
    Buffalo Steel Company, Appellant, v. Ætna Life Insurance Company, Respondent.
    Fourth Department,
    April 30,1913.
    Insurance — indemnity insurance — exemption from liability for injuries to person employed in violation of law — action by insured for amount of judgment recovered against it — estoppel — defense of negligence action by insurer.
    In an action iipon an indemnity policy of insurance, which provided that it should not cover loss or expense resulting from injuries to “ any person employed in violation of law, or any child under the age of fourteen years,” to recover the amount of a judgment recovered against the plaintiff and paid by it to an employee for personal injuries, a finding in the negligence action that the employee was under sixteen years of age, that the machine which he was permitted to operate and which caused his injuries was dangerous, taken in connection with a general verdict in . favor of such employee, establishes that his employment was unlawful and in violation of the policy, and a judgment dismissing the complaint should be affirmed.
    The insurance company under the circumstances by assuming the defense of the negligence action, pursuant to the provisions of its policy, is not estopped from denying its liability thereunder.
    . Appeal by the plaintiff, the Buffalo Steel Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of Erie on the 13th day of February, 1912, upon the decision of the court rendered after a trial at the Erie Trial Term, a jury having been waived dismissing the complaint upon the merits.
    
      Simon Fleischmann, for the appellant.
    
      Alfred L. Becker, for the respondent.
   Kruse, J.:

The action is upon an indemnity policy of insurance to recover the amount of a judgment paid' by the plaintiff, recovered against it by Bertram Tetter, a boy employed by plaintiff, for personal injuries sustained by him while at work in its rolling mill and steel plant, through the negligence of the plaintiff. The defendant indemnity company contends that the claim is not covered by the policy.

The plaintiff operates a steel plant. The boy was injured while operating a machine. One of his eyes was put out. The jury specifically found that the machine was a .dangerous machine within the meaning of the Labor Law, and that the boy was not of the age of sixteen years at the time of. the accident and rendered a general verdict in his favor.

The accident occurred February 28, 1901, at seven-fifteen in the evening. The policy covers the plaintiff’s liability for loss or expense arising or resulting from claims upon the assured for- damages on account of bodily injury or death, accidentally suffered by reason of the operation of the trade or business therein described, by any employee or employees of the assured while within the factory, shop, yard or places therein referred to> upon certain terms and conditions therein mentioned, containing, under the heading of “Exclusions” the following: “B. This Policy does not cover loss or expense arising on account of or resulting from injuries or death to, or if caused by (1) Any person employed in violation of law, or any child under the age of fourteen (14) years where there is no legal restriction as to age of employment.”

The policy requires the assured td give notice of accident, and in case suit is brought to forward the papers served to the indemnity company, which agrees at its own cost to defend ■ the suit unless it elects, to settle or pay the assured the indemnity, as provided in the policy. The summons and complaint served upon the plaintiff were delivered to the defendant with a demand that the defendant take charge of the defense of the suit in accordance with the terms of the policy. The defendant prior to receiving the summons and complaint had made an investigation of the case, and the agents of the defendant notified the plaintiff-that it would take charge of the case, but if it should be decided that the boy was illegally in its employ, defendant would expect the plaintiff to satisfy any judgment which should be recovered, distinctly claiming that the claim of any one illegally in the employ of the plaintiff was not covered by the policy. ■ A few days thereafter the plaintiff’s president stated to a representative of the defendant that the defendant could go on with the case but that the plaintiff waived none of its rights, to which the defendant’s representalive replied, that the defendant did not wish to take away any of the plaintiff’s rights. Thereupon the defendant undertook the defense of the action, its attorneys appearing for the plaintiff in the action and defending the same and no attorney was employed by the plaintiff upon the trial or in the action prior to the rendering of the verdict therein. After the verdict the plaintiff, under a special arrangement and agreement with the defendant that none of its rights under the policy and its claim that the defendant was liable to it should be waived or prejudiced thereby, had its attorney participate with the attorneys employed by the defendant in the motion for a new trial and the appeal to the Appellate Division. The motion for a new trial was denied and the judgment was affirmed by the Appellate Division. The plaintiff paid the judgment, and upon the defendant’s refusal to repay the same to it, brought this action.

The defendant contends that the injured employee was employed and permitted to work in plaintiff’s factory in violation of law, in that: (1) He being between the ages of fourteen and sixteen years, was employed and permitted to work without an employment certificate issued and filed in the office of the employer as the Labor Law requires; (2) being under the age of sixteen years, was employed or permitted to work in the factory after five (sic) o’clock in the evening, in violation of section 77 of the Labor Law; (3) being under the age of sixteen years, was permitted to operate or assist in operating a dangerous machine, contrary to the provisions of section 81 of the Labor Law as it existed at the time of the accident.

In the employee’s action there was submitted to the jury as grounds of negligence and recovery against the employer, (1) negligent unlawful employment, and (2) negligent failure to "properly instruct and warn the boy against .the dangers in operating the machine. There is no specific finding to indicate upon which ground the verdict was rendered. It is found in this action that there Was no negligent employment, and it is argued that the course of the trial in the negligence action indicates that the age of the boy was but incidentally involved, and that the verdict was rendered not upon negligent employment under the Labor Law, but for failure to properly instruct and warn the boy, upon common-law liability. I will assume that the verdict was rendered upon the latter ground, but I think the claim is nevertheless outside the policy. As before stated, it was found in the negligence action that the boy was under sixteen years of age, and that the machine which he-was permitted to operate and which caused his injuries was dangerous. That of itself, in connection with the general verdict, establishes that his employment was unlawful. It is, however, further contended that the words “negligently ” or “ knowingly,” or their equivalent, should be implied or read into the exclusion clause before the words “employed in violation of law.” I do not think the clause can reasonably be given that construction. It plainly excludes claims for injuries to persons employed in violation of law. Not only was the statute violated in permitting the boy to operate a dangerous machine, but it was that very employment which caused his injuries. While it is true that if the employer believed, and was justified in believing, that, the boy was over sixteen years of age, as he represented himself to be, the employer could not be held liable to the boy in a civil action for negligence in employing him when he was under age (Koester v. Rochester Candy Works, 194 N. Y. 92), the employment was. nevertheless unlawful and a misdemeanor. (Penal Code, § 384-1; Penal Law, § 1275; People v. Taylor, 192 N. Y. 398.) An employer who employes a child to work in a factory or at a dangerous machine does so at his peril. Even if the employer has been imposed upon by the child or its parents respecting the age of the child., that does not relieve the employer from criminal liability if it turns out the child is under the age fixed by the Labor Law.

I am, therefore, of the opinion that the policy does not cover the claim in question. '

2. It is also urged that the defendant by taking charge of the negligence action and defending the same has waived, or estopped • itself from now claiming that the policy does not cover the judgment recovered in that action. That would be so but for the circumstances before referred to under which the defense was undertaken. I fully appreciate the force of the suggestions made by the learned counsel for the appellant, but it seems to me that unless we are prepared to reconsider our decision in the case of Mason-Henry Press v. Ætna Life Ins. Co. (146 App. Div. 181), we must decide this question against the appellant. In that case we reversed the judgment in favor of the assured. The case was again tried and our decision followed at the trial and the plaintiff was defeated. We affirmed that decision at our last January term (155 App. Div. 876) and the .case is now in the Court of Appeals. I think this case is no more favorable to the insured as regards the question now being considered than the Mason-Henry Press case.

I conclude that the judgment should be affirmed, with costs.

All concurred.

Judgment affirmed, with costs.  