the architect were to be issued during the the architect upon the assurance of the progress of the work, based on his estimate bank's attorney that the contractors had diof the value of labor performed and materials incorporated in the building to the amount of 85 per cent., 15 per cent. of the whole to be retained until final completion and acceptance of the work.

rected this to be done. Appellee took this architect's certificate and applied it to a note payable to its order, dated August 13, 1913, due and payable December 1, 1913, which had been executed in favor of the bank by said contractors.

The contractors agreed to use all moneys paid them on the work and not to divert it The attorneys for the bank and the bondto any other other purpose until all labor ing company conducted a correspondence with and materials were paid for, and the con- the view of adjusting the liability of the tractors were given no right to demand any surety company, and during the time this payment at all until they had shown, to the correspondence was being carried on appelsatisfaction of the architect and owner, that lant discovered that there were outstanding the preceding payment had been disbursed claims for material and labor aggregating as theretofore provided. The owner or archi- about $3,500. The attorney for the bank tect was given the right to demand state- agreed to accept the $600 offered by the ments and receipts showing payment for ma- bonding company, provided the bonding compaterials or labor and to withhold payments ny would discharge all claims for liens against until such statements and receipts had been the building, and would not seek to hold the furnished. Upon the failure of the contrac-bank liable for the $1,853 estimate given it tors to carry out their contract the owner, by the architect. The bonding company deupon three days' notice, was authorized to take possession, carry out, and complete the work, and charge the expense thereof to the contractors deducting the same from the contract price and to collect any loss from the contractors or bondsmen.

clined to accede to this request, whereupon it notified the bank that, reserving all of its rights in the premises, it would complete the building and would attempt to recover from the bank the said sum of $1,853.

It was recited in the agreed statement of Charles L. Thompson was named as the facts that R. J. McBride, of the firm of Mcarchitect, and was made superintendent for Bride & McCammon, alone represented his the owner with power to reject work, etc. | firm in the making and execution of the The contractors agreed to complete the build- contract with the bank, and personally ating on or before December 25, 1913. This contract was dated July 3, 1913.

The application to the bonding company for a bond was made on August 1, 1913, and the work on the building commenced soon thereafter.

tended to all details in providing finances and paying bills and labor therefor; that all moneys received by him, either from the loan from the bank or from estimates during the progress of the contract, were paid to the account of said firm at the bank at DuOn March 14, 1914, Charles L. Thompson, mas, and checked out of said bank by said the architect, wrote the agent of the bonding McBride for the purpose of paying labor, company that the contractors were in finan- supply bills, material, and other expense cial difficulties, and were unable to complete growing out of the contract for said bank their contract, and that claims amounting to building, and that none of said funds was about $1,000 had been filed against the build-used or expended by him in any other coning. On the 20th of March the bonding company as surety advised the architect that it would undertake the completion of the work, and would protect the bank against all claims of labor men and materialmen, and would in other respects comply with and carry out the terms of said bond, and notified the architect, as the agent for the bank, to make no further payments or give no further certificates to said contractors. The architect was requested to furnish an estimate of the probable cost of completing the building in accordance with the contract, and in response to this letter the architect advised the appellant that the uncompleted work on the building was of the value of $600. After the agent of [1] The controversy, therefore, is over the appellant had notified the architect to issue $1,853, which the bank insists it had the no more certificates in payment of the work right to apply to the note of its contractors done by the contractors, the bank, through its under the estimate made by the architect on attorney, applied to and received from the March 23, 1914; while the appellant bonding architect a certificate showing a balance then company claims it as a fund due from the due the contractors, less the retained per- bank as owner under the contract on the centage, of $1,853. This certificate was dated contract price to which the bonding company

tract that the firm was interested in at that time; that the note given by McBride & McCammon to the bank above referred to was secured by a writing from McBride & McCammon to said bank consisting of a letter signed by the contractors and directed to the architect to deliver to the bank any and all estimates that might become due to them on account of said contract as it progressed; that this letter was attached to the note as collateral, was of even date with the note, and held by the bank until it was finally paid by the application of said $1,853 as shown by said last estimate, at which time it was delivered to McBride & McCammon.

to the credit of the contractors' note there were unpaid bills amounting to $3,567.57, which the bonding company was required to, and did, pay. The bank was not required to pay any sum of money to free its property from the assertion of liens against it, as the statutory bond gave it exemption from that liability, and if the $3,500 loan be treated as an advance to be used in the construction of the building, and it be conceded that it was so used, the fact remains that the advance or payment was made in violation of the terms of the contract which fixed the liability of the bonding company as surety.

pleting the building contract. The bonding demand any payment until they had shown, company claims to be entitled to that fund to the satisfaction of the architect and ownunder the doctrine of equitable subrogation, er, that preceding payments had been disas well as under the terms of its contract bursed as provided by the contract. Yet at contained in the application. The contrac- the time this $1,853 was applied by the bank tors abandoned the work about January 1, 1914, at which time there were unpaid bills of $3,567.57, which were later paid by the bonding company. Appellee in its answer alleged that all sums advanced by it to the contractors "were legitimate in the conduct of its banking business" and it says the proof shows that the sums so advanced by it were expended by the contractors in and about the erection of the building contracted for. But appellant says that the $3,500 transaction between the bank and the contractors, evidenced by the note of August 13, 1913, was either an ordinary bank loan, or was an advance payment on the work to be thereafter done by the contractors, and that in either event the bank had no right to apply the amount of the architect's estimate of March 23, 1914, to the payment of that indebtedness. And we agree with appellant in its contention. This would certainly be the case if this were an ordinary loan; but the appellee says it should not be so regarded, for the reason that this money was used in the discharge of demands for which the bonding company would have been liable if the demands had not been so paid. But the difficulty with that position is that, if the $3,500 loan be treated as an advance payment under the contract, then it was prematurely made and was excessive and violated the provision of the contract for the retention of the 15 per cent. of earned estimate. In the case of Prairie State National Bank v. United States, 164 U. S. 227, 17 Sup. Ct. 142, 41 L. Ed. 412, it was said:

"That a stipulation in a building contract for the retention, until the completion of the work, of a certain portion of the consideration, is as much for the indemnity of him who may be guarantor of the performance of the work as for him for whom the work is to be performed, that it raises an equity in the surety in the fund to be created, and that a disregard of such stipulation by the voluntary act of the creditor operates to release the sureties, is amply sustained by authority."

See, also, Powell v. Fowler, 85 Ark. 451, 108 S. W. 827, 122 Am. St. Rep. 41; Marree v. Ingle, 69 Ark. 126, 61 S. W. 369; Lawhon v. Toors, 73 Ark. 473, 84 S. W. 636; National Surety Co. v. Long, 79 Ark. 523, 96 S. W. 745.

It was provided in the building contract that the contractors should have no right to

[2] But it is urged by appellee that the bonding company has waived any forfeiture of the bond by its action in completing the building after knowledge of the breach of the contract by the bank. But we think this is not true, for the reason that when the bonding company was unable to compromise its liability by the payment of a fixed sum of money, it assumed the completion of the building upon the express condition that the right was reserved to hold the bank for the $1,853 alleged to have been wrongfully applied by the bank to the satisfaction of the contractors' note to its order. The bank would have had the right to complete the building and charge the cost of the unfinished work to the bonding company, but it did not elect to do so, and had it done so, it would have then been confronted with the bonding company's claim for the misapplication of the architect's estimate. The bank knew when the bonding company entered upon the completion of the unfinished work that the bonding company was expressly reserving the right to litigate the appropriation made of the $1,853, and under these circumstances we think it cannot be said that appellant waived the breach of the bond and has estopped itself from asserting its claim to the $1,853.

The court below rendered judgment in favor of the bonding company for the sum of $2,302.50, which sum the bank had tendered into court at the time of filing its answer; but we think this amount should be increased by the allowance of the disputed item of $1,853, and the judgment of the court below will therefore be reversed, and judgment entered here for the appellant for the sum of $4,155.50.

Ethridge, who was employed in a mercantile SOVEREIGN CAMP, WOODMEN OF THE establishment, was charged with stealing

WORLD, v. ETHRIDGE.

(Court of Appeals of Kentucky. Nov. 18, 1915.) 1. INSURANCE 825-MUTUAL BENEFIT INSURANCE-SUICIDE-INSANITY-EVIDENCE.

In an action by the beneficiary under a life insurance policy, where the defense was based upon a clause in the policy providing for forfeiture in case of suicide, evidence held sufficient to take the case to the jury on the question whether assured was so insane as to render him irresponsible for his act.

[Ed. Note. For other cases, see Insurance, Cent. Dig. § 2009; Dec. Dig. 2. INSURANCE

EFFECT.

A suicide forfeiture clause in an insurance policy will not render the policy void, where as sured was so insane at the time of taking his own life as not to know that he was doing so; or that his act would cause death, or assured acted on an insanely ungovernable impulse. [Ed. Note.-For other cases, see Insurance, Cent. Dig. § 1956; Dec. Dig. 738.]

some tobacco from a railroad company. He was arrested on this charge, and taken before a magistrate, who took bond for his appearance, and continued the case for trial a few days later. Between the time of his arrest and the day when the case was set for trial in the examining court, Ethridge bought an ounce of carbolic acid from a druggist in the town where he lived, and on the following There was evidence to the effect that he was morning he was found in his room dead.

825.] 788—SUICIDE-INSANITY- a young man of ordinary intelligence, and that on the night before the day he took his life, and for several days previous thereto, his manner, habits, and conversation were about as they had usually been. Witnesses said that they did not observe any change, and that it had never occurred to them that his mind was not balanced. Other witnesses who were well acquainted with the deceased said that for some weeks before his death, and especially after his arrest, they observed evidence of failing mental power which they described. Shortly before he took the poison he wrote and left in his room a short note

Appeal from Circuit Court, Fulton County. Action by B. J. Ethridge against the Sovereign Camp, Woodmen of the World. From a judgment for plaintiff, defendant appeals. Affirmed.

Coleman & Wells, of Murray, for appellant. R. O. Hester and Hester & Hester, all of Mayfield, for appellee.

CARROLL, J. E. D. Ethridge was a member of the appellant society, Woodmen of the World, and there was issued to him a policy of insurance for $750, payable at his death to his mother, the appellee. Ethridge came to his death by drinking carbolic acid, and the appellant refused to pay the policy on the ground that it was stipulated in the policy that, "if the member holding this certificate should die by his own hand or act, whether sane or insane, this certificate shall be null and void and of no effect," and therefore the right to recover the insurance was forfeited by the admitted manner of Ethridge's death.

In avoidance of this plea the beneficiary averred in the reply that:

When Ethridge "came to his death he was of unsound mind, and that when he took his life he was crazy, and his mind was so far gone he was unconscious of the fact that he was taking his life, and was actuated by an irresistible impulse that he could not control or resist, and at the time he took his life his mind was so deranged that he was not responsible for his act."

On a trial before a jury there was a verdict in favor of the beneficiary, and from the judgment on this verdict, the insurer appeals. [1] It is first urged as a ground for reversal that the evidence did not show that Ethridge at the time he took his life was laboring under such mental disturbance as not to know or appreciate the quality of his act, and therefore the court should have directed a verdict in favor of the appellant.

Briefly, the evidence tends to show that

addressed to his mother, telling her, in substance, that he was not guilty of the charge preferred against him.

[2] Aside from the manner of his death, evidence to show that the young man was init may well be doubted if there was sufficient sane. But, considered in connection with the

evidence of his curious unnatural conduct

observable for some weeks before his death, the fact that he took his life, under the circumstances stated, furnished sufficient evidence that at the time his mind was so unbalanced as that he did not know or appreciate the quality of his act or on account of mental unsoundness did not have sufficient will power to control his actions to authorize the submission of this issue to a jury. The charge against him was not a serious one, although calculated to deeply humiliate and that he should have taken his life unless his distress him, and it is hardly conceivable mind was so unbalanced as to render him incapable of knowing or appreciating what he was doing.

We have written in a number of cases that a suicide clause like the one here in question will not avoid the policy if at the time the insured came to his death he was so insane that he did not know that he was taking his life, or that the act he was committing would probably result in his death, or he did not have sufficient will power to govern his actions by reason of some insane impulse the result of mental unsoundness. Bankers' Fraternal Union v. Donahue, 109 S. W. 878, 33 Ky. Law Rep. 196; Inter-Southern Life Ins. Co. v. Boyd, 124 S. W. 333; Modern Woodmen of America v. Neeley, 111 S. W. 282. And we think there was sufficient evidence to take the case to the jury on the issue made

and that the finding of the jury was not so [tion are true.
flagrantly against the evidence as would au-
thorize us to set it aside.

The instructions are complained of, but they are, in substance, the instructions approved in the cases cited and in many other like cases.

The judgment is affirmed.

[Ed. Note. For other cases, see Appeal and Error, Cent. Dig. § 3723; Dec. Dig. 922.] 2. MASTER AND SERVANT 40-CONTRACT-ant claims that the stumps and pillars were BREACH-ACTIONS.

CLAY, Insurance Com'r, et al. v. HARTFORD was overruled, and, the defendants declining

"And that in case the laws of my country, state, or municipality in which the member or his beneficiary may reside, shall require a tax to be paid by said company on account of any moneys collected hereon, said member agrees to pay the amount of such tax to said company in addition to the payments herein before named, as part of the payments needed to hold this certifSuit by the Hartford Life Insurance Com-icate in force, either in connection with the payments of assessments and annual dues or pany against M. C. Clay, Insurance Commis-otherwise, as said company may from time to sioner, and others. Judgment for plaintiff, time elect." and defendants appeal. Reversed, and cause remanded.

CLAY, C. The question presented by this appeal is whether or not the Hartford Life Insurance Company, an assessment life insurance company, is taxable on its assess- "Subdivision II. Foreign Life and Industrial ments under and by virtue of section 4226, Companies. 4226. (1) Reports and Taxes. EvKentucky Statutes. To determine the ques-ery life insurance company, other than fraternal ques-assessment life insurance companies, not organtion, the company brought suit against the ized under the laws of this state, but doing busiInsurance Commissioner and Auditor of Pub-ness therein, shall, on the first day of January