Court Opinion

ID: 8764322
Source: CourtListenerOpinion
Date Created: 2022-11-26 12:19:10.496256+00
Date Added: 2024-06-11T17:01:46.237948
License: Public Domain

SANBORN, Circuit Judge
(dissenting). The main defense of the SEtna Company was that the employer’s agreement of February 24, 1903, constituted the inducement of, and became a part of, the contract of indemnity made on March 12, 1903, and renewed on June 30, 1903, and that the covenants of the Crowe Company therein, to the effect that there should be a countersignature of general managers or presidents of the company upon the checks signed by Graves, and that the bankbook should be balanced and compared monthly with the cashbook by some other officer or person, had been broken, and that the Crowe Company falsely stated in this agreement that Graves’ accounts had been examined on February 12, 1903, and had been found correct with funds on hand to balance. To this defense two principal facts were essential: (1) That the statement of February 24, 1903, was the inducement and became a part of the contract ; and (2) that its covenants were broken, or its statements false. The court below received the evidence offered by the dEtna Company to establish the first fact, held that this evidence conclusively proved it, charged the jury to that effect, and submitted the other issues of fact to them upon that adjudication. The employer’s statement contained this covenant by the Crowe Company:
“That the above answers are to be taken as conditions precedent to and as the'basis of execution of said Indemnity bond, and in consideration of the issuance of said indemnity bond by the company, it is further agreed that the cheeks and supervision above described shall be observed.”
The. Aitua Company proved without contradiction that more than 300 checks, which aggregated more than $150,000, were issued by Graves without the countersignatures covenanted; that the loss complained of resulted in large part, if not entirely, from the use of these checks; and there was evidence, conclusive to my mind, that no useful comparison of the bankbook with the cashbook was ever made by any other officer. These facts, indeed the simple undisputed fact that these checks were issued without the countersignatures, and that they caused the loss, constituted a complete defense to this action, in view of the finding of the court below that the statement was a part of the contract, because they conclusively demonstrated the fact that the Crowe Company had committed the first substantial breach of the agreement, which consisted of mutual covenants, and that by the terms of its contract the policy was avoided. Rice v. Fidelity & Deposit Co., 103 Fed. 427, 433, 43 C. C.A. 270, 276; Hunt v. Fidelity & C. Co., 99 Fed. 242, 245, 39 C. C. A. 496, 199; National Surety Co. v. Dong, 125 Fed. 887, 60 C. C. *562A. 623 U. S. Fidelity, etc., Co. v. Rice, 78 C. C. A. 164, 148 Fed. 206; Groton Bridge & Mfg. Co. v. Clark Pressed Brick Co., 136 Fed. 27, 33, 60 C. C. A. 577, 583; Atlas Reduction Co. v. New Zealand Ins. Co., 138 Fed. 497, 498, 71 C. C. A. 21, 22. The court below therefore erred when it refused to instruct the jury to return a verdict for. the ZEtna Company, and when it declined to charge them, as requested, that, if the coal company failed to perform any of its agreements in its statement which related to the future, the contract of indemnity was released, and when it refused to instruct them, as requested, that the truth of its answers therein relative to the past was material to the validity of the contract of indemnity. On account of these and other errors, the judgment below ought to be reversed, and a new trial of this action should be ordered.
The majority of the court concede these errors. They agree that if the employer’s statement was the inducement, and became a part of the contract of indemnity, the ZE’tna Company’s defense was complete, and the court should have instructed the jury to return a verdict in its favor. But they are of the opinion that the judgment should be affirmed because they think that the court did not hold or instruct ■the jury that the employer’s statement became a part of the contract, because in their opinion there was no substantial evidence to that effect, and because, if the court held that this statement was a part of the contract, this was, in their opinion, an error in favor of the ZEtna Company which offsets the fatal error against it.
With great respect for, and deference to, their judgment I have found it impossible to bring my mind to their conclusions.
1. That the trial court held and instructed the jury that the employer’s statement of February 24, 1903, was the inducement and became a part of the contract of indemnity in suit is demonstrated to my satisfaction by these facts, which the record discloses:
(a) When the employer’s statement was first offered in evidence, the court reserved its ruling. After 12 letters, 2 renewal certificates, and 30 pages of oral testimony had been received to prove that it was the inducement of, and that it became a part of, this contract, the ZEtna Company again offered the statement, the court admitted it in evidence over the objections of the Crowe Company to the effect that the evidence was insufficient to prove that it was a part of the indemnity' contract, and no countervailing evidence upon this subject was ever produced.
(b) The court did not submit to the jury the question whether or not the employer’s statement of February 24, 1903, was the inducement and a part of the contract; but in delivering its charge it read to them certain questions . and answers which this statement contained, and it instructed them that if the Crowe Company fraudulently made those answers, or if'it dishonestly or negligently failed to fulfill the promises which they evidenced, it could not recover in this action.
(c) It did positively instruct the jury that this statement became the basis and a part of the contract in these words, the -first part of which may be found in the opinion of the majority:
*563“There was a good deal of correspondence, you will recall, introduced in evidence here between the indemnity company, in the East, and the local agents representing them, in Kansas City. I admitted that correspondence, not that I thought that it was binding on the company, but I admitted that evidence to show the history and development of the transaction. It resulted in the end in the indemnity company insisting upon an application and questions according to the form that they insisted should be used [this form was the employer’s statement of February 24, 1003], rather than a form used for fraternal organizations, and which perhaps had been used upon a prior occasion. Then it was that the coal company made answers to certain questions which are very important and material in your deliberations in the jury room after you have retired to consider your verdict.”
The court here read to the jury many of the questions and answers in this statement, and then continued in this way:
“Now, in answering those questions, the coal company further agree, over their signature, that the above answers are to be taken as conditions precedent to and as a basis of execution of said indemnity bond, and in consideration of the issuance of said indemnity bond by the company it is further agreed that the checks and supervisions above described shall be observed. So that, as the company had the right to insist upon that, and, secondly, as the company had the right to cancel and terminate this bond at any time, with or without good reason, simply by so electing and so declaring in writing to the coal company, the mere fact that these questions and answers were made in February, 1903, would date back as well as ahead and form a part of the bond upon the part of the coal company upon which the obliga ( ions of the indemnity company would rest, and which must be construed together as one contract. although upon two separate pieces of paper, and which must be taken together.”
And, again, the court charged:
“Now, the indemnity company made these questions and answers precedent to a recovery upon this bond. * * ⅜ So that the indemnity company liad the right to have these questions answered, and one of the questions here is: Were they fairly and truthfully answered?”
And then the court proceeded to and did submit that question to the jury under erroneous instructions, when, as all the members of this court agree, the evidence conclusively answered it in the negative.
Can there be any doubt, in view of these facts and these instructions, that the court below held and charged that the employer’s statement was the basis and a part of the contract in suit? The fact that the court failed to grant a new trial furnishes no evidence to the contrary. On the other hand! it tends to prove that the trial court adhered to its holding at the trial, that it still held that the statement was a part of the contract, but that the evidence failed to conclusively prove a breach of its covenants. The result is that the court held and charged that the employer’s statement was the basis of, and a part of, the contract, and submitted to the jury the question whether or not the Crowe Company had broken the covenants it had made therein, when the evidence was conclusive that it had done so, and the court should have given the peremptory instruction for the ./Etna Company, which it requested. The failure to give this instruction was an error both prejudicial and fatal to the Etna Company’s case. If it had been given, the verdict and judgment would have been in its favor, and the Etna Company assigned and relies *564lipón this error for its reversal. On account of it, it is in-my judgment entitled to a new trial.
2. An endeavor will be made later to show that there was substantial evidence that this employer’s statement was the inducement and a part of the contract, and that the trial court was right in its ruling to that effect.
But, if that court was in error in this respect, that error is not assigned, and it does not extract the vice of the fatal error challenged by the ¿Etna Company. In an action at law, a federal appellate court has no jurisdiction to try the case anew and to determine whether or not the judgment is for the right party. It is a court authorized to review and correct the errors of law of the court below in the trial of the case, and these alone; nor may it lawfully weigh and offset the errors challenged by the plaintiff in error against those against the defendant in error which are not assigned and affirm or reverse the judgment, as in its opinion the balance turns. Every litigant is entitled to a trial by jury of every issue of fact in his case without any error of law in the trial or the instructions; and, if any error prejudicial to him has crept into the trial, he is entitled to a new trial by the jury without error, although the first trial may have bristled with errors in his favor. Two errors do not make a trial without error, any more than two wrongs make a right.
It is true that, where a successful party was entitled upon all the issues and upon all the evidence in the case to a peremptory instruction in his favor, when the defeated party had introduced all his evidence and rested his case, and it is plain that the latter could have produced no other evidence, errors in subsequent instructions to the jury may be disregarded, because the defeated party could not have recovered in such a case in any event, and hence such errors could not have prejudiced him. It was upon this ground, and not upon the ground that the court could try the case de novo and affirm the judgment if it was for the right party, that the judgment in the late case of Cook v. Foley (C. C. A.) 153 Fed. 41, was affirmed. In that case the court held that the defeated parties were permitted without objection to bring forward all the proofs which they had, and to try out the single issue which conditioned their entire claim, the issue whether or not there was fraud ’or gross mistake in the employer’s estimates, and that they produced no evidence to sustain it. In that case it appeared in' this way that they were not, and could not have been, prejudiced by the rulings in the charge, because ■they could not recover upon the entire evidence in any event.
But where there remains any issue for the jury, as there does remain in this case, the issue of notice in any event, there this rule is inapplicable, because the fact does not appear and cannot be made to, appear beyond doubt that the erroneous ruling did not prejudice and could not have prejudiced the defeated party.
The legal presumption is that error produces prejudice. It is only when the fact so clearly appears as to be beyond doubt that an error challenged did not prejudice, and could not have prejudiced, the complaining party, that the rule that error without prejudice is no ground for reversal can have effect, Deery v. Cray, 5 Wall. *565795, 807, 808, 18 F. Ed. 653; Peck v. Heurich, 167 U. S. 624, 629, 17 Sup. Ct. 927, 42 L. Ed. 302; Smith v. Shoemaker, 17 Wall. 630, 639, 21 L. Ed. 717; Moores v. Bank, 104 U. S. 625, 630, 26 L. Ed 870; Gilmer v. Higley, 110 U. S. 47, 50, 3 Sup. Ct. 471, 28 L. Ed. 62; Railroad Co. v. O’Brien, 119 U. S. 99, 103, 7 Sup. Ct. 118, 30 L. Ed. 299; Mexia v. Oliver, 148 U. S. 664, 673, 13 Sup. Ct. 754, 37 L. Ed. 602; Railroad Co. v. O’Reilly, 158 U. S. 334, 337, 15 Sup. Ct. 830, 39 L. Ed. 1006; Railroad Co. v. McClurg, 8 C. C. A. 322, 325, 326, 59 Fed. 860, 863; Association v. Shryock, 20 C. C. A. 3, 11, 73 Fed. 774, 781; Railroad Co. v. Holloway, 52 C. C. A. 260, 114 Fed. 458; Armour & Co. v. Russell, 75 C. C. A. 416, 144 Fed. 614, 615.
This was a trial by jury. The seventh amendment to the Constitution reads:
“In suits at common law, wliore the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved; and no fact tried by a jury shall be otherwise re-examinéd, in any court of the United States, than according to the rules of the common law.”
Of the latter clause the Supreme Court said, in Parsons v. Bedford, 3 Pet. 433, 446, 448, 7 L. Ed. 732:
“But the other clause of the amendment is still more Important, and we read it as a substantial and independent clause; ‘No fact tried by a jury shall bo otherwise re-examined, in any court of the United States, than according to the rules of the common law.’ This is a prohibition to the courts of the United States to re-examine any facts, tried by a court, in any other manner. The only modes known to the common law to re-examine such facts are the granting of a new trial by the court where the issue was tried, or to which the record was properly returnable; or the award of a venire facias de novo by an appellate court, for some error of law which intervened in the proceedings.”
And this statement has been often reaffirmed by the Supreme Court. Barreda v. Silsbee, 21 How. 146, 166, 16 L. Ed. 86 ; Justices v. Murray, 9 Wall. 274, 277, 19 L. Ed. 658; Miller v. Life Ins. Co., 12 Wall. 285, 300, 20 L. Ed. 398; Insurance Co. v. Comstock, 16 Wall. 258, 269, 21 L. Ed. 493; Insurance Co. v. Folsom, 18 Wall. 237, 249, 21 L. Ed. 827; Railroad Co. v. Fraloff, 100 U. S. 24, 31, 25 L. Ed. 531; Lincoln v. Power, 151 U. S. 436, 438, 14 Sup. Ct. 387, 38 L. Ed. 224; Chicago, Burlington & Q. R. Co. v. Chicago, 166 U. S. 226, 246, 17 Sup. Ct. 581, 41 L. Ed. 979; Capital Traction Co. v. Hof, 174 U. S. 1, 9, 19 Sup. Ct. 580, 43 L. Ed. 873.
This appellate court, therefore, has no power to re-examine the issue of fact whether or not the employer’s statement became a part of the indemnity contract. The only way in which that issue can be lawfully re-examined is by the grant of this court of a new trial by a jury on account of an error in law at the former trial. The üEtna Company has the constitutional right to a trial of that issue by a jury; that is to say, by a trial court consisting of a judge and a jury, a court presided over by a judge, who assists and directs the jury and makes Ms rulings upon the admission and rejection of evidence and announces the rules of law which govern the trial in the trial court where the parties and witnesses are present and ready to submit their proof and conform their acts to those rulings. A jury trial is not a trial by 12 men, nor by an appellate court, but by 12 men presided over *566by a judge, who makes his rulings in the course of the trial while witnesses and parties are present and ready to act.
The reason why the appellate court may not lawfully disregard conceded errors properly assigned, because there were counter errors-,, is that the litigants have the right to correct rulings at the trial and not in the appellate court alone, to the end that they may know,, while they are trying the case, while they have their witnesses and evidence at hand, to what issues- to direct their proof and how to conduct their trial in view of the rules of law which the court finds control the hearing. One has no just and fair trial by jury according to the course of the common law who is compelled to go to the jury under erroneous rulings and instructions, and, when right rulings are announced by an appellate court, is deprived of all opportunity to present his witnesses and his evidence in the light and knowledge of the correct rulings. No better illustrations of this rule can be found than the case at bar, in which it seems to me it is to be disregarded, and the cases from the Supreme Court which follow, in which it is asserted and applied.
At the trial below the • court received in evidence, upon the issue of fact whether or not the statement became a part of the contract of indemnity, 12 letters, 2 other writings, and more than 30 pages of oral testimony, and then admitted in evidence the statement, and held, and charged the jury, that it was a part of the contract of indemnity. Of course, when the court below admitted the statement in evidence and held that the proof which had been presented made it a part of. the contract, the iFtna Company offered no more evidence upon that issue. If the court had held otherwise, the .¿Etna Company would have had the opportunity to introduce, and doubtless it would have introduced, other evidence to establish the fact, for the record strongly indicates that there was such. That company relied, however, as it had a right to rely, upon the ruling of the court that this fact was established, and upon that basis it prepared its argument and presented its case to the jury. !If, after receiving all this evidence and holding this fact established, the court below had rejected it in its charge and had instructed the jury that it did not establish the fact, it would have committed reversible error, because it would thereby have deprived the ¿Etna Company of the opportunity to supply its place with better testimony or to supplement it with other testimony, and also of its opportunity to prepare and argue its case to the jury upon the decisive issues in the case alone. Harkison v. Harkinson, 41 C. C. A. 201, 101 Fed. 71.
In a trial according to the course of the common law, every litigant is entitled, before he goes to the jury, to a ruling upon the admissibility of his evidence and upon its sufficiency to be submitted to the jury to establish the issuable fact to which it is directed, to the end that he may have an opportunity to produce other and better evidence, if necessary, and to properly prepare and argue his case to the jury.
If this court now withdraws all the ¿Etna Company’s evidence upon this crucial issue from the case, or if it here adjudges it insufficient to establish the fact which the court below held it did establish, that *567-company is thereby deprived of its rightful opportunity to produce other and better evidence and to properly prepare and argue its case to the jury.
In Deery v. Cray, 72 U. S. 795, 806, 807, 18 L. Ed. 653, the court erroneously rejected a deed offered by the plaintiff. The defendants then introduced in evidence a deed and a chain of title thereunder which established a perfect title in them, even if the plaintiff’s deed was admitted in evidence, and when he sued out a writ of error they met him with the proposition that the rejection of his deed, if erroneous, was conclusively shown to have been error without prejudice. But the Supreme Court overruled the position, upon the ground that, while it appeared by the record that the error was not prejudicial, it might not have appeared so if the plaintiff’s deed had not been rejected, because she might then have proved that the defendants' deed was a forgery or have established some other fact fatal to it. The case is not only persuasive, but controlling, here, for, if it now appears that there was no substantial evidence that the employer’s statement became a part of the contract, the iEtna Company might and doubtless it would have produced other evidence that it was so, if the court below had not held that its evidence was sufficient to establish that fact and submitted to the jury the issue of its breach upon that assumption. To the same effect is Peck v. Heurich, 167 U. S. 624, 629, 17 Sup. Ct. 987, 42 L. Ed. 302.
Again, the error of the court below, if any, in receiving the evidence and holding it to be conclusive that the employer’s statement became a part of the contract, is not reversible here, because the Crowe Company sued out no writ of error, and a defendant in error who does not sue out a writ of error himself cannot, by assigning cross-errors, or by brief or argument, confer jurisdiction upon an appellate court to consider, review, or decide rulings against him in the court below. Bolles v. Outing Co., 175 U. S. 262, 268, 20 Sup. Ct. 94, 44 L. Ed. 156; Cleary v. Ellis Foundry Co., 138 U. S. 612, 614, 10 Sup. Ct. 223, 33 L. Ed. 473; Canter v. American, etc., Ins. Co., 3 Pet. 307, 318, 7 L. Ed. 688; Chittenden v. Brewster, 2 Wall. 191, 196, 17 L. Ed. 839; Loudon v. Taxing District, 104 U. S. 771, 774, 26 L. Ed. 923; The Maria Martin, 12 Wall. 31, 40, 20 L. Ed. 251; Clark v. Killian, 103 U. S. 766, 769, 26 L. Ed. 607; U. S. v. Blackfeather, 155 U. S. 180, 186, 15 Sup. Ct. 64, 39 L. Ed. 114; The Stephen Morgan, 94 U. S. 599, 24 L. Ed. 266; Building & Loan Ass’n v. Logan, 14 C. C. A. 133, 134, 66 Fed. 827, 828; Guarantee Co. v. Phenix Ins. Co., 124 Fed. 170, 59 C. C. A. 376; Pauly, etc., Mfg. Co. v. Hemphill Co., 10 C. C. A. 595, 600, 62 Fed. 698, 703.
In Chittenden v. Brewster, 2 Wall. 191, 196, 17 L. Ed. 839, the plaintiff appealed, and the defendant attempted, as here, to defeat Ills appeal because he had failed to prove facts essential to his case, to wit, the issue and return unsatisfied of an execution; but the Supreme Court refused to consider this failure of proof or the error which the appellees averred because the latter had not appealed, and ..said:
*568“If the appellees desired to avail themselves of this error in the decree, they should have brought a cross-appeal. By omitting to do so, they admit the correctness of the decree as to them. The case stands before ⅛¾ appellate tribunal the same as if the error had been waived at the hearing.”
In Cleary v. Ellis Foundry Co., 132 U. S. 612, 10 Sup. Ct. 223, 33 L. Ed. 473, the writ of error was sued out by the plaintiff; but the plaintiff had proved no case, because the evidence conclusively established the fact that his cause of action was barred by the statute of limitations, and the defendant had saved this error by objection and exception, but had sued out no writ of error. The Supreme Court held that it could not take cognizance of or hear this objection, and it affirmed the judgment against the defendant.
In Bolles v. Outing Co., 175 U. S. 262, 268, 20 Sup. Ct. 94, 44 L. Ed. 156, the plaintiff sued out a writ of error, and the defendant urged two defenses, which, if sustained, were fatal to his recovery; but it had not sued out a writ of error. The Supreme Court said:
“It is sufficient to say of these that the defendant did not take out a writ of error, and cannot now be heard to complain of any adverse rulings in the court below.”
So imperative and indubitable was this rule found to be, after briefs, arguments, and deliberate consideration, that, in a case in which the defendant below sued out a writ of error, the plaintiff, without suing out a writ, argued and insisted in its brief that a judgment against it could not stand because there were errors in the rulings of the court below against it upon the trial, and this court refused to consider or review these rulings, and ordered judgment against the plaintiff, that we were compelled to hold upon a writ of error subsequently sued out by the plaintiff that the judgment we had directed must be reversed for the very errors which the plaintiff had tried to present in answer, to the first writ, and that our judgment upon that writ did not render the questions which these errors presented res adjudicata. Guarantee Co. v. Phenix Ins. Co., 124 Fed. 170, 59 C. C. A. 376; Wickliffe v. Buckman, 12 B. Mon. (Ky.) 424; Smith v. Bogenschultz, 14 Ky. Law Rep. 305, 20 S. W. 390, 391.
When a case comes to an appellate court upon a writ of error of one party only, the errors in his favor are waived by his opponent, and the question for the appellate court is: Were the rulings challenged by the writ and the assignment of errors erroneous, upon the assumption that those not thus challenged were correct? And the coal company has no right in this case to the consideration and review of the rulings against it upon the admission, or upon the effect of the evidence offered and received to establish the fact that the employer’s statement was the inducement and a part of the contract of indemnity.
Moreover, if there was no evidence that the statement was a part of the indemnity contract, the submission to the jury of the questions upon its breach and the charge of the court upon them constituted fatal and prejudicial errors, because they tended to withdraw the attention of the jury from the issues actually involved, and to lead them to decide the case upon false issues, and in that way to -reach an erroneous result. Every litigant has the legal right to a fair and impartial *569trial of the issues which his case presents according to the law and the evidence applicable to those issues alone. The submission to the jury for their consideration of extraneous issues or of evidence which is neither relevant nor material to the questions upon trial is a violation of this right, and it constitutes a fatal error, because it tends to withdraw the attention of the jury from the issues involved, and to lead them to decide the case upon false issues, and in that way to reach an erroneous result. Northwestern Life Ins. Co. v. Stevens, 18 C. C. A. 107, 112, 71 Fed. 258, 263; Railroad Co. v. Houston, 95 U. S. 703, 24 L. Ed. 542; Railroad Co. v. Blessing, 14 C. C. A. 394, 398, 67 Fed. 277 281; Union Pac. R. Co v. Field, 137 Fed. 14, 15, 69 C. C. A. 536, 537; Frizzell v. Omaha St. Ry. Co., 59 C. C. A. 382, 381, 121 Fed. 176, 178; Equitable Life Assur. Co. v. McElroy, 28 C. C. A. 365, 376, 83 Fed. 631, 642; Sparks v. Territory of Oklahoma, 146 Fed. 371, 373, 76 C. C. A. 591.
The majority argue that the error of the submission of these false issues cannot be considered, because it was invited by, was favorable to, and was not assigned as error by, the Jv'tna Company; but the Arina Company appears to me to have objected to, and to have assigned as error, the submission of these issues to the jury, when it requested a peremptory instruction that they should not he submitted, and that the court should direct a verdict in its favor. However this may be, the ruling which makes these issues false is not yet made, and will not be made until the opinion in this case is filed. It is in argument to persuade against, and if possible to prevent, this court from affirming the judgment, on the ground that the ruling of the court below" that the employer’s statement was a part of the contract was erroneous, and to prevent it from thereby making the issues under that statement false, that the contention is made that, even if that conclusion were reached, there would still be reversible error in the trial, because under that holding the case would have been submitted to the jury upon false issues. It cannot be necessary to object, except, and assign error to the possible ruling or decision of an appellate court which opposing counsel seek to secure before it is announced in order to be heard to present reasons why it ought never to be made.
The considerations and decisions which have now been presented have led my mind to this conclusion. The conceded error of the court in refusing to instruct the jury, as requested, that the evidence conclusively established the breach of the covenants of the employer’s statement, when it had held and charged that this statement constituted the basis and a part of the contract of indemnity in suit, entitles the Arina Company to a new trial of this case, even if the latter ruling was erroneous, and there was no substantial evidence to sustain it (1) because a refusal to grant a new trial on the latter ground deprives the Arina Company of a jury trial of its case according to law without error, in that it deprives it of notice and knowledge of the incompetency and insufficiency of its evidence, which the trial court held competent and sufficient, at the time of and during the trial, while witnesses and evidence are at command, and there is yet time and opportunity to present them, and of its opportunity to replace or supple*570ment its insufficient evidence and to prepare and present its evidence and its case to .the jury with knowledge of the correct rulings of law applicable to its trial, and thus deprives it of undeniable fights, opportunities, and attributes of every fair trial by jury; (8) because the error, if any, in the ruling that the statement is a part of the contract,, is not challenged by writ of error; and is not reviewable in this case; and (3) because, if it were error, and were reviewable, there would still be reversible error in the trial, in that the case was submitted to the jury under false issues and erroneous instructions.
3. There was substantial evidence, sufficient to sustain the verdict of a jury, that the statement was the inducement of, and a part of, the contract of indemnity made in March, 1908, renewed in June, 1903, and that question was for the jury, and not for the court below, nor for this court.
The record discloses these uncontradicted facts: The original bond. indemnified the Crowe Company from June 1, 1901, to June 1, 1908. The indemnity was extended from June 1, 1908, to June 1, 1903, by a renewal receipt, which was delivered to the Crowe Company on March 18, 1903. It was again extended from June 1, 1903, to June 1, 1904, by a renewal receipt dated June 30, 1903. The embezzlements-for which the Crowe Company recovered in this suit extended from May 88, 1903, to April 88, 1904, and a part of them fell under the first, and a part under the second, renewal. If there was any evidence that the employer’s statement became a part of the' contract which worked the first renewal, it cannot be disregarded, because that covers a portion of the embezzlements recovered. One Mastín was a member of a firm1 of insurance agents at Kansas City, the place of business of the Crowe Company, and a personal friend of J. R. Crowe, the president of that company. The ¿Etna Company’s place of business was Hartford, in the state of Connecticut. Mastin’s firm were the agents of the ¿Etna-Company, delivered to Crowe the original bond, and issued other insurance from other companies to the Crowe Company. He testified that all the business between the ¿Etna Company and the Crowe Company was conducted through his firm; that, whenever they would receive a letter from the ¿Etna Company which involved answering, they would inform the Crowe Company, and then, after seeing them, would ordinarily report or write back to the ¿Etna Company; that it was-necessary, he believed, to have those employers’ statements signed, or was the custom of the companies to have them signed, before they issued the renewals; and that the letters between the ¿Etna Company and the Crowe Company and their inclosures were sent and received. On August 86, 1908 — the bond had expired on June 1st preceding- — the Crowe Company had no existing indemnity, and Mastin’s firm wrote the ¿Etna Company that the Crowe Company wanted the bond continued; but Crowe was out of town, and they could not get an employer’s statement from him. On October 3, 1908, the ¿Etna Company answered, inquired if Crowe had returned, and requested an employer’s renewal certificate. On October 13, 1908, Mastin’s firm wrote that they had no employer’s statements and asked for a supply. On October 17, 1908, the ¿Etna Company answered, inclosed an employer’s renewal certificate under bond F. 1,774, David C. Graves, asked them to. *571have it completed in full by the company, and added: “If everything" is satisfactory, renewal receipt will be issued continuing bond in force for the remaining year.” On November 11, 1902, Mastin’s firm wrote the ¿Etna Company and inclosed the employer’s renewal certificate signed by the Crowe Company. On November 25th following, the ¿Etna Company answered that it had received the letter of November 21st and the employer’s renewal certificate therein, but wrote:
“Upon examining this certificate, we find that there is no mention in same as to when the last examination or audit took place. We therefore cannot issue this renewal receipt until we have some advice when the accounts were last audited. We inclose herewith another blank, which please have filled in properly, and if everything Is satisfactory, renewal receipt will be issued.”
On December 22, 1902, Mastin’s firm wrote the ¿Etna Company and inclosed a second employer’s renewal certificate signed by the Crowe Company. This certificate stated that Graves’ accounts were last examined or audited on August 1, 1901, by II. D. Buchanan and were found correct up to July 1, 1901. On December 26, 1902, the ¿Etna Compaq answered thus:
“We have for acknowledgment your favor of the 22d inst. inclosing employer’s renewal certificate in connection with our bond No. F. 1,774, covering Mr. David C. Graves, in favor of the J. It. Growo Coal & Mining Company. This bond was not renewed when it expired on June 1, 1902, owing to the fact of our inability to obtain employer’s renewal certificate properly made out. The renewal certificate which you have now forwarded us is properly made out, but we note that the last examination or audit of Mr. Graves’ account took place on August 1, 1901. This is entirely unsatisfactory to us as tile failure to make an audit in a period of nearly a year and a half is from our point of view a serious drawback to renewing this business. We might also say that, when this bond was originally issued, we did not obtain the proper form of employer’s statement for this class of risk, as you sent us the short form F. 3 which is used for fraternal societies and the like, instead of form F. 4, which is more complete. We are, therefore, unable to determino how often the employers propose to have an audit made. We sum, the matter up then to the effect that if it is desired that this bond shall be renewed, a complete and systematic audit of Mr. Graves’ account must be made in a businesslike way, and the employers to fill out and send to us, through your office, the inclosed blank form of employer’s statement, F. 4.”
The blank form of employer’s statement F. 4 is the employer’s statement of February 24, 1903, which is the subject of this litigation. It was inclosed in this letter. The Crowe Company then caused an examination and audit to be made of Graves’ accounts, filled out and signed this employer’s statement F. 4, and on February 25, 1903, Mastin’s firm inclosed it in this letter and sent it to the .¿Etna Company:
“Please find enclosed employer’s renewal "certificates — Indemnity Bond — No. 1774 — David C. Graves in favor of J. R. Crowe C;oal & Mining Co. The above-named firm have liad their books audited, and everything is found to be in perfect order. Trusting you will see fit to renew the bond, beg to remain, Yours very truly.”
On March 2, 1903, the ¿Etna Company answered:
“We have your favor of the 23th inst. inclosing employer’s statement in connection with bond F. 1,774 David C. Graves, in favor of the -T. R. Crowe Goal & Mining Company, and in reply take pleasure in handing you renewal receipt renewing same to June 1, 1903, which we trust will be found satisfactory.”
*572On March 5, 1903, Mastin’s firm returned the renewal receipt, and wrote that they thought “the bond should be renewed from the date on which they finished auditing their books.” To this letter the iEtna Company replied on March 9, 1903, that the renewal from June 1, 1902, covered past embezzlements during that time, if any, that many of those would not be covered by a renewal from February, 1903, and added:
“This feature is invariably lost sight of as a general rule, and if you will point this out to the J. R. Crowe Coal & Mining Company they will understand the situation and take the renewal up, continuing bond If. 1,774 without any break. Of course it is immaterial to us. We could issue a new bond from today covering Mr. Graves, but we would require to have some new papers. We return the renewal certificate herewith, and shall be glad to hear from you if this is satisfactory. If not, we shall be glad to issue a bond from this date if everything is in order.”
Mastin’s firm received the renewal receipt in this letter on March 12, 1903, delivered it to the Crowe Company, and the contract was closed. On June 30, 1903, the bond was again continued in force to June 1, 19.04, subject to all the covenants and conditions thereof.
The court below was of the opinion that this evidence conclusively established the fact that the statement of February 24, 1903, was the inducement of, and became a part of, the contract of renewal of March .12, 1903, and that the June renewal continued this contract of indemnity. If the question were for the court, I should be unable to resist the same conclusion. It is true, as pointed out by the majority, that the statement contains references to a bond as:
“Amount of bond, $5,000; to date from February 1, 1903, to February 15, 1904.”
“Employer’s statement covering application made by David O. Graves of Kansas City, Bio. to the IEtna Indemnity Company, Hartford, Conn., for an indemnity bond.”
“It is hereby agreed by the undersigned that the above answers are to be taken as conditions precedent to and as the basis of execution of said indemnity bond, and in consideration of the issuance of said indemnity bond by the company, it is further agreed that the checks and supervision above described shall be observed.”
But these statements must be read in the light of the letters, of the acts of the parties, and of the testimony in this case, in order to rightly determine the question whether this statement was made and received to procure a new bond or to secure the renewal of the old one, and when this is done the evidence appears to me to be conclusive. The letters show that there was but one subject of this negotiation. None of them writes or treats of a new bond. Every one of them writes and treats of a renewal of the old bond. All the letters from Mastin’s firm ask for the renewal or are written to procure it. All the letters of the iEtna Company prescribe the terms upon which it will renew the old bond. None of them prescribes any terms for the issuance of a new bond. None of them mentions a new bond, except the letter of March 9th, in which the renewal was finally returned,. and that states that the issue of such a bond would require new papers. From August 26, 1902, until December 26, 1902, the Crowe Company was constantly seeking a renewal of the old bond, never a new bond. For *573this purpose it bad executed and sent to the ¿Etna Company two employer’s renewal certificates. If one of those certificates had been accepted, and a renewal receipt had been issued upon it, would not that certificate have conditioned and become a part of the contract of indemnity? The ¿Etna Company rejected these certificates. The reason why the employer’s statement of February 24th is in the form which has been recited and repeatedly refers to an indemnity bond is made plain by the ¿Etna Company’s letter of December 26'th. It there states that it requires this form of employer’s statement because it did not originally secure this, the proper form of statement when the original bond was made. During all this time the Crowe Company had been seeking a renewal of the old bond. The ¿Etna Company had been prescribing the terms on which it would issue one, and in the letter of December 26, 1902, it gave its ultimatum. It rejected the second certificate. It sent the blank form of employer’s statement here in issue and wrote:
“We sum the matter up, then, to the effect that if it is desired that this bond shall be renewed, a complete and systematic audit of Mr. Graves’ account must be made in a businesslike way and the employers to fill out and send to us, through your office, the enclosed blank form of employer’s statement, If. 4.”
The Crowe Company caused the audit to be made, filled out the statement, signed it, and sent it to the ¿Etna Company in the letter of Mastin’s firm, which recited its transmission, the fact that the audit had been made, and closed with the words, “Trusting you will see fit to renew the bond, beg to remain, Yours very truly.” The Crowe Company had thus accepted and complied with the terms on which alone the ¿Etna Company had informed it that it would renew the bond, and the ¿Etna Company then immediately issued the renewal receipt, which after the letters of March 5th and March 9th the Crowe Company accepted without change. To my mind there is substantial and compelling evidence that the employer’s statement of February 24th was the inducement and became a part of the contract of indemnity evidenced by this renewal receipt. The ¿Etna Company had made it the sine qua non of the renewal. The Crowe Company had furnished it. The ¿Etna Company had received it and had issued its renewal receipt upon it. This seems to me to make it the inducement of, and a part of, the contract of indemnity.
If, however, this be not so, there was certainly sufficient evidence here under the established rules of law to entitle the ¿Etna Company to a trial of this issue by the jury. Wherever the evidence upon a matter of fact is of such a character that reasonable men in the exercise of an impartial judgment 'may honestly reach opposite conclusions, the question is for the jury. Railway Co. v. Ives, 144 U. S. 408, 417 1; Chicago & N. W. Ry. Co. v. De Clow, 124 Fed. 142, 145, 61 C. C. A. 34, 37; Travelers’ Ins. Co. v. Melick, 65 Fed. 178, 181, 12 C. C. A. 544, 547, 27 L. R. A. 629; Railway Co. v. Jarvi, 3 C. C. A. 433, 437, 438, 53 Fed. 65, 69; Fuel Co. v. Danielson, 6 C. C. A. 636, 57 Fed. 915; Railroad Co. v. Kelley’s Adm’rs, 3 C. C. A. 589, 593, 53 Fed. 459, 463; Railway Co. v. Ellis, 4 C. C. A. 454, 456, 54 Fed. 481, 483. Two reasonable men, the majority of this court, are of the opinion *574that this evidence Jails to establish that the employer’s statement became a part of the indemnity contract; one reasonable man, the trial judge, who saw the witnesses and noted all those matters not capable of record, whose opportunities to form a correct judgment were superior to those of any of the members of an appellate court, to whose deliberate opinion upon such a question the Supreme Court says that the appellate court should pay large'respect (Patton v. Texas & Pac. R. Co., 179 U. S. 658, 660, 21 Sup. Ct. 275, 45 L. Ed. 361), was of the opinion not only that there was substantial, but also that there was conclusive, evidence that the statement became a part of the - contract. The writer is of the opinion that the great preponderance of the evidence sustains this conclusion. Is it not then true that reasonable men may honestly differ upon the effect of this evidence, and that for that reason the question of fact is for the jury, and should be returned to them for tidal?
Moreover, this issue of fact is one peculiarly within the province of the jury according to the established rule of decision. The question is what the effect of the 12 letters, the 2 renewal receipts, the employer’s statement, and the 30 pages of oral testimony is, to determine the question whether the employer’s statement is a part of the indemnity contract. In Rankin v. Fidelity Trust Co., 189 U. S. 242, 253, 23 Sup. Ct. 553, 557, 47 L. Ed. 792, the Supreme Court said:
“Although the construction of written instruments is one for the court, where the case turns upon the proper conclusions to be drawn from a series of letters, particularly of a commercial character, taken in connection with other facts and circumstances, it is one which is properly referred to a jury.”
In Etting v. Bank, 11 Wheat. 59, 6 L. Ed. 419, Chief Justice Marshall said:
“Although it is the province of the court to construe written instruments, yet when the effect of such instruments depends, not merely on the construction and meaning of the instruments, but upon collateral facts in pais and extrinsic circumstances, the inferences of fact to be drawn from them are to be left to the jury.”
And this rule is sustained by a flood of authority. McNamee v. Hunt, 87 Fed. 298, 301, 30 C. C. A. 653, 655; West v. Smith, 101 U. S. 263, 270, 25 L. Ed. 809; Brown v. McGran, 14 Pet. 477, 493, 10 L. Ed. 550; Goddard v. Foster, 17 Wall. 123, 142, 21 L. Ed. 589; Drakeley v. Gregg, 8 Wall. 242, 268, 19 L. Ed. 409; Barreda v. Silsbee, 21 How. 146, 167, 16 L. Ed. 86; Turner v. Yates, 16 How. 14, 23, 14 L. Ed. 824; Richardson v. City of Boston, 19 How. 263, 270, 15 L. Ed. 639; Nash v. Classon, 45 N. E. 276, 277, 163 Ill. 409; Roberts v. Bonaparte, 20 Atl. 918, 73 Md. 191, 10 L. R. A. 689; Eureka Fertilizer Co. v. Baltimore, etc., R. Co., 27 Atl. 1035, 1036, 78 Md. 179; Gassett v. Glazier, 43 N. E. 193, 195, 165 Mass. 473; 1 Thompson on Trials, §§ 1086, 1113, 1114; 4 Wigmore on Evidence, § 2556.
For the reasons which have now been stated, the errors relative to the breach of the covenants in the employer’s statement were in my opinion prejudicial to the FFtna Company, this prejudice was not ex-, tracted by the errors in its favor, if any, relative to the admission and sufficiency of the evidence to establish the fact that the employer’s *575agreement was a part of the indemnity contract, and that company is entitled to a reversal of the judgment and a new trial of this issue.
There seems to me also to be error in the rulings of the court upon the question of notice. The bond required that:
“The company shall be notified in writing, addressed to the company, at its office, in the city o£ Hartford, Conn., of any fraudulent or dishonest act on the part of the employee which may involve a loss for which the company is responsible hereunder, immediately after the occurrence of such act shall have come to the knowledge of the employer.”
The first notice given to the zEtna Company was sent May 28, 1904, was received by the company on June 4, 1904, and it was that “we are having our books audited, and there appears to he every evidence that there will be a shortage in his [Graves’] accounts,” and it gave no other or further notice. The Crowe Company knew the'fact which this notice stated just as well and just as conclusively on the 2d day of May, 1904, as it ever knew it. Its agent and expert accountant who examined Graves’ accounts and discovered his dishonest acts commenced to do so on April 22, 1904. lie caused the bankbook to be balanced, compared it with the cashbook and the outstanding checks, and discovered that there wTas a shortage in Graves’ account of $212, and found unreceipted vouchers for the sum of $700 on that day and the day next succeeding. On April 23, 1904, he called Graves’ attention to the shortage of $212, and the latter admitted it. He asked him to explain the irregular vouchers, and he tried, but was unable to do so. Upon cross-examination this accountant testified that on April 23, 1904-, there was a plain shortage of $212 on the face of the books, that Graves admitted it, and that he was then satisfied that Graves had embezzled $700 on the unreceipted vouchers. On the afternoon of that day Graves voluntarily delivered his keys to his employer, left its service, and on May 1, 1901, he died. This testimony is undisputed, and it seems to me to establish beyond doubt the fact that the Crowe Company had such knowledge of a dishonest act of Graves that might involve a loss for which the /Etna Company was responsible as early as May 2, 1901 ; that it was its duty to notify that company immediately thereafter; and that a notice on June 2, 1904, was too late. The court was requested so to charge, and in my opinion its refusal was error.
When the evidence is undisputed, the question, what is an immediate notice is a question of law for the court, and a notice of 30 days after knowledge of a dishonest act is not an immediate notice. National Surety Co. v. Long, 125 Fed. 887, 60 C. C. A. 623; U. S. Fidelity, etc., Co. v. Rice, 148 Fed. 206, 78 C. C. A. 164; Smith, etc., Mfg. Co. v. Travelers’ Ins. Co., 171 Mass. 357, 50 N. E. 516; National Construction Co. v. Travelers’ Ins. Co., 176 Mass. 121, 57 N. E. 350; Cook v. Ins. Co., 183 Mass. 50, 66 N. E. 597; Wiggins v. Burkham, 10 Wall. 129, 133, 19 L. Ed. 884; Toland v. Sprague, 12 Pet. 300, 325, 9 L. Ed. 1093.
The case of American Surety Co. v. Pauly, 170 U. S. 133, 18 Sup. Ct. 552, 42 L. Ed. 977, is distinguishable from that at bar, in that there was a conflict of evidence as to the time when the acts of dishonesty were first discovered while in this case there seems to me to be no *576such conflict. In that case notice was given on May 23d. The court charged that, if the act of dishonesty was not discovered until the middle or latter part of May, the jury might find that the notice was given with reasonable promptness; but that, if the discovery was made on March 2d, they must find otherwise. Pages 146, 147, of 170 U. S., pages 557, 558, of 18 Sup. Ct. (42 L. Ed. 977). The Supreme Court was reviewing this charge and assumed that the act was first discovered the middle or last of May. The case of American Surety Co. v. Pauly, 170 U. S. 160, 18 Sup. Ct. 552, 42 L. Ed. 977, arose upon a similar conflict of evidence.
And, finally, if this question of notice were open for a finding by the jury, the court below erred when it charged them:
“Sometimes the suspicions might have arisen, and there might have been some facts that indicated, that the party was in arrears, and dishonestly so, and suspicions might exist that he was guilty of embezzlement; but subsequent developments might explain that away. So that the coal company, after suspicions had arisen, being prompt, had the right to pursue the inquiry to the end and find the true state of affairs, and then, if it gave notice to the indemnity company, notice within the meaning of this bond was immediately given.”
The evidence in the case was that the Crowe Company had investigated from April until September, had discovered various defalcations which amounted to more than the penalty of the bond, but had never pursued the investigation to the end or discovered the true state of affairs, so that the effect of the charge was that no notice was required until the investigation ceased. In my opinion, this was a clear and plain error. The true rule is that the obligee in such a bond is required to give the notice immediately after he receives knowledge of such facts as would lead a man of reasonable prudence to believe that it was probable that the employé had committed an act of dishonesty or of fraud which might result in a loss by the obligor upon the bond. It is -true that in other parts of the charge the court stated some general rules of law more nearly correct; but they failed to extract the vice of this specific and controlling charge, which was directed at the pith of the issue, to* the effect that, if the Crowe Company gave notice after it had completed its investigation and had discovered the true state of affairs, that was an immediate notice, when the evidence was that it had discovered acts of dishonesty months before it ceased its investigation. The vice of a wrong rule in a charge of a court is not extracted by the fact that the right rule was also given, because it is impossible to tell by which the jury was governed, and the presumption is that error produces prejudice. Railway Co. v. Needham, 3 C. C. A. 129, 147, 52 Fed. 371, 377; Railroad Co. v. Farr, 6 C. C. A. 211, 216, 217, 56 Fed. 994, 1000; Armour & Co. v. Russell, 75 C. C. A. 416, 144 Fed. 614.

 12 Sup. Ct. 679, 36 L. Ed. 485.