurance, without knowledge of and if it does it is necessarily part of a debt assured-see note, 20 L. ed. U. S. 617. which may be used to uphold involuntary pro-tations with respect to previous applications for Forfeiture of life insurance by false represenceedings. It is only necessary, upon this insurance -see note, 55 L. R. A. 122.

riality must be averred, and its determination language is certainly a warranty, and if not is a question solely for the jury. literally complied with, the contract is

Daniels v. Hudson River Fire Ins. Co., 12 avoided. Cush., 416; Mut. Ben. Ins. Co. v. Robertson, 59 Ill., 123, reported in Chicago Legal News, Nov. 25, 1871; Mut. Benefit L. Ins. Co. v. Mil ler, Ind. Rep. reported in 2 Ins. Law Jour., 101; Farmers' Ins. Co. v. Snyder, 16 Wend., 481, Phil. Ins., 5th ed., p. 580, sec. 540 and cases cited; Anderson v. Fitzgerald, 4 H. L. Cas., p. 504.

In the latter case the Lord Chancellor says: "If it is not a warranty, but a misrepresenta- But even conceding that the statements made tion, if made bona fide, it does not signify by the assured were representations collateral whether false or not, unless it is material. In- to the contract, as urged by appellant; yet, the deed, whether bona fide or not, if it is not ma- materiality of those statements is not a questerial, the contract is quite unimportant." tion for the jury to determine. It is shown by And Mr. Baron Parke, 4 House of Lords, p. the first plea that the false statements made by 484, remarks: "These words, no doubt, must the assured were so made in response to parbe understood not to include a false statement ticular questions asked of him by the insurers. of matters to the disparagement of the appli- Under such circumstances, the statements must cant for insurance, and tending to render his be presumed to have been material; otherwise life less insurable; such a construction would the questions would not have been asked. be clearly absurd, and in no way reconcilable with the manifest object of the promise."

ments, which are part of this contract of in

surance:

First. That the statements and declarations made in the application for this policy, and on the faith of which it is issued, are in all respects true, and without the suppression of any fact relative to the health or circumstances of the insured, affecting the interests of said Com

pany.

Sixth. That in case of the violation of the foregoing conditions or any of them, or of the insured dying in or in consequence of a duel or in violation of the laws of the United States or of any Nation, State or Province, or by reason of intoxication, this policy shall become null and void.

The answer of the defendant, among others, contained the following allegations:

The contention in opposition to the judg ment is this: that the plea does not aver that the false statements made by the assured were material to the risk assumed. Is that averment necessary to make the plea a good one?

It is contended, also, that the false answers in the present case were not to the injury of the Company; that they presented the applicant's case in a less favorable light to himself than if he had answered truly. Thus, to the inquiry: "Are you married or single?" when he falsely answered that he was single, he made himself a less eligible candidate for insurances than if he had truly stated that he was a married man; that although he deceived the Company, and caused it to enter into a contract that it did not intend to make, it was deceived to its advantage, and made a more favorable bargain than was supposed.

contract made between the parties.

We are to observe, first, the averment of the plea: that Kennedy, in and by his application for the policy of insurance, in answer to a question asked of him by the Company, whether he was "married or single," made the false statement that he was "single," knowing it to be untrue; that in reply to a further question therein asked of him by the Company, whether "any application had been made to any other company? If so, when?" answered "No;" whereas, in fact, at the time of making such false statement, he well knew that he had previously made application for such insurance, and been insured in the sum of $10,000 by another company.

That the policy was by this defendant issued, and by the said Kennedy accepted, in the fol- This is bad morality and bad law. No one lowing express condition and agreement con- may do evil that good may come. No man is tained in said policy and made part of said con- justified in the utterance of a falsehood. It is tract of insurance, to wit: that the statements an equal offense in morals, whether committed and declarations made in the application for for his own benefit or that of another. The fal49*] said policy and on the faith of which it lacy of this position as a legal proposition, will was issued, were in all respects true and with-appear in what we shall presently say of the out the suppression of any fact relating to the health or circumstances of the assured, affecting the interests of the defendants, and upon the further condition, to wit: that in case of the violation of the aforesaid condition among others, or of the insured dying in or in consequence of a duel, or in violation of the laws of the United States, or of any Nation, State or Province, or by reason of intoxication, said policy should become null and void; that said Allan A. Kennedy did violate the first condition in this: that the statements and declarations made by the said Kennedy in his application for said policy of insurance were not in all respects true, but were false in the following respects, to wit: defendant said that in and by said application for said policy of insurance and on the faith of which said policy was issued, the said Kennedy, in answer to the question therein asked of him as to whether he was married or single, stated that he was single, meaning thereby that he was a single and unmarried man; whereas, in truth and fact, said Kennedy was then and there a married man, having a wife then living, as he, the said Kennedy, then and there well knew.

*Secondly, we are to observe the aver- [*53 ment that the statements and declarations made in the application for said policy, and on the faith of which it is issued, are in all respects true, and without the suppression of any fact relating to the health or circumstances of the insured affecting the interests of the Company.

In

We are to observe, also, that other clause of the policy, in which it is declared that this polDefendant further says that, in and by said icy is made by the Company and accepted by application for said policy of insurance and on the insured, upon the express condition and the faith of which said policy of insurance was agreement that such statements and declaraissued, the said Kennedy in reply to the questions are in all respects true. This applies to tion therein asked of him, "Has any applica- all and to each one of such statements. tion been made to any other company; if so, other words, if the statements are not true, it when?" answered, "No," meaning thereby that is agreed that no policy is made by the Comhe, the said Kennedy, had not prior thereto pany, and no policy is accepted by the insured. applied for insurance on his life to any other life insurance company; whereas, in truth and in fact, said Kennedy had, prior thereto, to wit: on or about the month of April, 1870, applied for insurance upon his life to the Mutual Life Insurance Company of New York, and had been insured therein in the sum of $10,000, as the said Kennedy, at the time of making said answer, then and there well knew.

To this plea a demurrer was interposed, which was sustained by the court below. From the judgment entered upon this demurrer, the present writ of error is brought.

The proposition at the foundation of this point is this, that the statements and declarations made in the policy shall be true.

This stipulation is not expressed to be made as to important or material statements only, or to those supposed to be material, but as to all statements. The statements need not come up to the degree of warranties. They need not be representations even, if this term conveys an idea of an affirmation having any technical character. "Statements and declarations" is the expression-what the applicant states and what the applicant declares. Nothing can be

The

more simple. If he makes any statement in, answers were false. F. signed the proposal the application it must be true. If he makes and a declaration accompanying, by which he any declaration in the application it must be agreed "that the particulars above mentioned true. A faithful performance of this agree- should form the basis of the contract." ment is made an express condition to the exist-policy mentioned several things, which were ence of a liability on the part of the Company. warranted by F., among which these two anThere is no place for the argument either swers were not included. The policy also conthat the false statement was not material to tained this proviso: that "If anything so warthe risk, or that it was a positive advantage to ranted shall not be true, or if any circumthe Company to be deceived by it. stance material to this insurance shall not have been truly stated, or shall have been misrepresented or concealed, or any false statement made to the Company in or about the obtaining or effecting of this insurance," the Justice Ball, he charged the jury "that they must not only be satisfied that the various false statements were false in fact, and were made in and about effecting the policy, but also that such false statements were material to the insurance." A bill of exceptions was tendered, on the ground that the jury should have been directed "that if the statements were made in and about effecting the insurance and such statements were false in fact, the defendants were entitled to a verdict, whether such statements were or were not material." The exceptions were argued in the Court of Exchequer, where judgment was ordered for the plaintiff on the verdict. A writ of error was brought in the Court of Exchequer Chamber, where the judgment was affirmed by a majority of seven to three. The writ of error to the House of Lords was then brought. Mr. Baron Parke, Mr. Baron Alderson, Mr. Justice Coleridge, Mr. Justice Wightman, Mr. Justice Erle, Mr. Justice Creswell, Mr. Baron Platt, Mr. Justice Talfourd, Mr. Justice Williams, Mr. Baron Martin and Mr. Justice Crompton attended.

It is the distinct agreement of the parties, that the Company shall not be deceived to its injury or to its benefit. The right of an individual or a corporation to make an unwise bargain is as complete as that to make a wise bar-policy should be void. On the trial before Mr. gain. The right to make contracts carries with 54*] it the right to determine what is prudent and wise, what is unwise and imprudent, and upon that point the judgment of the individual is subject to that of no other tribunal. The case in hand affords a good illustration of this principle. The Company deems it wise and prudent that the applicant should inform them truly whether he has made any other application to have his life insured. So material does it deem this information, that it stipulates that its liability shall depend upon the truth of the answer. The same is true of its inquiry whether the party is married or single. The Company fixes this estimate of its importance. The applicant agrees that it is thus important by accepting this test. It would be a violation of the legal rights of the Company to take from it its acknowledged power, thus to make its opinion the standard of what is material, and to leave that point to the determination of a jury. The jury may say, as the counsel here argues, that it is immaterial whether the applicant answers truly if he answers one way, viz.: that he is single, or that he has not made an application for insurance. Whether a question is material depends upon the question itself. The information received may be immaterial. But if under any circumstances it can produce a reply which will influence the action of the Company, the question cannot be deemed immaterial. Insurance companies sometimes insist that individuals largely insured upon their lives, who are embarrassed in their affairs, resort to self-destruction, being willing to end a wretched existence if they can thereby bestow comfort upon their families. The juror would be likely to repudiate such a theory, on the ground that nothing can compensate a man for the loss of his life. The juror may be right and the Company may be wrong. But the Company has expressly provided that their judgment, and not the judgment of the juror, shall govern. Their right thus to contract, and the duty of the court to give effect to such contracts, cannot be denied.

Opinions were delivered by Mr. Baron Parke, the Lord Chancellor, Lord Brougham [*56 and Lord St. Leonards, all concurring in reversing the judgment, on the ground that the question of the materiality of the statements should not have been submitted to the jury. This case was decided upon facts almost identical with the one before us, and presented the precise question we are considering. The counsel for the defendants asked for a ruling, that if the statements were untrue, the defendants were entitled to a verdict, whether they were or were not material. This was refused, and the judge charged that to entitle the defendants to a verdict, the statements must not only be false, but material to the insurance. This was held to be error, and the judgment was reversed.

Cazenove v. Ass. Co., 6 C. B. (N. S.), 437 (and see, Duckett v. Williams, 2 Cromp. & M., 348), is a familiar case. The opinion was delivered by Cockburn, Ch. J., of the Common Pleas, and was decided in the same way. case was affirmed in the Exchequer Chamber, in 1860, 6 Jur. (N. S.), 826, 1860; 3 Big. Cas., 213; Price v. Ins. Co., 17 Minn., 497.

The

Of the authorities in support of these views, a few only will be mentioned. In Anderson v. Fitzgerald, 4 H. L. Cas., 483, 487, Fitzgerald 55*] *applied to an insurance office to effect a policy on his life. He received a form of pro- Many cases may be found which hold, that posal containing questions required to be an- where false answers are made to inquiries swered. Among them were the following: which do not relate to the risk, the policy is "Did any of the party's near relatives die of not necessarily avoided unless they influenced consumption or any other pulmonary com- the mind of the company, and that whether plaint?" and "Has the party's life been accept- they are material is for the determination of ed or refused at any office?" To each of these the jury. But we know of no respectable questions the applicant answered "No." The authority which so holds, where it is expressly

Dissenting, Mr. Justice Clifford and Mr. the tract, as having been acquired by him at Justice Miller.

254*] *CHARLES CONNOYER et al., Plffs. Governor, but the procès verbal of which sale