Opinion by
Chief Justice Hobson.
Reversing.
On September 6, 1899, the Provident Savings Life Assurance Society of New York issued a policy on the life of William P. Gatlin, of Murray, Ky., for the sum of $10,000. In his application for the policy 'Gatlin stated the beneficiary was his daughter, Gray A. Gatlin, and the policy was so issued in New York and mailed to the agent of the company in Cincinnati. Gatlin páid the premiums on the policy until his death, on April 19, 1901, and when the policy was produced after his death it contained, in addition to the name of Gray A. Gatlin, the name of George O. Gatlin, his son, as one of the beneficiaries. When and by whom this change was made does not appear, except that there was evidence tending to show that the additional words were in the handwriting of the insured, William P. Gatlin. Both the son and the daughter were infants, . and brought suit by their guardian upon the policy. The company, among other things, pleaded the alteration of the policy in bar of the action. It also pleaded that Gatlin had made false statements in his application as to his habits as to drinking whiskey. The application contained, among other things, the following questions and, answers:
[293]*293“(7) Have you ever used spirits,-wine or malt liquors?”
“Yes.”
“ (8) Have you ever used them in excess?”
“No.”
“ (9) Do you now use them? If so, state definitely what is the form, how much and how often — i. e. What is your practice? Don’t say moderately, etc. Such answers will not he accepted (see No. 2 on back).”
“Yes; whiskey, three drinks a month.”
The defendant introduced proof on the trial, which, while not conclusive, was sufficient to warrant the jury. in 'concluding that the assured drank much more whiskey than stated. We do not mean to say that'the evidence would have required the jury to so find, but only that there was evidence sufficient to submit the issue to the jury. The question is therefore presented whether the instructions of the court properly presented the matter to the jury. The -court, by instruction 1, told the jury that if the answers of Gatlin above quoted were “honestly made, without any intention to deceive or defraud the defendant company, and that said answers were substantially true, ’ ’ then they should find for the plaintiff. He also told them, in instruction 3, that if either of the answers was “in fact untrue, and was made with the fraudulent intent to deceive or mislead defendant company, and with intent that defendant should rely, and it did rely, on said answers in issuing the policy,” they should find for the defendant. The court also, by another instruction, directed the jury to find for ihe defendant if the policy had been altered by William P. Gatlin by the addition of the name of George O. Gatlin without the knowledge or consent of the company, although the alteration was made without any fraudulent intent [294]*294on the part of William P. Gatlin. The jury found for the plaintiffs, and the defendant appeals.
As to the alteration of the policy, we thinh the instruction was more favorable to the defendant than it should have been. If the application was in fact accepted by the company, and the policy issued with Gray A. Gatlin as the sole beneficiary, her rights then became fixed, and neither the insured nor the company could affect her rights, except as provided in the policy. It is true, it is provided in the policy that the insured might change the beneficiary with the consent of the company, but he could not effect this end in any way not provided by’ the contract. If he had scratched out her name in the policy after it reached his hands, and inserted his own name, this would not have affected her rights. She could have shown the mutilation and recovered upon the contract as it was before it was mutilated. If, instead of scratching out her name, he let her name remain, and added another as a joint beneficiary in the policy, no greater effect can be given his wrongful act than if he had scratched out her name and inserted in lieu of it the name of her brother. If the alteration was made before the policy was delivered or became effective, or with the consent of the company, a different question would be presented. In lieu of the instruction which the court gave as to the alteration of the contract, the court should have told the jury that they should find in favor of the plaintiff, Gray A. Gatlin, alone, if the alteration of the contract was made by W. P. Gatlin after the policy was delivered and accepted, and without the consent of the company, but that they should find in favor of both the defendants if the alteration was made before the delivery and acceptance of the policy, or with the consent of the company.
The question of the correctness of the instructions [295]*295as to the statements made in the application turns on section 639, Ky. Stats., 1903: “All statements or descriptions in any application for a policy of insurance shall be deemed and held representations and not warranties; nor shall any misrepresentations, unless material or fraudulent, prevent a recovery on the policy.” While the court has had the statute before it in several cases, it has not construed it further than to hold that a misrepresentation will not avoid the policy unless fraudulent or material to the risk. (Germania Insurance Company v. Rudwig, 80 Ky., 231, 3 Ky. Law Rep., 712; Mutual Life Insurance Company v. Thomson, 94 Ky., 258, 14 Ky. Law Rep., 800, 22 S. W., 87; Lancashire Insurance Company v. Monroe, 101 Ky., 12, 19 Ky. Law Rep., 204, 39 S. W., 434.) In 16 Am. & Eng. Ency. of Law, 921, it is said: “InA number of the United-States statutes have been enacted which, while varying considerably in phraseology, provide, in effect, that the represen- • tations and statements of the insured shall not avoid ' the contract unless material to the risk. These statutes have been held to be remedial in character, and within the police power of the State. Under these statutes a misrepresentation will not, of course, avoid a policy, unless it relates to a matter which is material to the risk. And it has been held that, unless qualified by words restricting their operation to representations made in good faith, such statutory provisions apply as well to representations fraudulently made as to those made in good faith. But if the provision of the statute is that misrepresentation or statements made by the insured in good faith shall not avoid the policy unless material to the risk, an immaterial representation will avoid the policy if not made in good faith.” Our statute belongs to the. class first above indicated. At common law the warranty of the truth of an answer in the application [296]*296Implies an agreement that the subject-matter of the question is to be regarded as material, and that an untrue answer avoids the policy, whether made in good faith or not. The purpose of the statute was to prevent the insurer escaping liability on grounds having no real merit. To avoid the policy, the misrepresentation must be material or fraudulent. It was not the purpose of the statute to enable the insurer to avoid his liability by reason of immaterial misstatements. In the sense in which the statute uses the words, no misstatement is fraudulent which is immaterial. In other words, if the statement is substantially true it cannot be fraudulent.
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Opinion by
Chief Justice Hobson.
Reversing.
On September 6, 1899, the Provident Savings Life Assurance Society of New York issued a policy on the life of William P. Gatlin, of Murray, Ky., for the sum of $10,000. In his application for the policy 'Gatlin stated the beneficiary was his daughter, Gray A. Gatlin, and the policy was so issued in New York and mailed to the agent of the company in Cincinnati. Gatlin páid the premiums on the policy until his death, on April 19, 1901, and when the policy was produced after his death it contained, in addition to the name of Gray A. Gatlin, the name of George O. Gatlin, his son, as one of the beneficiaries. When and by whom this change was made does not appear, except that there was evidence tending to show that the additional words were in the handwriting of the insured, William P. Gatlin. Both the son and the daughter were infants, . and brought suit by their guardian upon the policy. The company, among other things, pleaded the alteration of the policy in bar of the action. It also pleaded that Gatlin had made false statements in his application as to his habits as to drinking whiskey. The application contained, among other things, the following questions and, answers:
[293]*293“(7) Have you ever used spirits,-wine or malt liquors?”
“Yes.”
“ (8) Have you ever used them in excess?”
“No.”
“ (9) Do you now use them? If so, state definitely what is the form, how much and how often — i. e. What is your practice? Don’t say moderately, etc. Such answers will not he accepted (see No. 2 on back).”
“Yes; whiskey, three drinks a month.”
The defendant introduced proof on the trial, which, while not conclusive, was sufficient to warrant the jury. in 'concluding that the assured drank much more whiskey than stated. We do not mean to say that'the evidence would have required the jury to so find, but only that there was evidence sufficient to submit the issue to the jury. The question is therefore presented whether the instructions of the court properly presented the matter to the jury. The -court, by instruction 1, told the jury that if the answers of Gatlin above quoted were “honestly made, without any intention to deceive or defraud the defendant company, and that said answers were substantially true, ’ ’ then they should find for the plaintiff. He also told them, in instruction 3, that if either of the answers was “in fact untrue, and was made with the fraudulent intent to deceive or mislead defendant company, and with intent that defendant should rely, and it did rely, on said answers in issuing the policy,” they should find for the defendant. The court also, by another instruction, directed the jury to find for ihe defendant if the policy had been altered by William P. Gatlin by the addition of the name of George O. Gatlin without the knowledge or consent of the company, although the alteration was made without any fraudulent intent [294]*294on the part of William P. Gatlin. The jury found for the plaintiffs, and the defendant appeals.
As to the alteration of the policy, we thinh the instruction was more favorable to the defendant than it should have been. If the application was in fact accepted by the company, and the policy issued with Gray A. Gatlin as the sole beneficiary, her rights then became fixed, and neither the insured nor the company could affect her rights, except as provided in the policy. It is true, it is provided in the policy that the insured might change the beneficiary with the consent of the company, but he could not effect this end in any way not provided by’ the contract. If he had scratched out her name in the policy after it reached his hands, and inserted his own name, this would not have affected her rights. She could have shown the mutilation and recovered upon the contract as it was before it was mutilated. If, instead of scratching out her name, he let her name remain, and added another as a joint beneficiary in the policy, no greater effect can be given his wrongful act than if he had scratched out her name and inserted in lieu of it the name of her brother. If the alteration was made before the policy was delivered or became effective, or with the consent of the company, a different question would be presented. In lieu of the instruction which the court gave as to the alteration of the contract, the court should have told the jury that they should find in favor of the plaintiff, Gray A. Gatlin, alone, if the alteration of the contract was made by W. P. Gatlin after the policy was delivered and accepted, and without the consent of the company, but that they should find in favor of both the defendants if the alteration was made before the delivery and acceptance of the policy, or with the consent of the company.
The question of the correctness of the instructions [295]*295as to the statements made in the application turns on section 639, Ky. Stats., 1903: “All statements or descriptions in any application for a policy of insurance shall be deemed and held representations and not warranties; nor shall any misrepresentations, unless material or fraudulent, prevent a recovery on the policy.” While the court has had the statute before it in several cases, it has not construed it further than to hold that a misrepresentation will not avoid the policy unless fraudulent or material to the risk. (Germania Insurance Company v. Rudwig, 80 Ky., 231, 3 Ky. Law Rep., 712; Mutual Life Insurance Company v. Thomson, 94 Ky., 258, 14 Ky. Law Rep., 800, 22 S. W., 87; Lancashire Insurance Company v. Monroe, 101 Ky., 12, 19 Ky. Law Rep., 204, 39 S. W., 434.) In 16 Am. & Eng. Ency. of Law, 921, it is said: “InA number of the United-States statutes have been enacted which, while varying considerably in phraseology, provide, in effect, that the represen- • tations and statements of the insured shall not avoid ' the contract unless material to the risk. These statutes have been held to be remedial in character, and within the police power of the State. Under these statutes a misrepresentation will not, of course, avoid a policy, unless it relates to a matter which is material to the risk. And it has been held that, unless qualified by words restricting their operation to representations made in good faith, such statutory provisions apply as well to representations fraudulently made as to those made in good faith. But if the provision of the statute is that misrepresentation or statements made by the insured in good faith shall not avoid the policy unless material to the risk, an immaterial representation will avoid the policy if not made in good faith.” Our statute belongs to the. class first above indicated. At common law the warranty of the truth of an answer in the application [296]*296Implies an agreement that the subject-matter of the question is to be regarded as material, and that an untrue answer avoids the policy, whether made in good faith or not. The purpose of the statute was to prevent the insurer escaping liability on grounds having no real merit. To avoid the policy, the misrepresentation must be material or fraudulent. It was not the purpose of the statute to enable the insurer to avoid his liability by reason of immaterial misstatements. In the sense in which the statute uses the words, no misstatement is fraudulent which is immaterial. In other words, if the statement is substantially true it cannot be fraudulent. If the statement is not substantially true, then there is a material ipisstatement within the meaning of the statute. If the insured, when called upon to answer the questions, does not state substantially the truth, his statement is constructively fraudulent, if it is not fraudulent in fact. The word “fraudulent” is added in the statute after the word “material” to bring out this idea, and not to express the idea that the policy might be avoided by the misstatement of a fact wholly immaterial. The substance of the statute is that no misrepresentation, unless material or. fraudulent, shall avoid the policy, it does not refer simply to a misstatement on a material subject; that is, on a subject material to the risk. It refers to material misstatements. The misstatement itself must be ' material; that is, the insured must not materially misstate the facts, and, when he makes a substantial misstatement about anything material to the risk, the policy is avoided. It is not necessary that he should intend to deceive. The instructions given by the court were misleading. There was no question that the assured made the answers contained in the application. In lieu of instructions 1 and 3, [297]*297given by the court, he should have set out in an instruction the questions and answers above quoted, and should have told the jury that they should find for the plaintiffs if the answers were substantially true, that otherwise they should find for the defendant, although there was no intention to mislead or deceive the company; and that the answers were not substantially true if the assured drank materially more whiskey than as stated. The habits of the as-, sured as to drinking intoxicants are a material matter to the insurer. In Mutual Life Insurance Company v. Thompson, 94 Ky., 253; 14 Ky. Law Rep., 800; 22 S. W., 87, the questions related to the former habits of the assured. But in that case the court said: “It is of vital importance for an insurance company to know, before issuing a life policy, whether the applicant is thus temperate in his habits, for obviously'he would not be a fit subject for insurance, nor could a company prudently issue to him a life policy, if he was not then temperate in his habits of drinking intoxicating liquor; and, consequently, if he had made a false statement in that particular, it would be no answer to say the habits were not such as to impair his health, because insurers have a right to protect themselves by guarding against the risk of pernicious habits. ’ ’ The questions here related to his habits at the time the insurance was taken, and, if the answers contained a material misrepresentation, there can be no recovery.
Judgment reversed, and cause remanded for a new trial.