Schultz

Appellees recovered judgment against appellant on an insurance contract issued by appellant on the life of one Lundell, in which appellees were named as beneficiaries.

A tonsillectomy was performed on deceased on May 12, 1928.

By an agreement effective September 15, 1936, appellant employed one Eller “for the purpose of canvassing for applications for insurance and annuity contracts in [appellant company] on the lives of persons who shall be satisfactory to the said Company, find for the purpose of collecting and paying over premiums on such insurance and annuity contracts when effected.”

On January 4, 1937, appellees and Lun-dell, the deceased, entered into an agreement organizing a partnership to be known as the Klamath Moulding Company to exist for 15 years. The agreement provided that each of the partners would insure his life, naming the other partners as beneficiary. Subsequently it was 'agreed that ap-pellee Schultz would obtain a policy for $10,000; that deceased would obtain a policy for $10,000; and appellee Sayre would obtain a policy for $5,000.

Dr. Merryman testified that about the middle of May, 1937, he examined deceased, found that deceased had an enlarged…