R. R. Co., 129 App. Div. 858, 115 N. Y. Supp. 1063, affirmed 197 N. Y. 588, 91 N. E. 1121; Famborille v. Atlantic, Gulf & Pacific Co., 155 App. Div. 833, 140 N. Y. Supp. 529, affirmed 213 N. Y. 666, 107 N. E. 1077.

2. Conceding that the Barnes Act (Laws 1906, c. 657), so-called, had application to the conduct of the motorman in the operation and management of the car, it could have no application to the conduct of the person, whether employé or stranger, who left the open switch into which the car ran, resulting in the injury to the plaintiff. The court, therefore, erred in charging that the jury might predicate defendant's negligence upon negligent operation of the car or negligent conduct in leaving the open switch, or both, as a basis of recovery.

[1, 2] 3. The motorman occupied the position of a vice principal in the operation of the car, as declared by the Barnes Act, while the person who left the switch open was, in the most favorable relation to plaintiff, a coemployé, and for his negligence no liability would arise.

KRUSE, P. J. (dissenting). I think the relation of master and servant did not exist between the defendant and plaintiff at the time the latter was injured. He had quit his work, and was then on his way home. It can be found from the evidence that the privilege of riding without paying fare was taken into account in fixing his compensation for services, and, if so, he was neither a gratuitous passenger nor a bare licensee. While under the circumstances the strict rule applicable to the ordinary passenger may not be applicable, plaintiff was at least entitled to the exercise of reasonable care in transporting him. That was the rule applied by the learned trial judge in his charge to the jury, without objection from either party.

If I am right as to the status of the plaintiff at the time he was injured, neither the fellow-servant rule nor the Barnes Act have any application, and the defendant is not absolved because of the negligence of the motorman or any other employé.

I think the judgment should be affirmed.

LEIFER V. SCHEINMAN.

(Supreme Court, Appellate Term, First Department. January 25, 1917.) EVIDENCE 448-PAROL EVIDENCE MODIFYING CONTRACT OF EMPLOYMENT. When an agreement of employment was in writing and complete on its face, and no latent ambiguity claimed, parol evidence was inadmissible to modify or explain it.

[Ed. Note.-For other cases, see Evidence, Cent. Dig. §§ 2066-2082, 2084; Dec. Dig. 448.]

Appeal from City Court of New York, Trial Term.

Action by Joseph Leifer against Meyer S. Scheinman. Judgment for plaintiff, entered on a verdict in the City Court, and order denying a motion for a new trial, and defendant appeals. Reversed.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

Argued December term, 1916, before GUY, BIJUR, and SHEARN, JJ.

William H. Chorosh, of New York City, for appellant.

Morris & Samuel Meyers, of New York City (Samuel Meyers and Morse Sable Hirsch, both of New York City, of counsel), for respond

ent.

BIJUR, J. The agreement involved in the instant case has been held by this court (159 N. Y. Supp. 40) to be an employment of the defendant at will. It is in writing. It is complete on its face, and, as a complete written agreement, is to be interpreted, in accordance with the rule laid down in Martin v. N. Y. Life Ins. Co., 148 N. Y. 117, 42 N. E. 416, and Watson v. Gugino, 204 N. Y. 535, 98 N. E. 18, 39 L. R. A. (N. S.) 1090, Ann. Cas. 1913D, 21, as a hiring at will. This necessary construction imposed by law constitutes the element of the hiring at will as much a part of the agreement as if it were expressly set out therein. As was said by the Court of Appeals in the Watson Case, supra, 204 N. Y. at page 542, 98 N. E. 20, 39 L. R. A. (N. S.) 1090, Ann. Cas. 1913D, 21:

"As the contract is in writing, it is presumed to express all that the parties intended. No parol evidence was offered to explain any latent ambiguity. No contract can be implied, because the express contract covers the entire subject-matter. There is nothing in the context to enlarge the covenant, and no stipulation inconsistent with a hiring at will."

As I read the decision in Keepers v. M. Hartley Co., 159 App. Div. 473, 144 N. Y. Supp. 738, the precise point now raised was there decided, in the sense of excluding parol testimony. A written contract was there construed to be a hiring at will, and parol testimony to vary or explain it held inadmissible.

I do not think we should give undue weight to the phrase which occurs in section 136 in Wood on Master and Servant, mentioned both in the Martin and Watson Cases, supra, to the effect that "a general or indefinite hiring is prima facie a hiring at will." That statement, as I read it, is a general one, and is, of course, strictly applicable to an oral hiring. It was not, I think, thereby intended to indicate any departure from the maxim that a written contract, complete on its face and unambiguous, cannot be modified by parol testimony. It is axiomatic that general expressions in an opinion, and likewise in the work of a text-writer, must be read in the light of the context where they appear. Crane v. Bennett, 177 N. Y. 106, 112, 69 N. E. 274, 101 Am. St. Rep. 722.

It is true that in Reiss v. Usona Shirt Co., 174 App. Div. 181, 159 N. Y. Supp. 1031, parol testimony was admitted, and apparently the agreement was in writing. But at all events it seems clear that this point was not brought to the court's attention, and may therefore have well escaped consideration.

Assuming, as we must, of course, that both contracts were properly interpreted as constituting a hiring at will, it seems clear that the principle was approved in this department, where the precise point seems to have been raised, that parol testimony to vary or explain the

same is inadmissible. I cannot distinguish the instant case from one in which it was said:

"It is well established that where one is employed on a commission basis. and the employer agrees to make advances to the employé, to be charged against commissions to be earned by the employé, there is no personal liability resting upon said employé to repay the advances if the commissions do not equal the amount of the advances. The defendant seeks to evade this rule by an alleged oral agreement modifying the terms of the written contract. There is nothing in the contract in suit to indicate that such an oral agreement was made or that any oral agreement was made; that contract is complete in itself and expresses the entire terms of the engagement between the parties, leaves nothing to inference, and nothing contined therein is ambiguous or uncertain." Kramer v. Wien, 92 Misc. Rep. 159, 161, 155 N. Y. Supp. 193, 194.

See, also, Hart v. Cort, 165 App. Div. 585, 151 N. Y. Supp. 4; Pattison v. Hull, 9 Cow. 747.

Although there were other errors which would require a reversal of the judgment, they need not be considered, because, for the reasons stated, the judgment must be reversed, and the complaint dismissed, with costs to appellant in this court and in the court below. All concur.

GOLDSTEIN v. NEW YORK LIFE INS. CO.

(Supreme Court, Appellate Division, First Department. January 26, 1917.) 1. INSURANCE 130(3), 175-APPLICATION-ACCEPTANCE.

Where an applicant for a life policy agreed that insurance applied for should not take effect unless the first premium was paid, and the policy delivered and received by him in his lifetime, and that unless otherwise agreed in writing, the policy should take effect as of the date of the application, there was an intention that the application should not be deemed to have been accepted until the policy had been delivered and the first premium paid.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. §§ 198, 362-371; Dec. Dig. 130(3), 175.]

In such case the insurer, on learning of a changed physical condition of the insured before the policy was delivered and effective, could have refused to deliver the policy.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. §§ 196, 197; Dec. Dig. 130(2).]

3. INSURANCE 130(2)—DELIVERY OF POLICY-CANCELLATION OF ACCEPTANCE OF APPLICATION.

In such case, the insured, up to the time of the delivery and effect of the policy, might cancel his application and refuse to contract.

[Ed. Note.-For other cases, see Insurance, Cent. Dig. §§ 196, 197; Dec. Dig. 130(2).]

4. INSURANCE 258-DELIVERY OF POLICY-CHANGE OF HEALTH.

Where an applicant for a life policy agreed that the insurance should not be effective, unless the first premium was paid and the policy delivered and received during his lifetime, when it should relate back to the date of the application, and stated therein that he had never had or suffered from any stomach disease or consulted a physician for any ailment not mentioned, and before the delivery of the policy was compelled to conFor other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

sult a physician and to undergo an operation for cancer of the stomach, and who thereafter received the policy, without informing the insurer as to his changed condition of health, he was guilty of fraudulently concealing his condition when he entered into the contract.

[Ed. Note. For other cases, see Insurance, Cent. Dig. §§ 550, 551, 553, 554, 556; Dec. Dig.

258.]

Clarke, P. J., dissenting.

Appeal from Trial Term, New York County.

Action by Annie Goldstein against the New York Life Insurance Company. From an order setting aside a verdict in favor of plaintiff and ordering a new trial, plaintiff appeals. Order affirmed.

The following is the opinion of Page, J., at Trial Term:

The principal ground upon which this motion is made to set aside a verdict in favor of the plaintiff is that between the time when the insured made application for a policy of insurance upon his life and submitted to a medical examination for that purpose and the time when the application was accepted by the defendant a material change in his state of health occurred which he failed to make known to the defendant, and which concealment, it is claimed, was a fraud upon the defendant and voided the policies issued by it. It appears that, a week after the examination in which the insured stated in writing that he had never had or suffered from any disease of the stomach and had never consulted a physician for any ailment not mentioned, he was compelled to consult a physician on account of trouble he was having with his stomach, and three days thereafter was taken to a specialist, who informed him that he had an obstruction in his stomach for which he would have to undergo an operation. This was on January 16, 1913. On January 17, 1913, the defendant by its agent delivered the policies to the insured and accepted his notes in payment of the premiums. About a week later the operation was performed for cancer of the stomach, and the insured died.

I am unable to find a reported case in this state in which the question here involved has been directly determined, and none has been called to my attention. The federal courts, however, have several times passed upon similar facts. In Equitable Life Assur. Soc'y v. McElroy, 83 Fed. 631, 28 C. C. A. 365, where a policy of life insurance had lapsed and negotiations were pending between the insured and the company to have it reinstated, after a medical examination had been held, the insured became ill with appendicitis. When about to undergo an operation he sent his secretary to pay the premium and received the policy, which the secretary did while concealing the state of health of the insured by a statement that he was out of town. The court held that the failure of the insured or his secretary to disclose the condition of his health was a fraud. The court said (83 Fed. at page 636, 28 C. C. A. at page 370) in the prevailing opinion: "When the representation of good health and the certificate of the surgeon have been made, and the contract is not immediately closed, but negotiations for it continue, * * the representation and certificate continue, and condition all the proposals and the ultimate contract when it is closed. They are all made in reliance upon the continued truth of the representation and certificate, and in the belief that there has been no material change in the health or the probability of the continued life of the subject. The nature of this contract, the insurance of a man's life, the perfect familiarity of the man himself with the condition of its subject-matter, his own life, the ignorance of the insurance company concerning it, and its necessary reliance in making the contract upon his good faith, honesty, and truthfulness, impose upon him the duty of disclosing to the company every fact material to the risk which comes to his knowledge at any time before the contract is finally closed. An intentional omission to discharge that duty perpetrates a plain fraud upon the company, which necessarily avoids the contract."

Similarly in Cable v. U. S. Life Ins. Co., 111 Fed. 19, 49 C. C. A. 216, a man who had applied for a policy of insurance on his life, and had been examined for it, was taken with pneumonia after the medical examination was held

162 N.Y.S.-69

and before the policy was delivered and the premium paid. The court there said (111 Fed. at page 28, 49 C. C. A. at page 224) in the opinion: "The statements in the application of good health and freedom from disease, and specifically from pneumonia, constitute a warranty of the contract as though declared simultaneously with the delivery of the policy. If there had been a change in health between the date of the application and the delivery of the policy, the company was entitled to know of it, and to be fully informed concerning it, that it might determine whether, notwithstanding such change, it would consummate the agreement and deliver its policy."

In Piedmont, etc., Life Ins. Co. v. Ewing, 92 U. S. 377, 23 L. Ed. 610, the Supreme Court of the United States similarly held that where a contract of life insurance was being negotiated, and while the insured was in extremis, a friend paid the premium and accepted a delivery of the policy without disclosing his condition, no valid contract was made. It is a familiar proposition of the general law of contracts that, where representations are made for the purpose of inducing another to enter into a contract, they continue down to the time when negotiations are closed, and speak as of the time when the contract is consummated and the minds of the parties meet. If the representations, though originally true, are known to their maker to be untrue at the time when he contracts he is guilty of fraudulent misrepresentations. Such has also been held to be the law of contracts relating to marine insurance in this state (Snow et al. v. Mercantile Mutual Ins. Co., 61 N. Y. 160), and the principle is especially applicable to life insurance contracts wherein, as stated above, the insured is familiar with the general state of his own health and any changes occurring therein, and the company ignorant concerning it.

It is clear, therefore, that if the contract of insurance in the instant case had not been consummated at the time when the insured was informed that he must undergo an operation for an obstruction in his stomach, he was bound in good faith to notify the company of that fact before he could accept from it a completed contract.

[1-3] The question of when the contract was consummated and became binding upon the parties is in this case determined by the words of the application. It states: "I agree as follows: (1) That the insurance hereby applied for shall not take effect unless the first premium is paid and the policy delivered to and received by me during my lifetime, and that unless otherwise agreed in writing the policy shall then relate back to and take effect as of the date of this application." This language, in my mind, clearly signifies an intention that the application for insurance shall not be deemed to have been accepted until the policy of insurance has been delivered to the insured and the first premium paid, but, that having been done, unless otherwise provided for in writing, the date of the contract shall then be the date of the original application. It certainly could not be said that the company was bound by any contract up to the time when it made a delivery of the policies and received notes for the premiums, and, had it learned of the physical condition of the insured before that time it could have legally refused to deliver the policies. Likewise up to that time the insured was free to cancel his application and refuse to contract. Globe Mutual Life Ins. Co. v. Snell, 19 Hun, 560. In the absence of any overt act upon the part of the company showing an acceptance of the application and an intention to be bound before the happening of the events so stipulated in the application itself, this stipulation is absolutely controlling. Equitable Life Assur. Soc'y v. Clements, 140 U. S. 226, 11 Sup. Ct. 822, 35 L. Ed. 497. This conclusion is contrary to that arrived at by the Circuit Court of Appeals, Ninth Circuit, in the case of N. Y. Life Ins. Co. v. Moats, 207 Fed. 481, 492, et seq., 125 C. C. A. 143, in construing the identical contract under very similar circumstances as in the case at bar. The Circuit Court held that in the absence of inquiry by the company there was no obligation on the insured of his own volition to inform the company of facts coming to his knowledge intermediate the signing of the application and the delivery of the policy, and that representations made by an applicant as to his good health are not continuing representations covering the period between the date of the application and the de