J. S. Stearns Lumber Co. v. Travelers Insurance Co.

Maesiiall, J.

The conclusion of the trial court that appellant became informed of the illegal employment by the-mere suggestion of the boy’s age by the mother on the trial of the first action, cannot be approved. The age of the-minor was not an issue before. At best, the fact was then involved in conflicting evidence. The mother testified one' way and the boy another. But, conceding that the mother’s testimony was the best, and should have been believed, it did not settle the question of whether he was illegally employed. The vital fact of whether he had a legal permit, was not' touched ripon by the evidence. So the court was not warranted in finding the illegal employment was established and brought to appellant’s attention on the first trial.

Employment of the minor without the proper permit, was. a serious misdemeanor. It was punishable by fine or imprisonment. The presumption, from appellant’s standpoint, was in favor of innocence. The mere evidence of the minor’s, age did not overcome that presumption,- or very much affect it. So the basic feature of the recovery is wanting.

Again, assuming that the. evidence of the boy’s age was sufficient to put appellant upon inquiry, if the particular matter was vital to its interest, it was not in this case because the-grounds of negligence were four in number. Had the claim *632 ant prevailed upon either of three, it would have been within the risks insured against. So, appellant was not, in any event, obliged to change its attitude toward respondent in the former action until judgment was rendered in the cimiit court, grounded on the particular circumstance. Even that did not put appellant to its election because the presumption against violation of law still persisted in its favor.

Probably the learned circuit court was misled by the suggestion in 154 Wis. 461 , 143 N. W. 160 , as to the boy having been illegally employed. We must presume that, had it been appreciated that the law of 1909 ruled, the inadvertence here would not have created the difficulty which seems to have occurred.

The further point might well be considered fatal to respondent’s case. It depended, in order to make out a case against appellant, upon estoppel. It had ample opportunity to plead it and should have done so as the very groundwork of liability. It did not do so. In such circumstances the estoppel is deemed waived.

While the rule suggested has been rather softened in recent years, and probably should be administered equitably, — not technically, when it comes to claiming the benefit of an estop-pel by a person, which would work considerable hardship if successful, in that it would enrich the one invoking it largely on account of acts of another but slightly, if at all, prejudicial to that one, such person should be held pretty strictly to the doctrine of waiver and estoppel as to his own conduct.

It may be said that waiver of the right to insist upon es-toppel, if there were one, by not pleading it, does not apply here because appellant waived that requisite by not objecting to evidence; but there was nothing to object to. Substantially all facts set forth in the complaint were admitted. No evidence was necessary to prove them. Evidence introduced simply substantiated the pleaded defense.

It must be appreciated that, in a case of this sort, the de *633 fendant does not lose his right by mere waiver. Valuable rights, involving large amounts of money, are not taken away by legal principles except upon substantial grounds. There may be mere waiver — action by one relied upon by another, and a change of attitude which does not involve any loss or prejudice to such other, whatever, — the intentional doing or failing to do an act with knowledge, actual or constructive, of the facts, involving voluntary relinquishment of a right, actually or constructively, within the knowledge of the relin-quisher. That is one thing. Pabst B. Co. v. Milwaukee, 126 Wis. 110 , 105 N. W. 563 ; McNaughton v. Des Moines L. Ins. Co. 140 Wis. 214, 224 , 122 N. W. 764 ; McDonald v. Markesan C. Co. 142 Wis. 251, 256 , 125 N. W. 444 ; Will of Rice, 150 Wis. 401, 468 , 136 N. W. 956 , 137 N. W. 778 ; Somers v. Germania Nat. Bank, 152 Wis. 210, 219 , 138 N. W. 713 . But it does not apply efficiently here, because there was neither knowledge, actual or constructive, of the facts. ITad it been otherwise, and the other element of waiver existed, without some substantial element of estoppel, it would not have benefited respondent.

Counsel cite to our attention Goodwillie v. London G. & A. Co. 108 Wis. 207 , 84 N. W. 164 , which is merely to the effect that such a clause as that in question is a limitation of liability, taking the loss outside of the risks insured against. That is conceded in this case. The authority has nothing to do with any controverted matter.

In each of the adjudications cited to us, which deal with the particular matter, the element of estoppel was very prominent and upon that, instead of waiver, in the technical sense, the defense of illegal employment was held inefficient. Tozer v. Ocean A. & G. Corp. 94 Minn. 478 , 103 N. W. 509 ; Humes C. Co. v. Philadelphia C. Co. 32 R. I. 246; Royle M. Co. v. Fidelity & C. Co. 126 Mo. App. 104 , 103 S. W. 1098 ; Employers' L. Ins. Corp. v. Chicago & B. M. C. & C. Co. 141 Fed. 962 ; Fairbanks C. Co. v. London A. Co. 154 *634 Mo. App. 327 , 133 S. W. 664 ; Globe N. Co. v. Maryland C. Co. 39 Wash. 299 , 81 Pac. 826 ; Glens Falls P. C. Co. v. Travelers’ Ins. Co. 162 N. Y. 399 , 56 N. E. 897 .

In the first of those cases the insurance company, from first to last, knew all the facts, yet insisted upon carrying on the litigation and neglected to notify the assured of an opportunity, which was presented, of making an advantageous settlement.

In the next case, the facts were all known to the insurance company, but, it, through mistake of law;, supposed itself liable and handled the litigation to the practical exclusion of the employer.

In the next, with full knowledge of all the facts, the insurance company conceded its liability until the doors were fully closed for the assured, to do anything for protection in its own behalf.

In the last case, the insurance company took charge of the litigation and continued it down to the trial and then abandoned it under such circumstances as to leave defendant unable to make a defense and so the case -went, practically, by default. Thus it will be seen that prejudicial features-which operated, efficiently, in the many cases cited were entirely absent here.

Recapitulating, appellant did not have knowledge, of the facts until after the first case was concluded. It was not obliged to search therefor, because respondent agreed to furnish the information thereof and it had a right to assume, until informed to the contrary, that respondent had not violated the law. The condition upon which respondent relied to estop appellant from having the benefit of its pleaded defense, it created by not giving the former full information at the start; moreover, by misleading respondent as to the age of the boy and his having a permit. There is not, under the circumstances any presumption of prejudice to the interests of respondent because of its carrying on the litigation as it *635 did. Especially is that so, since there were three grounds of liability insisted upon, which were within the risks insured against. There was no affirmative evidence of prejudice,— not a particle. The condition which respondent created may have caused appellant to defend the first action at considerable expense, when had it been fully informed, it would not have done so. The doctrine of estoppel applies quite clearly to respondent’s position but not to appellant’s.

By the Court. — The judgment is reversed, and the cause remanded with directions to dismiss with costs.