eighteen hundred and fifty, and all amendments and extensions thereof, also an act, entitled 'An act to incorporate the Deposit Bank of Frankfort,' approved March third, eighteen hundred and sixty-three, and all amendments and extensions thereof, be, and the same are hereby repealed: provided, that if said banks, or either of them, on or before May first, nineteen hundred, file in Secretary of State's office their or its written consent to pay taxes under state and local levies of nineteen hundred and subsequent years, as provided in the Constitution and revenue statutes of this state, the bank or banks thus agreeing shall be excepted from the operation of this act." Laws 1900, p. 88, c. 28.

The bank did not file its consent, but organized under the act of 1856, as before stated. Counsel are at variance as to whether this act was intended to destroy the corporation immediately or to allow it to live until the 1st day of May, whereupon, if it had not complied with the condition, it should then cease to exist. We do not think it necessary to pass upon this question, nor upon the question whether there was a reorganization of the bank. The learned judge in the court below, in his examination of the statutes of Kentucky to find whether the existence of the bank was continued for the enforcement of its liabilities, referred, first, to section 2 of the act of February 14, 1856, which reads as follows:

"That where any corporation shall expire or be dissolved, or its corporate rights and privileges shall cease by reason of a repeal of its charter or otherwise, and no different provision is made by law, all its works and property and all debts payable to it, shall be subject to the payment of debts owing by it, and then to distribution among the members according to their respective interests; and such corporation may sue and be sued as before, for the purpose of settlement and distribution as aforesaid." 1 Laws 1855-56, p. 15, c. 148.

And he said:

"It is conceded that if section 2 of this act is still the law, then the defendant bank's existence has been preserved thereby for the purposes of the bill of review sought to be filed, because its charter was granted after the act."

He then proceeds to show that it was carried into the General Statutes of Kentucky of 1888, and became section 9 of chapter 68. He then points out that this section was omitted in the revision known as the "Kentucky Statutes of 1894," and that this omission, being from a chapter relating to the general subject which was revised at that time, shows that it was intended to be dropped; and he cites Kentucky decisions that such was the effect of such an omission in the revision of that year. The reason for this omission from the context in which it had stood, the judge suggests, was probably "because it was thought its subject-matter was covered by a provision of the act providing for the creation and regulation of private corporations enacted as part of the same revision."

We quite agree that upon the omission of a provision so important to the winding up of the affairs of defunct corporations we should expect to find elsewhere some provision which would govern the subject. In section 1987 of the same revision it is declared "that whilst privileges and franchises so granted may be changed or repealed, no amendment shall impair other rights previously vested," which provision is still in force. The court below was of opinion that this re

ferred only to "the rights of the corporation and persons interested therein, not the rights of persons who have claims against the corporation." To this conclusion we do not agree. The language is broad and general, and we must think was intended to guard against the impairment of vested rights of all persons, whether of the corporations and its members, or of others, against it. Such, evidently, was the view of Mr. Justice Harlan in delivering the opinion of the Supreme Court in Covington v. Kentucky, 173 U. S. 234, 19 Sup. Ct. 383, 43 L. Ed. 679. Other statutes of Kentucky are referred to by counsel for the appellant as tending to show the solicitude of the Legislature in preserving vested rights upon the repeal or alteration of the charters of corporations, but we are content to rest our decision upon the one above referred to.

We therefore conclude that the court erred in holding that the notice did not bring the corporation before the court, and by this we mean, of course, the corporation which was party to the original suit. Having thus decided the preliminary question, we are in some doubt, in view of the somewhat anomalous position of the case, as to our further duty; that is to say, whether we should remand the case, with direction to the lower court to entertain the application and proceed to determine it upon its merits, or should ourselves consider the merits of the application. From the terms of the order of the Supreme Court, we must suppose that it was intended merely to lift the bar of its own decree and leave to the Circuit Court full authority to inquire and determine whether leave to file the bill ought to be granted. But we cannot suppose that it was intended that its determination should be final, and, undoubtedly, the permission thus given by the Supreme Court would not have precluded that court from reviewing the action. of the Circuit Court, if its appellate jurisdiction had not been transferred to the Circuit Court of Appeals. For the Supreme Court did not have before it a proposed bill, and could not, therefore, determine the fitness of the bill which the petitioner might be advised to file, or the propriety of granting leave to file it. It would seem, therefore, that this court should have and exercise the same power as the Supreme Court would have had but for the transfer of its appellate jurisdiction to this court, or as we should have had if the final decree in the original case had been made by this court, and we had granted the like permission to apply to the lower court as the Supreme Court has granted. The Circuit Court has made a final order denying the application, and upon grounds which extend to its merits, as its opinion and order clearly show. We think the whole matter is before us, and that we should not simply decide a part of it and remand the case, to be, perhaps, brought here again upon another appeal.

We have held that the court below was in error in holding that the bank was extinguished by the repeal of its charter to the extent that it could not be served with process to bring it before the court to respond to the application for leave to file the bill, and it is a necessary consequence, if not an identical proposition, that it was competent to be a party to the proceedings. We must therefore hold that the Circuit Court gave an insufficient reason for refusing and dismissing the application. But we think that upon other grounds its order was

right. The proposition is to obtain the review and reversal of the former decree of the Circuit Court of the United States, affirmed by the Supreme Court, upon the ground that the judgment of the Fayette circuit court, upon which the United States court relied as an estoppel and made the basis of its decree, has since that time been carried to the Court of Appeals of Kentucky and been there reversed. No other ground for the bill of review is suggested, and the bill brings forward no other. Some question is made by the appellee whether, upon an inspection of the record in the original case, the estoppel by judgment was in fact the only basis of the decree. We think there can be no doubt that it was the controlling reason for it.

But is the ground assigned a sufficient reason why the original decree should be now reversed? The course of decision in the courts of Kentucky upon the question of the validity of the act of the Legislature of November 11, 1892, which was held void by the judgment of the Fayette circuit court above referred to, illustrates the consequences which would ensue if the fact that, since the judgment of the United States court became final, the judgment of the state court upon which it rested has since been reversed, should be accepted as a valid reason for reversing the judgment of the United States Court. The judgment of the Fayette circuit court was itself rested upon a former decision of the Kentucky Court of Appeals, which held the act of November 11, 1892, void as an impairment of the state's contract with the banks by a bare majority. After the decree of the United States court in question, the membership of the Kentucky Court of Appeals was changed, and, the question being again brought up, that court overruled its former decision by a bare majority, and, on the Fayette circuit judgment being brought up, it was reversed. We do not think it can be admitted that the final judgments of the courts of one jurisdiction can be thus made dependent upon the changing views of the courts of another. In the present case the ultimate and controlling fact relied upon is that the Kentucky Court of Appeals has swept away the foundation on which the former decree of the United States court was decided; for it was the inevitable result of the new law of the state, as declared by its Court of Appeals, that the Fayette circuit court judgment should be reversed. Suppose the United States Court should reverse its decree, and the state court should again change its views and revert to its former opinion; shall the United States Court restore its decree? The principles upon which the finality of judgments rests preclude such consequences. Even in the same jurisdiction a judgment which has become final and was rightly decided as the law then stood will not be reversed upon a bill of review upon the ground that the law has been changed by later decisions. To hold otherwise would leave the judgments and decrees of the courts on very unstable foundations, and dependent, not upon their own rectitude, but upon the vicissitudes of shifting opinions in regard to the governing law. Tilghman v. Werk (C. C.) 39 Fed. 680 (Jackson, Circuit Judge); 3 Encl. of Plead. & Prac. 581, notes.

In Burgess v. Seligman, 107 U. S. 20, 2 Sup. Ct. 10, 27 L. Ed. 359, the Circuit Court had decided a case upon its own interpretation of a statute of Missouri, and afterwards the Supreme Court of the state

rendered a contrary decision in a case against the same defendants at the suit of a different plaintiff raising the same question. But the Supreme Court of the United States, upon an appeal from the judgment. of the Circuit Court, held it was not bound by the decision of the state court, and affirmed the ruling of the Circuit Court. Now the correctness of the judgment of the lower court was open to the correction of the Supreme Court, but it refused to make any, and affirmed the judgment. Suppose that, instead of an appeal to the Supreme Court of the United States, an attempt had afterwards been made to review the judgment upon the ground that the law of Missouri had been declared by its Supreme Court to be the contrary of that on which the decree had been rested. No one can doubt that it would have been fruitless. Yet such an application would have stood in one respect on better ground than the present, for there the statute had never received a construction by the Supreme Court of the state. We do not lose sight of the fact that there was an actual reversal of the judgment of the Fayette circuit court; but, as we have said, that was the necessary consequence of the change in the law upon which it rested. Suppose, again, that in the present case the courts of the United States had founded their judgment directly upon some statute of the state, holding it to be a valid law. The sanction of such a law would be of equal force at least with the estoppel upon which it did found it. Would the decree be reopened and reversed upon a showing that the statute. had been since then held invalid by the highest court of the state? We do not think so. And yet such later decision would as completely annihilate the foundation of the decree as did the reversal of the judgment of the Fayette court. We are not required to determine which of the two conclusions of the Kentucky Court of Appeals was right, and we therefore pass over that subject. It was undoubtedly competent for that court to change its opinion if it saw good reasons for doing so, and no other tribunal is privileged, without necessity, to challenge the sufficiency of its reasons. We have here only to determine whether in point of law its later decision reversing the judgment of the Fayette circuit court gives ground for reopening and vacating a final judgment of the courts of the United States founded upon it, and our conclusion is that it does not.

The order of the Circuit Court is affirmed.

CARROLLTON FURNITURE MFG. CO. v. AMERICAN CREDIT
INDEMNITY CO.

(Circuit Court of Appeals, Second Circuit. July 1, 1903.)

1 INSURANCE-PLACE OF CONTRACT.

No. 14.

Where an application for insurance was made, the policy was accepted, and the premium paid in Kentucky, no place of payment in case of loss being named therein, the contract was a Kentucky contract, and gov erned by the laws of that state.

2. SAME AVOIDANCE OF POLICY-MISREPRESENTATIONS.

Subsequent to the issuance of a policy insuring plaintiff against losses generally on sales of merchandise in its business to a certain class of

customers, a rider was attached by which it was insured against losses on sales to a particular firm to a limited amount; the rider containing a clause, "all other terms and conditions of the said policy to remain in full force and effect." Held, that representations made in the original application as to plaintiff's previous gross sales and losses were immaterial to the particular risk assumed by the rider, and were not incorporated into such contract by the clause quoted, which must be construed as referring only to terms and conditions which were pertinent. 8. SAME MATERIALITY OF REPRESENTATIONS-WHEN QUESTION OF LAW.

Representations made in writing in an application for insurance in response to written questions, and warranted by the applicant to be true, as the basis of the contract, are thus made material by the action of the parties in so treating them; and their materiality is a matter of law, arising from the contract, to be declared by the court, and not a question for the jury.

SAME-AVOIDANCE OF POLICY-TRUTHFULNESS OF REPRESENTATIONS.

A warranty in an application for insurance must be literally and exactly fulfilled, but a representation is satisfied if it is substantially true; and a slight variance, which would not have influenced the action of the insurer in making the contract, will not defeat the policy.

5. SAME QUESTION FOR JURY.

Whether a representation of fact made in an application for insurance is substantially true or substantially false is a question for the jury. 6. SAME

ESTOPPEL.

Defendant issued a policy insuring plaintiff against losses on sales of merchandise to customers having a commercial rating in the last published book of Dun & Co. The application called for a statement by plaintiff of its gross sales and losses each year for the five last preceding years. In an action on the policy, it was shown that the losses during that time largely exceeded the amounts stated in answer to the question; but there was also evidence tending to show that defendant's agent stated to plaintiff that the question called for a statement of the losses only on sales to customers having the commercial rating, which was the class to be insured, and that such agent himself ascertained the amounts from plaintiff's books, and wrote the answers, which were substantially correct as to such losses. Under the state statute, the answers were representations, and not warranties. Held, that if plaintiff, in signing the application, acted upon the construction placed by the agent on the question, which was a question for the jury, defendant was estopped to claim that the policy was avoided by the misrepresentation.

On Rehearing. For former opinion, see 115 Fed. 77.

Before WALLACE, TOWNSEND, and COXE, Circuit Judges.

WALLACE, Circuit Judge. The reargument of this cause was granted upon the application of the defendant in error because it was urged that the decision of the Supreme Court in Northern Assurance Co. v. Building Association, 183 U. S. 308, 22 Sup. Ct. 133, 46 L. Ed. 213, was so wide a departure from some of its previous decisions as to virtually overrule them-especially those which had been referred to in the opinion of this court. At the time of the former argument that decision had just been announced, and, although it was adverted to by counsel, it was not cited in the briefs, and was only cursorily discussed; and it was not referred to in the opinion. of this court. Upon the reargument, not only has the bearing of that opinion been discussed, but all the questions presented by the writ

14. See Insurance, vol. 28, Cent. Dig. § 560.