author: GORDON, J.

text:
    Baker, Respondent, v. Northwestern National Casualty Company, Appellant.

      January 4 —
    February 2, 1965.

      For the appellant there were briefs and oral argument by Ráy T. McCann of Milwaukee.
    For the respondent there was a brief by Aberg, Bell, Blake & Metzner of Madison, and oral argument by Carroll Metzner.

       Motion for rehearing denied, with costs, on March 30, 1965. Previously reported in 13 Wis. (2d) 637, and 22 Wis. (2d) 77.

   GORDON, J.

The Insurer’s Violations of Duty.

In ruling upon Northwestern's motion for summary judgment, this court considered various duties on the part of an insurer which relate to whether it has acted in good faith in failing to settle the claim. Baker v. Northwestern National Casualty Co. (1963), 22 Wis. (2d) 77, 125 N. W. (2d) 370. Referring to Hilker v. Western Automobile Ins. Co. (1930, 1931), 204 Wis. 1, 231 N. W. 257, 235 N. W. 413, we discussed three specific duties on the part of the insurance carrier.

The first duty recited in the 1963 Baker Case (p. 82) was that the insurance company “must have made a diligent effort to ascertain the facts.” The second duty discussed (p. 83) was that devolving upon the insurer, after an investigation reveals the probability that a recovery will exceed the indemnity, “ ‘to indicate such fact to the insured, to the end that he may take such steps as may be open to him for his own protection’ ”. The third duty considered (p. 83) was “that of keeping the' insured timely and adequately informed of any offers of. settlement received from the claimant and of the progress of any settlement negotiations.”

The first question of the special verdict consisted of three parts and inquired into the jury’s resolution of the factual issues surrounding the alleged violation by Northwestern of its duties described above. The following are the questions and the jury’s answers thereto:

"Question One:
“Was the defendant, Northwestern National Casualty Company, negligent with respect to:
“a) Failing to make a diligent effort to ascertain the facts upon which an intelligent and good faith evaluation could be made of the claim of Robert Walker? Answer: Yes.
“b) Failing to indicate to its insured, Frederick L. Baker, Jr., that a recovery could exceed his policy limits to the end that he might take such steps that might be open to him for his own protection? Answer: Yes.
“c) Failing to keep its insured, Frederick L. Baker, Jr., timely and adequately informed of any offers of settlement received from claimant, and of the progress of settlement negotiations? Answer: Yes.”

Upon this appeal, Northwestern urges that the evidence does not support the jury’s answers to each part of Question One of the special verdict. Our examination of the record persuades us that there is credible evidence to sustain the jury’s responses.

Did Northwestern fail to make a diligent effort to ascertain the facts ? The company may have been misled by its adjuster’s report that Mr. Walker had made “quite a good recovery.” The adjuster stated that he had .procured this information by way of “the grapevine;” the fact was that Mr. Walker had sustained several permanent disabilities. His right knee was permanently restricted in motion; his legs were of unequal length; his jaw was permanently injured so as to limit the extent that he could open his mouth. In addition, Mr. Walker was obliged to undergo surgery (after the date of the adjuster’s report), which involved two and one-half hours under general anesthesia and a two wéeks’ hospitalization. He was also advised that he might incur substantial future medical and dental care.

The record contains evidence from which the jury may have concluded that Northwestern was not diligent in that the company failed to obtain medical reports concerning the permanence of Mr. Walker’s jaw injury. Although Northwestern’s attorney expressly requested that the company make arrangements for its own examinations of Mr. Walker by an oral surgeon, there is no evidence that the company did so.

Northwestern’s representatives did not get in touch with Mr. Walker’s employer to determine his job status both before and after the accident. It is noted that in evaluating Mr. Walker’s damages the jury found that he had incurred a past wage loss of $5,748 and would sustain a future wage loss of $4,160. Both of these findings as to wage loss were affirmed upon the appeal to this court.

Upon this record the jury was warranted in concluding that there was a probability of an overage and, therefore, that Northwestern was duty bound to apprise its insured so that he could take his own protective steps if he chose to. It is obviously difficult to decide in advance when an overage may be “probable.” One court observed cynically, “It is always probable that something improbable will happen.” Warren v. Purtell (1879), 63 Ga. 428, 430. No simple guidelines are available; each case will depend on its own peculiar facts.

While Mr. Baker was aware that the claim of Mr. Walker was for a sum greater than the limits of his insurance policy, Northwestern did not advise Mr. Baker of his right to have independent counsel to protect him with regard to overage judgment. Mr. Baker consulted an attorney as to the claim for his own damages against Mr. Walker; on the other hand, there is no evidence that Mr. Baker either was informed by Northwestern or learned from independent sources that he was entitled to his own representation with reference to an overage notwithstanding the fact that he was obliged to surrender control of the defense to his insurer.

The record also contains credible evidence to support the jury’s finding that Northwestern did riot keep Mr. Baker adequately informed of compromise offers and of the progress of settlement negotiations. Several settlement opportunities occurred which were not transmitted to Mr. Baker. We recognize that an attorney does not have to take seriously all comments relating to settlement. Occasionally remarks are made between competing counsel which are of a bantering nature and are not meant to be taken seriously. We do not suggest that such casual conversations need be forwarded by an insurer to its policyholder or by an attorney to his client. However, in a case involving a probable overage, an insurance carrier must be circumspect to communicate all offers which are not patently jocular or frivolous.

In the instant case, it would appear that the only proposal that was transmitted to Mr. Baker was one which would have necessitated his paying approximately $6,000 toward the settlement. Northwestern concedes that it also received a written offer to settle Mr. Walker’s claim for $25,000 plus costs. The fact that this offer was withdrawn a few weeks later does not relieve Northwestern from the onus which attended its failure to have communicated the existence of the proposal to its insured.

On May 27, 1960, Northwestern received a letter from its attorney, Mr. Block, which contained the following statement: “Present demands for settlement are $25,000.00.”

In addition, the record discloses that there was a conference with the trial judge on June 24, 1960, which was attended by the various attorneys. At that time, Mr. Berg, the attorney for Mr. Walker, had the following discussion with Mr. Block, the attorney for Northwestern:

“Mr. Berg: Judge, I would like to ask Mr. Block, can this case be settled for $25,000 at this point ?
“Mr. Block: I can’t answer the question, because it is not pertinent to the issues involved at all. Therefore, I cannot answer the question on the record; I don’t think it has any place in the issues in this case.”

Another discussion as to settlement was described by Mr. Jackman, the attorney who was representing Mr. Walker on the counterclaim by Mr. Baker. Mr. Jackman said that he recollected the offer by Mr. Berg to settle for $25,000 and also gave the following testimony:

"A. ... I told Mr. Block that I believed that if he could raise $22,000.00 or $23,000.00 to settle the case that Mr. Berg would recommend to his client that he do so.
“A. On Saturday morning we were called back by the Judge to frame a verdict. Shortly before, as I recall, that conference began, Mr. Block asked Mr. ■ Berg if Mr. Berg would settle the case for $22,000.00 or $23,000.00. Mr. Berg then replied, as I recollect, that he would have to take it up with his client, but he first wanted to know if Mr. Block had authority to make a. firm offer before he would take it up with his client, and Mr. Berg said he would be around Janesville all weekend, and if Mr. Block would get in touch with his company and then get in touch with Mr. Berg when he had authority, Berg would let him know promptly.
“Q. Did you make further inquiry on Monday morning whether anything had developed from that? A. When we came back Monday morning I asked Mr. Berg what had transpired, and he said nothing.”

Since these several settlement prospects were not passed on to Mr. Baker, according to his testimony, the jury could properly conclude that under the circumstances Northwestern failed in a duty it owed to its insured.

The Finding of Bad Faith.

The jury determined that Northwestern’s refusal to settle within its policy limits was an act of bad faith toward Mr. Baker. In the absence of bad faith, a policyholder cannot surcharge an ■ overage against his insurance company merely because of negligence on the part of the latter in deciding to litigate rather than to settle. Baker v. Northwestern National Casualty Co. (1963), 22 Wis. (2d) 77, 81, 125 N. W. (2d) 370; Maroney v. Allstate Ins. Co. (1961), 12 Wis. (2d) 197, 201, 107 N. W. (2d) 261; Berk v. Milwaukee Automobile Ins. Co. (1944), 245 Wis. 597, 601, 15 N. W. (2d) 834. The extent and character of the negligence, however, are factors to be considered by the trier of fact in weighing the matter of bad faith. To hold the carrier liable for the excess judgment, the insured must show by clear, satisfactory, and convincing evidence that the carrier acted in bad faith. In Hilker v. Western Automobile Ins. Co. supra, the nature of the insurance carrier’s duty to exercise good faith is discussed.

The jury was entitled to conclude that the massive failure of Northwestern to carry out its duties considered above evidenced such a shocking disregard of its insured’s interests as to constitute “a suggestion of dishonesty” or “a species of fraud,” within the meaning of “bad faith.”

It is noted that Mr. Reinertsen, a vice-president of the company, testified as follows:

“Q. Did you feel as long as the demands were up to the policy limits Northwestern had nothing to lose by trying the case, because the most they could lose would be $25,000? A. That is correct.”

In our opinion, the record in the instant case demonstrates that the jury had before it clear, satisfactory, and convincing evidence upon which to base its determination of bad faith.

The Instruction Regarding Bad Faith.

The appellant complains that the trial court erred in defining bad faith to the jury. After having commenced its deliberations, the jury returned to the courtroom and asked for further instructions as to the meaning of bad faith. The court then instructed the jury as follows:

“Now, ‘bad faith’ is a word of broad application, and it is very difficult to define it distinctly. However, I can tell you ‘bad faith’ is the opposite of ‘good, faith’, and carries with it a suggestion of dishonesty. If a person does not act honestly and intelligently, then he acts in bad faith. Let me repeat those for you. Bad faith is the opposite of good faith, and carries with it a suggestion of dishonesty. If a person does not act honestly and intelligently, then he acts in bad faith. Does that help you ?”

Although the issue was not raised in his brief, counsel for Northwestern on oral argument urged that in stressing intelligence the court in effect suggested that the jury could make a finding of bad faith based on a mere error of judgment.

The trial court could well have derived this terminology from the Hilker Case, where, at page IS, this court used the words “honest and intelligent” in considering whether the insurance company acted in good faith. Intelligence may be compatible with either good faith or bad faith. We now believe that it would be preferable to omit reference to intelligent action in defining the test of bad faith since it may be interpreted to equate bad faith with all conduct that is erroneous or negligent. It is only when such conduct evinces a significant disregard of the interests of the insured that it may be found to be in bad faith.

We do not deem the reinstruction to have been prejudi-cially improper. Considering the instructions in their entirety, we conclude that the insurer was amply protected by the instructions that bad faith “carries with it a suggestion of dishonesty” and is “a species of fraud.”

Standard as to Proof.

Appellant contends that the trial court applied the wrong standard in ruling on motions after verdict. The court said that there was “credible evidence” to sustain the jury’s finding of bad faith. The appellant urges that proof of bad faith requires “clear, satisfactory, and convincing evidence” and not merely “credible evidence.”

We are satisfied that the trial court knew and applied the correct standard. In its instructions to the jury with reference to the question of the special verdict relating to bad faith, the trial court stated:

“The burden of proof for this question requires that you be satisfied or convinced to a reasonable certainty by evidence that is clear, satisfactory and convincing that this question should be answered ‘yes’.”

In using the term “credible evidence” when ruling on the motions after verdict, the trial court, we believe, was but abbreviating the more comprehensive statement of the required standard of proof. This court engaged in the same shortcut in Kuehn v. Kuehn (1960), 11 Wis. (2d) 15, 20, 104 N. W. (2d) 138.

The Cross Complaint for Consequential Damages.

The trial court declined to submit to the jury any question concerning Mr. Baker’s claimed damages in connection with his contemplated manufacture and sale of a hunting knife. It was Mr. Baker’s contention that the excess judgment against him damaged his credit rating and his financial reputation.

At the time of the judgment, Mr. Baker’s hunting-knife enterprise was in the planning stage. He had not yet begun to market his product. In our opinion, the trial court was correct in treating the claimed damages with reference to such new and unestablished business as speculative and remote. In American Steam Laundry Co. v. Riverside Printing Co. (1920), 171 Wis. 644, 650, 177 N. W. 852, the court stated:

“One of the elements for recovery of. loss of profits is that they must be capable of ascertainment with reasonable certainty.”

Attorney's Fees.

The judgment granted to Mr. Baker an allowance for attorney’s fees, in' the sum of $9,100.37. The trial court concluded that Mr. Baker was to be placed in the same position he would have occupied if he had not been defrauded, and therefore “he must be allowed attorney’s fees in the instant action.” We reach a contrary conclusion.

Sec. 271.04, Stats.; authorizes only $100 as an allowed cost for attorney’s fees in a case of this magnitude; that is the only sum which the court could assess as costs. We will next consider whether any additional attorney’s fees may be allowed as damages, as distinguished from costs.

As the learned trial court noted, one may recover those damages in a fraud action which are the natural and proximate result of the fraud. However, it does not follow that attorney’s fees incurred are entitled to be included in the award of damages. In Widemshek v. Fale (1962), 17 Wis. (2d) 337, 342, 117 N. W. (2d) 275, Mr. Chief Justice Brown stated:

“. . . the law does not generally recognize attorney’s fees as recoverable unless authorized by statute or contract, except when natural and proximate result of wrongful act by defendant has involved plaintiff in litigation with other parties. Paper Makers Importing Co. v. Milwaukee (1958), 165 Fed. Supp. 491.”

See also Hilgendorf v. Schuman (1939), 232 Wis. 625, 629, 288 N. W. 184, where the court said with regard to attorney’s fees:

“If plaintiff incurred such expenditures and costs in collateral litigation as a necessary and proximate result of the deceit, they are recoverable as part of the damages sustained by him.”

The distinction between attorney’s fees arising in the action against the wrongdoer and such fees arising in action with some other party (but caused by the wrongdoer) was observed in the two cited Wisconsin cases, and it is also recognized in a number of other jurisdictions. For example, in the Louisiana case of Commercial Credit Corp. v. Carrier (La. 1962), 139 So. (2d) 256, there was a sale of a used car for which the buyer signed a note; the note was fraudulently altered by the seller and transferred to a third party. The court held that the buyer was not entitled to recover the attorney’s fees which arose in his action against the seller, but he was allowed to recover from the seller those fees which the buyer incurred as a result of litigation with the third party.

Two other cases which have recognized the rule that one cannot recover as damages his attorney’s fees which arise in the lawsuit against the wrongdoer to establish the latter’s improper conduct are Beiser v. Evered (1957), 20 Conn. Supp. 365, 135 Atl. (2d) 741, and Reese v. Griffin (Tex. Civ. App. 1955), 281 S. W. (2d) 353.

If the person wronged has been involved in litigation with third parties because of the fraud, the defrauding party may later be held liable in an action against him for reasonable attorney’s fees incurred in such other litigation. See Thomason and Beggs v. Mosrie (1950), 134 W. Va. 634, 60 S. E. (2d) 699, and Skelly Oil Co. v. Universal Oil Products Co. (1949), 338 Ill. App. 79, 86 N. E. (2d) 875.

In McCormick, Damages (hornbook series), p. 246, sec. 66, the author asserts this principle as follows:

“For the expense incurred in the present litigation, we have found that our law generally gives the successful party no recompense beyond the taxable costs which ordinarily include only a portion of his expense. This is the case, however wrongful the suit or groundless the defense. On the other hand, where the present defendant has by his wrongful conduct, be it tort or breach of contract, caused the present plaintiff to defend or prosecute previous legal proceedings, the law reverses its restrictive attitude and allows the plaintiff to recover all the expense, including counsel fees, reasonably incurred by him in the prior litigation.”

It follows thát Mr. Baker may not recover attorney’s fees (beyond the statutory costs) which he incurred in prosecuting his overage suit against Northwestern. However, if not barred for some other reason, it may be possible for Mr. Baker to recover attorney’s fees incurred by him in his litigation with third persons if such dealings were occasioned by Northwestern’s wrongdoing. This possibility necessitates our examining the nature of the circumstances under which the attorney’s fees were created.

Some of the attorney’s fees resulted from the effort by Mr. Baker to resist garnishment actions brought by Mr. Walker in pursuance of the latter’s effort to collect his judgment. There were also attorney’s fees incurred in connection with the creation of a trust in favor of Mr. Baker’s mother; the latter trust constituted a divestment by Mr. Baker of certain of his assets. Additional fees related to advice concerning the wisdom of Mr. Baker’s going into bankruptcy. Attorney’s fees created by consultation and advice were held not recoverable in Paper Makers Importing Co. v. Milwaukee (1958), 165 Fed. Supp.491.

In our opinion, the garnishment, trust, and bankruptcy fees cannot properly be included as damages for the reason that Mr. Baker was obligated to pay the judgment against him. In a sense, such efforts at circumvention constitute a failure on his part to minimize his damages. O’Brien v. Isaacs (1962), 17 Wis. (2d) 261, 116 N. W. (2d) 246. The judgment in favor of Mr. Walker against Mr. Baker was valid and final, and there was a duty on the part of Mr. Baker to pay it. The attorney’s fees incurred in avoiding payment are not fairly to be denominated “a natural and proximate result” of Northwestern’s wrongful conduct.

The fees which were paid by Mr. Baker in connection with his development of the hunting-knife enterprise are not chargeable for the reason that the claims attendant to such activity were too speculative to qualify as damages, as has been noted earlier in this opinion.

Conclusion.

The judgment must be modified to exclude attorney’s fees except for $100 allowable as costs under sec. 271.04, Stats. Costs upon this appeal are to be awarded in favor of the appellant. The motion to review should be denied.

By the Court. — judgment modified as directed in the opinion and, as modified, affirmed.


source: Caselaw Access Project

author: Wilkie, J.

license: Public Domain

text:
    Rachlin and others, Respondents, v. Drath and wife, Appellants.

      January 5 —
    February 2, 1965.

      For the appellants there were briefs by Orth, Riedl & Orth, attorneys, and Harold M. Frauendorfer of counsel, all of Milwaukee, and oral argument by Charles A. Riedl.

    For the respondents there was a brief by Ermenc & Kamps of Milwaukee, and oral argument by John Q. Kamps.

   Wilkie, J.

Three issues are presented on this appeal:

(1) Is the order of June 1, 1964, appealable ?
(2) Does this appeal include a review of the judgment of March 11, 1963?
(3) Is the finding by the trial court in its June order (based on its decision of January 13, 1964) that the kennels are “still operated as a nuisance” against the great weight and clear preponderance of the evidence ?

(1) Is the order of June 1, 1964, appealable? By its judgment of March 11, 1963, the trial court decreed that a private nuisance (by reason of noise) existed and ordered it to be abated. That judgment ordered the taking of testimony in six months to ascertain whether the nuisance had been abated. The June 1, 1964, order found that the nuisance had not been abated and ordered the sheriff to abate the nuisance by removing as may be necessary any and all dogs boarded at the kennels. The June order was appealable as being an order within the provisions of sec. 274.33 (2), Stats., which provides as follows:

“A final order affecting a substantial right made in special proceedings, without regard to whether the proceedings involve new or old rights, remedies or proceedings and whether or not the right to appeal is given by the statute which created the right, remedy or proceedings, or made upon a summary application in an action after judgment.”

(2) Does this appeal include a review of the judgment of March 11,1963? Appellants, on their appeal from the June 1, 1964, order, seek a review of the trial court’s finding of the existence of a nuisance as entered in its judgment of March 11, 1963. There are three reasons for denying any such review.

First, the March 11th judgment was final. In granting the requested relief — i.e., that the nuisance be abated — the judgment fully determined the rights of the parties. No unresolved questions remained in regard to whether or not there was a nuisance. Although the judgment required the taking of testimony six months later on the limited issue of whether or not the nuisance had been abated, this reservation in no way affected the finality of the judgment. Inasmuch as the judgment was entered March 11, 1963, and the notice of appeal was not served until July 13, 1964, the time for appeal of that judgment has clearly lapsed, and appellants are not entitled to a review of the earlier judgment on their appeal from the June order.

Second, even assuming as appellants contend that the March 11th judgment was interlocutory, appeal must be taken from this judgment within the period specified by sec. 274.01, Stats. and this was not done.

Third, contrary to appellants’' contention, respondents have not waived any objection to the jurisdiction of this court by participating in a review of the merits of the case. Respondents have not joined in a review of the merits without objection. Not only did they move to dismiss the appeal, but reasserted their grounds for dismissal in the present appeal in addition to presenting arguments on the merits. The most respondents did without objection was to participate in the- settling of the bill of exceptions, and this does not constitute a waiver of jurisdiction.

For the reasons stated, our review on this appeal is confined to, the June 1, 1964, order and we may not review the merits of the trial court’s determination as embodied in the March 11, 1963, judgment that there was a nuisance.

(3) Is the finding hy the trial court in its June order (based on its decision of January 13, 1964) that the kennels are “still operated as a nuisance” against the great weight and clear preponderance of the evidencef We have reviewed the record made at the hearing' in September, 1963, on whether or not the nuisance was abated as of then and find that the trial court’s firiding that the kennels are “still operated as a nuisance” is not against the great weight and clear preponderance of the evidence. Although the defendants testified that “legally, morally and ethically we have done everything we can to control them [the dogs]” there was testimony that the excessive noise persisted. Several of the plaintiffs and another witness testified to hearing regular howling, barking, growling, and crying by the dogs during many days and almost daily from Memorial Day to Labor Day. There was testimony that this noise was nerve-wracking, embarrassing, limited entertainment, and that the same disturbed the plaintiffs in their sleep and caused them “actual, material, physical discomfort.” Although there were witnesses who testified that the noises from the kennels had not annoyed them, their testimony does not constitute the great weight or clear preponderance of the evidence.

By the Court. — Order affirmed.

       Sec. 270.53 (1), Stats. “A judgment is the final determination of the rights of the parties in the action.”

       Sec. 274.01 (1), Stats. “Except as otherwise provided the time within which a writ of error may be issued or an appeal taken to obtain a review by the supreme court of any judgment or order in any civil action or special proceeding in a court of record is limited to 3 months from service of notice of entry of such judgment or order or, if no notice is served, to 6 months from date of entry.

        Kickapoo Development Corp. v. Kickapoo Orchard Co. (1939), 231 Wis. 458, 285 N. W. 354; Richter v. Standard Mfg. Co. (1937), 224 Wis. 121, 271 N. W. 14, 271 N. W. 914

       Relying on Estate of Burns (1964), 23 Wis. (2d) 175, 127 N. W. (2d) 239; Baumgarten v. Jones (1963), 21 Wis. (2d) 467, 124 N. W. (2d) 609.

       Denied without prejudice September 22, 1964.

         Kitchenmaster v. Mutual Automobile Ins. Co. (1946), 248 Wis. 335, 21 N. W. (2d) 727.

         Schneider v. Fromm Laboratories, Inc. (1952), 262 Wis. 21, 26, 53 N. W. (2d) 737.


author: Heffernan, J.

text:
    Giffen, Appellant, v. Tigerton Lumber Company, Respondent.

      January 5 —
    February 2, 1965.

      For the appellant there were briefs and oral argument by Wilbur A. Giffen of Chicago, Illinois, pro se.
    For the respondent there was a brief and oral argument by O. Strossenreutheroi Shawano.
   Heffernan, J.

A. Reasonable A ttorney Fees.

Because this is an appeal from a trial court’s finding of reasonable attorney fees, we are not bound by the great-weight-and-clear-preponderance-of-the-evidence test. Touchett v. E Z Paintr Corp. (1961), 14 Wis. (2d) 479, 111 N. W. (2d) 419. A lower court conclusion of this type is subject to our determination of what is reasonable because we have firsthand knowledge of the value of legal services.

The company, relying on Conway v. Sauk County (1963), 19 Wis. (2d) 599, 605, 120 N. W. (2d) 671, contends that the proper test is that the supreme court cannot reverse the trial court unless its allowance of fees was clearly unreasonable. But there the counsel was appointed by the trial court to represent an indigent defendant and the trial took place before the same tribunal that made the subsequent review of legal fees. The “clearly unreasonable” test does not bind this court on the review of an independent finding of fact as was done here, since the prior proceedings were not before the trial judge who later determined the fees which are questioned here.

The trial court found that twenty-one hours was adequate for study and research. Giffen contends that this is too low because there are few decisions on the “Lifo” concept of tax law that govern the adjudication in the field. Because of this, he argues, he was called upon to employ his imagination and resourcefulness in search for persuasive arguments and material. For example, on the problem of whether the average cost or specie cost had to be used in determining the base cost of the remaining inventory, Giffen testified that he checked all of the regulations back to 1917 to show that average cost was used. He also testified that he had to search “Lifo” decisions from other industries to prove that the average cost was used because there were no decisions in the lumber field.

We concur with the trial judge. Giffen was a tax specialist. His hourly charge of $25 was agreed upon by stipulation in the trial court. Even though he cannot be expected to be conversant with all aspects of the complicated field of federal tax law, he should have accumulated enough background law to be able to complete his research for this problem and study in twenty-one hours. By arguing that very few cases were decided in the specific area of “Lifo” inventories, Giffen proves too much. His past experience and general tax law knowledge should have made him well-qualified to argue effectively from these cases without a review of general tax law. A certified public accountant and lawyer, Mr. Nelson, testified that two to three days would be sufficient to research and study all of the cases.

We have considered the factors listed in Touchett, supra, at page 488, and conclude that twenty-one hours represents a reasonable hourly figure.

Giffen further contends that the finding of 16% hours was not adequate to prepare for conference. Giffen appeared at three conferences. The one held on January 10, 1958, was of no significance because the government’s technical man was not present. On January 22, 1958, the parties reached agreement after a full day’s session. Giffen also was present on March 26, 1958, the third meeting, to check settlement figures and arrange for final disposition of the matter. Giffen appeared in court on one occasion to move for a continuance, which was unopposed and granted. The hourly figure of 16j4 hours represents the time which would be reasonably adequate to prepare for the conferences.

In so finding, we have not overlooked the substantial achievement of Giffen. After all, nothing was accomplished until Giffen entered the negotiations. Furthermore, the tax deficiency was greatly reduced. The accountants who testified in the court below are, however, in serious dispute of the reality of a savings from the reduction in the deficiency. The saving would appear to be lost if the company allows the inventory to dwindle or if the company is liquidated. Since neither of these is seriously contemplated, the company has, for all practical purposes, accomplished the savings alleged by Giffen. In any event, the company has the use of the money until the day of the tax reckoning. But the amount saved is only one of the factors that should be considered. Giffen may well have spent the number of hours that he claims here, but he has apparently labored inordinately on a matter that could well have been disposed of, by an expert, in less time.

B. Interest.

The trial court, after determining the reasonable value of legal services, held that the company should pay Giffen interest on the amount thirty days after the date of demand. The court found that the claim for legal services was capable of liquidation or ascertainment and that the company could have done several things (including a reasonable tender) to stop the interest but elected not to do so.

Interest is due on demand if the amount as claimed is fixed or determined or readily determinable. California Wine Asso. v. Wisconsin Liquor Co. (1963), 20 Wis. (2d) 110, 121 N. W. (2d) 308.

The decision of Laycock v. Parker (1899), 103 Wis. 161, 186, 79 N. W. 327, makes an extensive analysis of the problem of allowing interest on claims which are readily determinable, arriving at the following conclusion:

“The true principle, which is based on the sense of justice in the business community and on our statute, is that he who retains money which he ought to pay to another should be charged interest upon it. The difficulty is that it cannot well be said one ought to pay money, unless he can ascertain how much he ought to pay with reasonable exactness. Mere difference of opinion as to amount is, however, no more a reason to excuse him from interest than difference of opinion whether he legally ought to pay at all, which has never been held an excuse. . . . So, if there be a reasonably certain standard of measurement by the correct application of which one can ascertain the amount he owes, he should equally be held responsible for making such application correctly and liable for interest if he does not.”

The company admitted that it owed Giffen something, and it should have tendered an amount that it deemed reasonable. Such action would have stopped the running of interest to the extent of the tender. However, if the tender were restricted in the sense that it could only be accepted as a payment in full, it would not preclude an award of interest on the entire sum found to be owing, assuming such sum was greater than the tender. We, therefore, affirm the action of the trial court in granting Giffen the interest of the sum it found to be owing.

By the Court. — Judgment affirmed. Costs are not to be taxed to either party.

       Simple accounting was set at thirty-five hours ($10 per hour) and complex accounting at twenty-one hours ($25 per hour).


author: Gordon, J. Hallows, J.

text:
    Estate of Southey: Baker, Appellant, v. Marine National Exchange Bank of Milwaukee, Executor, Respondent.

      January 5 —
    February 2, 1965.

      For the appellant there were briefs by Lueck & Skup-niewitz of Beaver Dam, and oral argument by A. W. Lueck.

    For the respondent there was a brief by John & Meyer of Milwaukee, and oral argument by Walter A. John.

   Gordon, J.

Miss Southey’s will was executed in 1958, six years after Mrs. Baker had commenced working for her. Miss Southey died in October, 1962, at the age of seventy-seven. Mrs. Baker’s age roughly corresponded with that of Miss Southey.

Miss Southey’s will included a- bequest to Mrs. Baker provided that at the time of the testatrix’s death Mrs. Baker was serving as Miss Southey’s housekeeper and also that the relationship of employer and employee existed between them. Our burden on this appeal is to determine the intention of Miss Southey in imposing the two said conditions and whether the conditions were fulfilled by the claimant.

The facts surrounding the relationship of the two ladies are not in dispute. Miss Southey maintained an apartment wherein Mrs. Baker performed a variety of duties as housekeeper and companion for the years between 1952 and 1960. During that time, Mrs. Baker was paid a weekly salary by Miss Southey and actually lived in the apartment with her.

On January 31, 1960, Miss Southey sustained a serious stroke and was taken to Columbia Hospital. Her health was so seriously impaired by the stroke that guardians were appointed by the court in February, 1960. In March, 1960, Miss Southey was removed from Columbia Hospital to a nursing home, where she remained until her death approximately two and one-half years later. She did not regain a status of competence between February, 1960, and the date of her death.

Mrs. Baker left the apartment where she had lived and worked since 1952 when, in April, 1960, the guardians determined to give up such apartment and have Miss Southey’s furniture stored. However, Mrs. Baker continued to serve Miss Southey as a personal attendant and was paid for such work by the guardians.

The record amply establishes that Mrs. Baker was devotedly attentive to Miss Southey during the two and one-half years of the latter’s incapacity. Mrs. Baker spent six days a week in attendance to Miss Southey. Among the many duties which Mrs. Baker performed were the following : She read mail and the newspaper to Miss Southey; she fed her; she prepared foods which Miss Southey particularly enjoyed; she took Miss Southey’s soiled clothes to her own apartment, washed them and returned them; she took Miss Southey for walks in a wheelchair.

The equities in favor of Mrs. Baker are strong. However, the respondent contends that a proper interpretation of the will must foreclose Mrs. Baker’s qualification as a legatee. Under this reasoning, it is pointed out that Mrs. Baker could not be considered as Miss Southey’s housekeeper at the time of her death because there was simply no house to keep; the apartment had been closed almost two and one-half years earlier. In a similarly literal vein, it is arguable that Mrs. Baker was not an employee of Miss Southey at the time of Miss Southey’s death because at such time Miss Southey had been under guardianship for several years; under this view, Mrs. Baker was an employee of. the guardians and not of the testratrix.

“But the character of every act depends upon the circumstances in which it is done.” Holmes, J., in Schenck v. United States (1919), 249 U., S. 47, 52, 39 Sup. Ct. 247, 63 L. Ed. 470. Miss Southey’s will was drawn in the light of the circumstances which existed in 1958. In our opinion, the language of the will requiring an employer-employee relationship and also requiring the performance of housekeeping duties on the part of Mrs. Baker must be interpreted in light of the situation which prevailed at the time when the will was executed.

Until Miss Southey’s death, Mrs. Baker continued to serve her personally in the same basic manner in which she had served at the time that the will was signed. While technically hired by guardians, Mrs. Baker in effect worked for Miss Southey. Since the apartment had been vacated, Mrs. Baker did not qualify as a housekeeper in a strict sense, but she did care for Miss Southey’s needs and wants in a most comprehensive way.

The court’s goal is to ascertain the intention of the testatrix as set forth in her will. Estate of Buser (1959), 8 Wis. (2d) 40, 98 N. W. (2d) 425. In determining the meaning of the words used in a will, we have stated that the most important rule is the general intent of the testator. Estate of Treat (1948), 253 Wis. 527, 529, 34 N. W. (2d) 685.

If the conditions imposed in this will are to be literally interpreted in relation to the existing facts found at the time of death, then, in such event, the bequest to Mrs. Baker fails. However, in the words of the court in Will of Boeck (1915), 160 Wis. 577, 581, 152 N. W. 155:

“ . . intention must be spelled out from the words of the will itself, read in the light of the circumstances surrounding the testator when he made it! ”

This court stated in Estate of Breese (1959), 7 Wis. (2d) 422, 426, 96 N. W. (2d) 712:

“The construction of a will by a court is the ascertainment of that content or the meaning of the words, i.e.s the intention of the testator. To'do this the court attempts to place .itself in the position of the testator when he made his will and to consider the use of the words in relation to the surrounding circumstances.” (Emphasis added.)

We conclude that the testatrix intended Mrs. Baker to qualify as a beneficiary if she continued to serve her in the same comprehensive fashion at the time of death as existed at the time .the will was drawn. Under this standard, Mrs. Baker met the conditions imposed and is entitled to receive her share under the will.

By the Court. — Judgment reversed.

Hallows, J.

(dissenting). I think the majority in its interpretation of the language of the will has applied the cy pres doctrine to a noncharitable bequest.


author: Fairchild, J.

text:
    Lake Como Beach Property Owners Association, Appellant, v. Giovannoni and wife, Respondents.

      January 5 —
    February 2, 1965.

      For the appellant there was a brief and oral argument by John Morrissy of Lake Geneva.
    For the respondents there was a brief and oral argument by William H. Frey tag of Elkhorn.
    A brief amicus curiae was filed by Irving W. Zirhel, attorney, and Porter, Quale & Zirhel of counsel, all of Milwaukee, for the Federation of Wisconsin Lake Property Owners Associations, Inc.
   Fairchild, J.

Corporations like plaintiff are given certain powers by sec. 289.70, Stats. Sub. (2) provides:

“Upon the adoption and approval of the annual budget by a majority of the membership . . . the governing board of such corporation shall be empowered to levy an assessment not in excess of 8 mills on each dollar of assessed valuation to be known as a maintenance assessment against all of the lots, the ownership of which entitles the owner thereof to the use and enjoyment of the properties controlled by such corporation. . . . The assessments so levied shall be equal in amount against all of such lots and shall be levied at the same time once in each year, upon all lots. The governing board shall apportion the cost of operating water or sewer plants and facilities thereof and separate such costs from the other expenses of the budget and shall include the expenses of water and sewer plant maintenance only in the levy against those lots which may be improved with a dwelling house on the date when the levy is ordered, and no portion of such cost shall be assessed against the vacant lots or the owners thereof.”

The statute under consideration provides, in part: “The assessments so levied shall be equal in amount against all of such lots. . . .” It goes oh to provide that expenses of water and sewer maintenance shall be included only in the levy against lots on which there is a house and not in the levy against vacant lots. An appropriate dictionary definition of “amount” is “the total number or quantity.” It seems most natural in this context to relate the word “amount” to “assessments” on the individual lots, so that the amount of the assessment on any lot shall be equal to the amount of the assessment on every other lot, even though the lots are of unequal value, except for the difference required where water and sewer maintenance is involved. This is defendants’ position, and the conclusion of the circuit court.

Plaintiff points to the portion of the statute which fixes the maximum permissible assessment at a percentage of assessed valuation and suggests that it would be more sensible to interpret the requirement that assessments be “equal in amount” as if it read “at an equal rate,” the maximum permissible rate being eight mills on each dollar of assessed valuation.

The legislative history supports the position of defendants.

Sec. 289.70, Stats., was enacted by ch. 447, Laws of 1935. It contained the same provision as now, requiring the assessments to be equal in amount. It did not contain any limitation upon the assessment, nor any reference to a mill rate or percentage of assessed valuation.

The bill which became ch. 447 originally provided that, “The assessment so levied shall be equal in amount against all lots of the same size. ...” but the bill was amended to read as it now does.

There was no suggestion in the original statute that the amount of the assessment on the individual lots could vary according to the assessed valuation, and the initial proposal that the amount could vary according to the size of the lot was eliminated. It is very clear that it was intended that the total assessment for the particular year should be divided equally among all the lots.

In 1937, the legislature amended the statute so as to limit the assessment made against all the lots by the governing board. The words “not in excess of five mills on each dollar of assessed valuation” were inserted. The change to eight mills was made in ch. 99, Laws of 1957. A notation in the files of the legislative reference library explains the reason for the 1937 amendment as follows:

“A measure suggested and sponsored by a group of property owners on lakes in Rock County to limit assessments by improvement corporations, some of which are actually controlled by residents of other states.”

If it had been intended that thereafter assessments be levied on individual lots at a percentage of the assessed valuation of each, not to exceed five mills on each dollar, language plainly so providing could readily have been used. We consider that after the 1937 amendment, the total assessment for the particular year was to continue to be divided equally among all the lots, but that the total assessment must not exceed .5 percent (.8 percent since 1957) of the total assessed valuation of all the lots.

We are aware of the possible construction that no assessment on a particular lot may exceed .8 percent of the assessed valuation of that lot. We note, however, that the limitation appears in the statute where the- term “assessment . . . against all the lots” is in the singular, and we conclude that it is most reasonable to apply the mill-rate limitation to the aggregate assessment levied against all the lots. This seems to us to be true,, even though in situations where the lots vary considerably in value, an assessment on an individual lot may markedly exceed .8 percent of the assessed valuation of that lot.

In 1945, this court decided that sec. 289.70, Stats., was constitutional. Although the formula used in levying the assessment in that case was not challenged, it does appear from the complaint printed in the appendix to the appellant’s brief that the corporation there involved followed the interpretation we now adopt. It was alleged that the board “levied a maintenance assessment against all of the lots, . . . which assessment did not exceed five mills on each dollar of assessed valuation of all of such lots, and which assessment was equal in amount against each of said lots and amounted to the sum of $4.18 for each such lot.” We are unable to determine the formula used in the only other case which dealt with this statute.

We note an assertion in the brief amicus that the plaintiff and other associations have for many years made assessments under sec. 289.70, Stats., based, on a mill rate per dollar of assessed valuation of each lot. Even assuming an ambiguity, we have no way of ascertaining that this statute has, since 1937, been so consistently interpreted in this way by those who are affected by it that such interpretation should be followed.

By the Court. — Order and judgment affirmed.

       Webster’s New International Dictionary (3d ed., unabridged).

       Bill No. 1042 A., 1935; Amendment 1, A.

       Ch. 351, Laws of 1937.

        Hall’s Point Property Owners Asso. v. Zinda (1945), 247 Wis. 280, 19 N. W. (2d) 251.

        Hunt v. Oakwood Hills Civic Asso. (1963), 19 Wis. (2d) 113, 119 N. W. (2d) 466.


author: Hallows, J.

text:
    State ex rel. Dela Hunt, Respondent, v. Ward and others, Appellants.

      January 5 —
    February 2, 1965.

      For the appellants there was a brief by Robert P. Russell, corporation counsel of Milwaukee county, and James J. O’Donnell, first assistant corporation counsel, and oral argument by Mr. O’Donnell.

    For the respondent there was a brief by Brennan & Brennan of Milwaukee, and oral argument by Joseph K. Brennan and Robert G. Dela Hunt of Milwaukee.
   Hallows, J.

The civil service commission of Milwaukee county was created pursuant to the provisions of ch. 259, Laws of 1917. The original secs. 772-1 to 772-17 as amended are now secs. 63.01 to 63.16, inclusive, Stats. The predecessor sections of 63.01 and 63.02 directed Milwaukee county to establish a civil service commission as part of the county civil-service law and such commission to adopt rules and regulations to carry out the provisions of the act as in the commission’s judgment would secure the best service for the county. Sec. 63.04 and its predecessor section prohibited the appointment, promotion, demotion, transfer, or removal of any person in the classified service except in accordance with the provisions of secs. 63.01 to 63.16, inclusive. Since 1917 to 1963 sec. 63.10 provided that whenever an appointing officer believed an employee in the classified service in his department was incompetent to perform his duties or merited suspension, demotion, or dismissal, the officer was required to report in writing to the commission the grounds of his complaint. Provision was made for a hearing before the commission on the complaint and for appropriate action by it.

Shortly after the enactment of the civil-service law, the Milwaukee county civil service commission was created and adopted rules which were published and became effective on January 1, 1918. Rule IV, sec. 4, of these original rules provided that original appointments should be on a probationary basis for a period of three months and if any probationer upon a fair test was found incompetent or unqualified, the appointing officer was required to certify in writing such finding giving the reasons to the commission and requesting the separation of such probationer; and upon approval by the commission, the probationer would be discharged. Over the years this rule has been amended until in its present form it provides, in part, “All persons certified from original or promotional eligible lists, and all persons certified from a layoff list, shall be on probation for a period of six months, except .... If any probationer after a fair trial shall be found incompetent or unqualified, in the opinion of the appointing authority, to perform the duties of the position to which he has been certified, the appointing authority may separate the probationer prior to the completion of the probationary period and shall submit to the commission a written statement of his reasons for such separation, together with such other service-rating reports as the commission may require. The retention of a probationer in the service after the expiration of the probationary period shall be equivalent to his final and absolute appointment.”

The relator contends this rule is inconsistent and in conflict with secs. 63.04 and 63.10, Stats., in that the statutes do not authorize the commission to adopt a rule providing for the summary dismissal of county employees whether during a six-month probationary period or otherwise. It is not contended the commission could not adopt rules relating to a probationary period but only that such rules cannot provide for a discharge or dismissal without a hearing as provided in sec. 63.10. We believe State ex rel. Irany v. Milwaukee County Civil Service Comm. (1962), 18 Wis. (2d) 132, 118 N. W. (2d) 137, relied on by the relator is not controlling. In Irany the rule relating to the suspension of a regular employee without a hearing was in direct conflict with sec. 63.10, which in our view deals with the safeguards of permanent status of regular employment but does not purport to regulate the probationary period which necessarily precedes a permanent status in civil service.

So far as original employment is concerned, a probationary period is the hind part of the . examining and hiring process; almost as much can be said for the probationary period applied to promotions. The probationary period is primarily for the purpose of affording the hiring authority an opportunity to test the. ability of an employee on the job. We do not consider it essential to the probationary concept that a separation from a position, called a “discharge” by the relator, during the period should only be made after a hearing. Most civil-service laws provide for the separation of the probationer from service without any hearing. While the relator speaks of a discharge of a probationer, it is more correct to refer to a “separation” from the position, as the rule does. A separation is distinguishable from discharge in that upon a separation the probationer may be restored to an appropriate eligible list by the commission and again certified to other departments, while a discharge or dismissal as used in sec. 63.10, Stats., contemplates a final termination of a regular employee’s permanent status. Under the rule, the director has the power to separate a probationer from a position but not the power to discharge. We think the vital distinction between the status in a probationary period and in permanent employment is the very fact that during a probationary period one may be separated without a hearing. If a hiring authority under the commission’s rule separates a probationer from a position arbitrarily without affording him a fair trial on the job, the probationer would have recourse to the courts on the issue of arbitrariness. However, after a fair trial the reasons for the separation of a probationer should not be subject to review except as may be provided by the rule. We consider Rule IV, sec. 4, to be a reasonable rule in its application to the relator and “adapted to secure the best service-for the county” as required by sec. 63.02, Stats.

Even if it were debatable that the rule were in conflict with a construction of sec. 63.10, Stats., that the legislature intended the section to apply to probationary periods, the fact remains the rule has been in existence substantially in its present form since 1917 shortly after the passage of the Civil Service Act for Milwaukee county. Apparently those required to carry out the act in Milwaukee county understood it provided extensive rule-making powers since the act covered the field of civil service in only a few broad-sweeping paragraphs. This rule providing for summary discharge during a probationary period has not been challenged in this court in the forty-odd years of its existence. This long-unchallenged interpretation that neither secs. 63.04 nor 63.10 prevented such a rule is entitled to serious consideration. Trczyniewski v. Milwaukee (1961), 15 Wis. (2d) 236, 112 N. W. (2d) 725. And, we do not consider such interpretation to be “plainly erroneous or inconsistent with the statutes.” State ex rel. Durando v. State Athletic Comm. (1956), 272 Wis. 191, 75 N. W. (2d) 451.

But more important we think the interpretation of these sections giving rise to the rule and its validity was recognized and blanketed in the statute by the legislature in 1941 when it passed two amendments to the act which are now secs. 63.06 and 63.07, Stats. Sec. 63.06 was created by ch. 102, Laws of 1941, as sec. 16.351 and provided that any person in the classified service of any county who become an active member of the military or naval forces of the United States should be granted a leave of absence and, “Service toward seniority or salary advancement shall be deemed not to be interrupted by such military service, provided that persons occupying a probationary status upon commencing such military leave shall revert to such status upon reinstatement.” Likewise, sec. 63.07 created by ch. 232, Laws of 1941, as sec. 16.352 recognized probationary service and provided that the period of service of any temporary appointment should not be counted “as a part of the probationary service required after appointment to a permanent position.” Neither of these sections has complete meaning unless the probationary provisions of the Milwaukee county commission rules are recognized as valid.

The cases cited from other states are not very helpful in construing our statutes because of the differences in the statutory language. However, People ex rel. Betts v. Maywood (1938), 298 Ill. App. 160, 18 N. E. (2d) 459, is on all fours. It was there held that the Illinois statute similar to our sec. 63.10 requiring a hearing before discharge of an employee under civil service did not prevent the board of fire and police commissioners from establishing a rule providing for the establishment of a probationary period and for a discharge without hearing during such period.

By the Court. — Order reversed, with directions to quash the writ.


text:
    Ehrlich and others, d/b/a Greater North Bay Land Company, Respondents, v. City of Racine, Appellant.

      January 6 —
    February 2, 1965.

      For the appellant there were briefs and oral argument by Jack Harvey, city attorney.
    For the respondents there was a brief by Brown & Black of Racine, and oral argument by Harley Brown.

   GORDON, J.

The contract, which was entered into voluntarily by the city of Racine, is now challenged by that municipality as being violative of sec. 1, art. VIII of the Wisconsin constitution, which provides that: “The rule of taxation shall be uniform . . .” The objective of this clause has been interpreted to be “to protect the citizen against unequal, and consequently unjust taxation.” Weeks v. Milwaukee (1860), 10 Wis. 186(*242), 201 (*257).

The primary issue before us is whether the technique used in paragraph B, which is quoted above, offends the uniformity requirement of the state constitution.

When the legislature attempted to establish a reduced tax rate for agricultural lands, this court held the effort void. Knowlton v. Supervisors of Rock County (1859), 9 Wis. 378 (*410). The legislature can, with uniformity, exempt property from taxes, but it cannot partially exempt particular property. “There cannot be any medium ground between absolute exemption and uniform taxation,” said the court in Knowlton v. Supervisors of Rock County, supra, at page 392 (*424). If the legislature is constrained by this constitutional restriction, then a fortiori a municipality is also bound by it.

In examining the contract, and particularly paragraph B, we conclude that it provides for a partial exemption from taxes of the plaintiffs’ land. To be sure, such tax preference is accomplished by indirection; it requires the plaintiffs to pay the same assessment that other landowners pay, but under the provisions of this contract, the plaintiffs are subsequently entitled to what amounts to a rebate. We are unable to give judicial absolution to a two-stage tax differential which would be a constitutional transgression if done in one stage. In Earles v. Wells (1896), 94 Wis. 285, 299, 68 N. W. 964, this court said:

“The method by which the attempt was made may be regarded as ingenious, but it should be remembered, as indicated by one of the cases cited, that the city could not do by indirection what it could not do directly.”

In finding the contract valid, the trial court relied primarily upon Monroe Water Works Co. v. Monroe (1901), 110 Wis. 11, 85 N. W. 685, and the plaintiffs urge that we should affirm on the basis of that case. In the Monroe Case, at page 18, the court stated:

“The rule is equally well established that it is competent for a city and a company to agree that, as the price of services to be rendered, the city will pay a sum equal to the amount of municipal taxes to be levied. Ludington W. S. Co. v. Ludington, 119 Mich. 480; Cartersville I. G. & W. Co. v. Cartersville, 89 Ga. 683; Grant v. Davenport, 36 Iowa 397. Of course, it must appear that the sum so stipulated to be paid is a fair and just allowance to compensate for the actual value of the services to be rendered, and that the stipulation is bona fide, and not in the nature of an evasion of the law against exemption from taxes. The stipulation in this case is not subject to this objection. The water company agrees to furnish water for flushing gutters and sewers; also for school and public buildings, drinking and display fountains, and for sprinkling streets in the business portion of the city. In consideration thereof, the city is to pay annually a sum equal to certain taxes to be levied. There is nothing in this arrangement that we can perceive suggesting any exemption from assessment or taxation. On the contrary, it expressly contemplates the levy of a tax, and provides merely that, in addition to hydrant rents, the city shall pay a varying sum for the other services mentioned. If the agreement is sufficiently definite to be enforced, no reason is apparent why the city should not live up to its agreement.”

By its own terms, the Monroe Case applied to a situation in which services were to be rendered and, thus, is distinguishable from the facts in the instant case. In the case at bar, the consideration to the city of Racine was twofold: The land in question was annexed to the city, and the city received an easement for a storm sewer. Neither part of this consideration is comparable to the continuing services in Monroe.

The reasoning of the Virginia court in Richmond v. Virginia Railway & Power Co. (1919), 124 Va. 529, 542, 98 S. E. 691, is applicable, even to the extent of having a special category when the consideration consists of services to the city:

“No authority has been cited before us extending the doctrine of the cases next above discussed to the point of holding that a municipality may, for any other valuable consideration than services to it such as aforesaid, contract away its taxing power and that such contract will be held not to be a tax exemption. And on principle, it will be at once perceived that such a broad power of contract would annul all constitutional provisions against exemption of property from taxation. It is not a question of the presence or absence of a valuable consideration to support tax exemptions against which such constitutional provisions are directed. There has seldom, if ever, arisen a case of tax exemption where such a consideration was not supposed by the taxing authority to exist at the time, and a supposedly sufficient consideration. But the evil of allowing such a power to exist, even in the legislature, is so manifest, that the rules of construction applicable to every alleged tax relinquishment, above adverted to, and the constitutional inhibitions which are now in force in Virginia against the exercise of such a power, have been adopted, and have their foundation deep-seated in principles which are immutable under our form of government.”

In our opinion, the Wisconsin constitutional requirement is clear, and the contract in question patently contravenes it. Mr. Justice Holmes said, “But whatever the consequences we must accept the plain meaning of plain words.” United States v. Brown (1907), 206 U. S. 240, 244, 27 Sup. Ct. 620, 51 L. Ed. 1046. We conclude that the plaintiffs’ reliance upon the Monroe Case is unavailing. We are mindful that a number of other states have expressed rules comparable to that of Monroe. See Portland Water Co. v. Portland (1922), 97 Conn. 628, 118 Atl. 84; Water Co. v. Waterville (1900), 93 Me. 586, 45 Atl. 830, 49 L. R. A. 294; Water Supply Co. v. Ludington (1899), 119 Mich. 480, 78 N. W. 558; Cartersville Improvement Gas & Water Co. v. Mayor (1892), 89 Ga. 683, 16 S. E. 25; Grant v. Davenport (1873), 36 Iowa 396.

The Minnesota supreme court has expressed itself in a vein contrary to the Monroe holding. Its ruling in Little Falls Electric & Water Co. v. Little Falls (1898), 74 Minn. 197, 77 N. W. 40, was cited in the Monroe opinion. The following is the view of the Minnesota court (p. 199) which supports us in our determination not to expand the doctrine of the Monroe Case:

“This substitute for taxes has no relation to the value of the property in money, and would evidently result in want of uniformity and equality of taxation.
“The city had no authority to exempt this property from taxation or to commute the tax by accepting services in lieu of it. If a municipality can bind itself by any such contract, it would result in bartering away its taxing power. We may go further, and say that under the constitution the legislature itself could not grant a city authority to make any such contract. If a city could make such contracts, it is easy to see how, under the guise of contracts for the performance of some public service, the city council could relieve much private property from a large part of its just share of the burden of taxation for city purposes.”

But cf. Phoenix v. Landrum & Mills Realty Co. (1951), 71 Ariz. 382, 227 Pac. (2d) 1011.

In view of our conclusion that the contract was void under the constitution, we agree with the city’s contention that the city is not barred from challenging the contract by reason of estoppel or by reason of sec. 66.13, Stats. The latter section provides that actions to test the validity of municipal contracts must be commenced within sixty days after being signed. Kiel v. Frank Shoe Mfg. Co. (1942), 240 Wis. 594, 597, 4 N. W. (2d) 117.

The plaintiffs challenge the city’s right to retain the benefits of the contract if the court is to accept the city’s contention that the agreement is unconstitutional. The plaintiffs have put forth numerous perplexing questions which arise once the contract is held to be unconstitutional. Can the city retain the easement? Is there to be a reconveyance and a removal of the sewer ? May the landowners petition to have the property detached from the city? Is there to be a refund of the damages heretofore paid under this invalid contract?

We acknowledge that the resolution of these questions is not easy. A persuasive argument is made that the city should not be permitted to retain the benefits of the annexation and of the easement. On the other hand, it may be contended that the city is entitled to repayment of $12,391.35 which had been paid by the city to the plaintiffs during the first three years of the contract.

It is our conclusion that the parties should be left where this court finds them. In other words, the contract being unconstitutional, it cannot be enforced. However, since the parties must be considered equally responsible for entering into this agreement and performing under it pro tanto, neither side is entitled to judicial intervention with reference to activities which were previously consummated under the agreement.

In this respect, our position is like that of the Montana court in Builders Supply Co. v. Helena (1944), 116 Mont. 368, 378, 154 Pac. (2d) 270, where it was decided:

“When the statute does not otherwise provide, transactions contrary to its provisions are void and the courts will not lend their assistance to the parties, but will leave them where they have placed themselves unlawfully.”

The appellant is entitled to its costs upon this appeal.

By the Court. — Judgment reversed.


text:
    Lee, Respondent, v. Threshermen’s Mutual Insurance Company, Appellant.

      January 6 —
    February 2, 1965.

      For the appellant there was a brief and oral argument by Arno J. Miller of Portage.
    For the respondent there was a brief by Conway & Conway of Baraboo, and oral argument by Vaughn S. Conway.

   Wilkie, J.

The sole issue presented on this appeal is: When the president and principal stockholder of a corporation deposits personal funds as security to release a judgment lien upon property of the corporation pending an appeal, and the judgment is affirmed and part of it. satisfied from the deposit, can he sue the corporation’s insurance company for negligence and bad faith in handling an offer to settle, at a reduced figure, the claim against the corporation that ripened into the judgment lien ?

The general rule is that a stockholder has no individual right of action for an alleged injury to the corporation in which he holds shares. The underlying rationale is that having chosen to conduct their business in the corporate form, the shareholders are bound to observe this nonconducting entity which they have interposed between themselves and those with whom they deal. The insurance policy was issued to Silverdale Resort, Inc., to provide coverage on property owned by the corporation. There was no relationship or connection whatsoever existing between respondent Lee and the insurance company. Thus, any right of action existing against appellant would belong to Silverdale.

Respondent contends, however, that he is subrogated to any rights Silverdale might have against appellant. Subro-gation is an equitable doctrine, not dependent upon contract or privity, which is applicable when someone other than a mere volunteer pays a debt or demand which should have been satisfied by another. The trial court felt that “the payment of the money was not done on a volunteer basis but by virtue of an order” by the court. This analysis overlooks the fact that the court order was entered pursuant to respondent’s own suggestion that he provide the money in order to remove the threat of an execution on the Silverdale property. Thus the order cannot be considered as determinative in ascertaining the voluntariness of respondent’s action.

Respondent contends that Kennedy-Ingalls Corp. v. Meissner controls the present case. There, an employer paid his injured employee’s medical expenses and compensation as required by the Workmen’s Compensation Act. Subsequently, the employer and the employee brought suit against the supplier of the article which caused the employee’s injuries. The employee settled with the supplier, while the employer released his claim. The supplier then sued the manufacturer of the defective article. The employer attempted to intervene, asserting that it had been subrogated to part of the supplier’s cause of action by reason of the release given to the supplier. The manufacturer’s contention that the employer voluntarily released its claim against the supplier was rejected because the supplier could have tried to hold the employer liable for any damages paid to the employee. Kennedy-Ingalls is distinguishable because the employer who made the release (which the court said was no different than a payment) was potentially liable to the supplier. In the present case, respondent faced absolutely no threat of liability.

Respondent was not a party to the negligence suit brought against Silverdale, and consequently was not affected by the judgment in that case. There was no agreement either written or tacit under which he was obligated or duty bound to make the deposit. Respondent’s conduct was voluntary.

Another characteristic of subrogation is that it is employed to avoid unjust enrichment. Consequently, in the absence of unjust enrichment there is no basis for invoking the doctrine. Appellant in this case has in no way been enriched. Accordingly, a subrogation action will not lie against appellant. It is Silverdale which became enriched when respondent’s funds were employed to satisfy a portion of the judgment against it. Respondent was acting as a surety, and upon payment of a portion of the' judgment, became subro-gated to the rights of the judgment creditor (Patterson) against the principal (Silverdale). Respondent cites authority to the effect that when an officer or stockholder pays corporate debts in order to protect its property, and thereby his own interests, he is entitled to subrogation. But the right the officer or stockholder becomes subrogated to is not that of the corporation, but that of the creditors so paid, and this subrogation provides no basis for upholding either cause of action which plaintiff attempts to assert here against appellant.

By the Court. — Order reversed.

        Marshfield Clinic v. Doege (1955), 269 Wis. 519, 69 N. W. (2d) 558; Oeland v. Woldenberg (1925), 185 Wis. 510, 201 N. W. 807; Lee v. Young (1911), 147 Wis. 53, 132 N. W. 595; Button v. Hoffman (1884), 61 Wis. 20, 20 N. W. 667.

         D’Angelo v. Cornell Paperboard Products Co. (1963), 19 Wis. (2d) 390, 120 N. W. (2d) 70; Kennedy-Ingalls Corp. v. Meissner (1958), 5 Wis. (2d) 100, 92 N. W. (2d) 247.

        Supra, footnote 3.

        Dairyman’s State Bank v. Tessman (1962), 16 Wis. (2d) 314, 114 N. W. (2d) 460.

       50 Am. Jur., Subrogation, p. 719, sec. 56.

       50 Am. Jur., Subrogation, p. 708, sec. 39.

       Ibid.


author: Beilfuss, J. Per Curiam

text:
    Fringer and another, Respondents, v. Venema, Appellant.

      January 6 —
    February 2, 1965.

      For the appellant there was a brief by Kenney, Korf & Pfeil of East Troy, and oral argument by Francis J. Korf.

    For the respondents there was a brief by Morrissy, Mor-rissy, Sweet & Stowe of Elkhorn, and oral argument by Ralph R. Stowe.

       Motion for rehearing denied, without costs, on March 30, 1965.

   Beilfuss, J.

Plaintiffs base their cause of action upon sec. 172.01, Stats.:

"Animals not to run at large. No stallion over one year old, nor bull over six months old, nor boar, nor ram, nor billy goat over four months old shall run at large; and if the owner or keeper shall,- for any reason, suffer any such animal so to do he shall forfeit five dollars to the person taking it up and be liable in addition for all damages done by such animal while so at large, although he escapes without the fault of such owner or keeper; and the construction of any fence enumerated in section 90.02 shall not relieve such owner or keeper from liability for any damage committed by an animal of the enumerated class upon the inclosed premises of an adjoining owner.”

The parties agree that an owner of an animal described in this statute is subject to absolute liability if he allows such animal to run at large even though it escapes the enclosure without fault of the owner or keeper.

The defendant contends that because the statute imposes strict liability the plaintiffs must prove every element of the statute and that the trial court was in error in taking judicial notice that the bull was at least six months old. Admittedly the plaintiffs did not prove the age of the bull nor does it appear in the record.

The first issue for determination is, can the court take judicial notice that a bull old enough to breed 15 heifers in a period from May to September was at least six months old at the time of the breeding.

The trial court did not advise the parties that it would take judicial notice of this fact nor was the court requested to do so by the plaintiffs.

The defendant did not move to review the findings in the trial court but did file three affidavits and a letter with the record on appeal. Two of the affidavits were made by local veterinarians who stated they did not believe it was impossible for a bull calf of less than six months of age to fertilize a heifer. One affidavit was by a farmer with many years’ experience who stated he knew of more than one occasion where a bull calf of less than six months bred a heifer. The letter quoted Dr. Stephen S. Roberts, a specialist in veterinary obstetrics, to the effect that it is “highly improbable” that a bull of six months was sufficiently mature to fertilize a heifer but “we would hesitate to say that it is totally impossible.”

The defendant urges that the trial court was in error by taking judicial notice that the bull was at least six months old to be able to breed the plaintiffs’ heifers because the age at which bulls can fertilize heifers is not a matter of common knowledge and that it is disputable and not impossible that a bull of less than six months has such capacity.

In Ritholz v. Johnson (1944), 244 Wis. 494, 501, 502, 12 N. W. (2d) 738, in considering judicial notice, this court said:

“. . . Matters of common knowledge are not limited to those matters of which practically everyone has knowledge. In a complex society such as ours there are in many fields of activity matters which are within the knowledge of all those who are associated with the activity of which the general public knows little or nothing. For instance, in the railroad business hundreds of thousands of people are employed. No doubt many things are matters of common knowledge and are assumed and acted upon by those engaged in the business daily if not hourly. In a case involving some phase of the railroad business a court might well inform itself as to those matters. It may do this by resort to encyclopedias, authoritative works upon the subject, reports of committees, scientific bodies, and any source of information that is generally considered accurate and reliable, or it may as in State ex rel. Carnation M. P. Co. v. Emery, supra, resort to a judicial investigation of the facts. As ordinarily considered, taking judicial notice does not include these methods of obtaining knowledge of matters of which the court may take judicial notice but of which it has no knowledge.”

Professor Wigmore in 9 Wigmore, Evidence (3d ed.), pp. 547, 548, sec. 2571, states:

“Scope of principle. The scope of facts that may be noticed includes:
“(1) Matters which are actually so notorious to all that the production of evidence would be unnecessary;
“(2) Matters which the judicial function supposes the judge to be acquainted with, in theory at least;
“(3) Sundry matters not included under either of these heads; they are subject for the most part to the consideration that though they are neither actually notorious nor bound to be judicially known, yet they would be capable of such instant and unquestionable demonstration, if desired, that no party would think of imposing a falsity on the tribunal in the face of an intelligent adversary.”

Appellate Courts Use of Facts Outside of the Record by Resort to Judicial Notice and Independent Investigation, 1960 Wisconsin Law Review, 39, written by our present chief justice, represents an enlightened view of when judicial notice may be taken. He there said:

“Even .under the theory that courts only take judicial notice of matters of common or general knowledge, it is recognized that judges sometimes have to look beyond their own personal knowledge to acquaint themselves with facts of which judicial notice may properly be taken. . . .
“However, the tendency is to extend judicial notice beyond the field of facts of common knowledge to the sphere of those facts ‘capable of immediate and accurate determination by resort to easily accessible sources of indisputable accuracy.’
“Courts will take judicial notice of ‘scientific facts which have been well established by authoritative scientists and are generally accepted as irrefutable by living scientists.’ ”

McCormick suggests that the trend is shifting from the test of “common knowledge” to “verifiable certainty.”

We subscribe to the rule that the trial court may in its discretion take judicial notice of facts of “verifiable certainty” either upon its own motion or upon request of a party to the action. If the fact to be noticed is not one of general common knowledge but can be verified to a certainty by reference to competent authoritative sources, and is to be used as an adjudicative as distinguished from a legislative fact, the trial judge or the party requesting judicial notice should notify the parties or the adversary, as the case may be, so as to afford them an opportunity of consulting the same sources or of producing others. This does not mean that there will be a trial of textbooks, but rather it serves only to apprise the court whether the subject is verifiably certain or whether the issue must be proved and determined as a fact question.

We deem the fact question here namely whether a bull must be over six months of age to be capable of fertilizing IS heifers during the period of May to September to be subject to judicial notice if such fact is verifiably certain. However, before judicial notice of such fact can be taken, adequate notice must be given to the parties to enable them to be heard on the question of verifiable certainty.

An issue not raised by the parties but alluded to by the court at oral argument deals with the question of the application of a rebuttable presumption.

Because sec. 172.01, Stats., imposes strict liability, the statute must be strictly construed. Absolute liability cannot be imposed unless the statutory requirement of a “bull over six months old” is established.

Chs. 173 and 174, Stats., recognize that domestic animals may do damage to the property of others and set forth remedies available for the persons sustaining damage. These chapters also provide for defenses in some instances. This is not so in the case of domestic animals described in ch. 172 — in those instances strict liability is imposed. All of the domestic animals described in ch. 172 are commonly used for breeding purposes. We will judicially notice that the legislature acknowledged that the male domestic animals described in the chapter develop propensities so as to make them dangerous to property and persons when they reach the age of breeding serviceability. The legislature recognized this age to be six months in the case of a bull.

We think it appropriate to apply a rebuttable presumption that the bull was six months old where the plaintiff or claimant has established that the defendant owned the bull, allowed him to run at large, and that the bull escaped his enclosure and did damage to the property or person of another.

The application of a rebuttable presumption does not impose an unfair burden upon the owner or keeper of the bull. He is in a much superior position to know the actual age of the animal. The rebuttable presumption only requires him to come forward with some evidence as to its age and if he does, the presumption drops out and the claimant has the burden to prove the bull was six months old or older before he can recover his damage.

In 9 Wigmore, Evidence (3d ed.), p. 289, sec. 2491, it is said:

“. . . it must be kept in mind that the peculiar effect of a presumption ‘of law’ ... is merely to invoke a rule of law compelling the jury to reach the conclusion in the absence of evidence to the contrary from the opponent. If the opponent does offer evidence to the contrary (sufficient to satisfy the judge’s requirement of some evidence), the presumption disappears as a rule of law, and the case is in the jury’s hands free from any rule.”

This rule was followed in McCarty v. Weber (1953), 265 Wis. 70, 60 N. W. (2d) 716; State ex rel. Northwestern Development Corp. v. Gehrz (1939), 230 Wis. 412, 283 N. W. 827; Reichert v. Rex Accessories Co. (1938), 228 Wis. 425, 279 N. W. 645.

The plaintiffs-respondents contend that defendant-appellant- should not be permitted to seek a review of alleged errors of the trial court unless he preserves them by motions for a new trial made to the trial court.

The general rule is that failure to point out with particularity the grounds of error in a motion after verdict constitutes a waiver of such errors. The motion for new trial affords the trial court the opportunity to correct error by granting a new trial.

In Wells v. Dairyland Mut. Ins. Co. (1957), 274 Wis. 505, 518, 80 N. W. (2d) 380, we stated:

“. . . We deem the correct rule to be that no error of the court should be reviewable as a matter of right on appeal without first moving in the trial court for a new trial bottomed on such error, if the error is of a category that a trial court could correct by granting a new trial. Sec. 251.09, Stats., authorizes this court in its discretion to grant a new trial whenever we deem that there has been a miscarriage of justice. The exercise of such power is not dependent on whether the aggrieved party protected his rights by objection or motion in the trial court. While this power is sparingly exercised by this court, we do not hesitate to employ it in hardship cases to prevent a miscarriage of justice.”

The Wells Case and others cited by counsel all involve jury trials and motions for new trial after the return of the verdict, pursuant to sec. 270.49, Stats. In this instance the trial was not to the jury but to the court, and error alleged goes to findings of fact by the court rather than to the verdict of the jury. A companion statute, sec. 269.46 ( 3 ),.provides that all judgments and orders of the trial court can be reviewed by that court within sixty days of notice of entry thereof. We deem this statute sufficiently broad to allow a motion to review the findings of fact entered by the trial court and commend its use to afford the trial court an opportunity to correct its findings of fact, conclusions of law, and judgment, or award a new trial in appropriate instances. Counsel has not cited a Wisconsin case, nor have we found one, requiring that a motion to review be brought in the trial court as a prerequisite to a consideration of the alleged error on appeal in a nonjury case. While we approve and commend the practice, we do not at this time declare it to be mandatory but reserve this question for subsequent opinion or court rule.

Ordinarily this court must decline to consider affidavits which are not a part of the record. Judicial notice, however, by its very nature contemplates that factors beyond the record are under consideration. The trial court in the instant case took judicial notice of a fact without disclosing the sources thereof; under such exceptional circumstances we deem it appropriate for counsel to have supplemented the record on appeal with original affidavits.

Because we have elaborated upon the procedural aspects of judicial notice and have decreed that a rebuttable presumption can be applied to the facts of this case, we deem that in the interests of justice and sense of fair play we should exercise our discretion under sec. 251.09, Stats., to reverse the judgment of the trial court and order a new trial.

The defendant also contends that the proof offered by plaintiffs fails to establish the damages awarded by the trial court. Schmitt testified his heifers were each worth $250 before they were bred and $90 after. Fringer testified his heifers were worth 18 to 20 cents per pound before they were bred and worth half the original value after they were bred. He further testified that they were sold in February and March, several months after they were taken from the pasture. Obviously, Fringer could not immediately determine that the heifers were impregnated. Without further comment- upon the evidence we determine that the defendant has not established that the trial court’s finding on damages is against the great weight and clear preponderance of the evidence. The finding on damages is sustained and need not be relitigated.

The new trial will be restricted to the liability issue.

Be it remembered, “A bull’s worth depends on his performance.”

By the Court. — Judgment reversed, and cause remanded for a new trial consistent with the opinion.

The following memorandum was filed March 30, 1965.

Per Curiam

(on motion for rehearing). In his brief in support of his motion for rehearing the defendant disputes the damages that were found for the plaintiff, Fringer. On reconsideration we are of the view that the trial court’s finding of $875 damages is against the great weight and clear preponderance of the evidence, the pertinent elements of which are set forth in our original opinion.

We conclude, therefore, that the new trial ordered in our original mandate should include a new trial on the issue of the damages of plaintiff, Fringer. Our determination that the trial court’s finding of damages of the plaintiff, Schmitt, “is sustained” is reaffirmed. In all other respects we reaffirm our original opinion. The motion for rehearing is denied without costs.

The original mandate on this appeal is withdrawn and the corrected mandate shall read as follows:

By the Court. — Judgment reversed, and cause remanded for a new trial consistent with the opinion, as modified by the memorandum on rehearing.

        Reuter v. Swarthout (1924), 182 Wis. 453, 196 N. W. 847.

       McCormick, Judicial Notice, 5 Vanderbilt Law Review (1952), 296, 323.

       9 Wigmore, Evidence (3d ed.), pp. 536, 537, secs. 2568, 2568a.

        Reuter v. Swarthout, supra.

       “All judgments and court orders may be reviewed by the court at any time within 60 days from service of notice of entry thereof, but not later than 60 days after the end of the term of entry thereof.”

       See Peterson v. Wingertsman (1961), 14 Wis. (2d) 455, 460, 111 N. W. (2d) 436, and Gilson v. Drees Brothers (1963), 19 Wis. (2d) 252, 259; 120 N. W. (2d) 63, where the rule of the Wells Case was applied to directed verdicts.

       Juergenson, Approved Practices in Beef Cattle Production (1958), p. 64.


text:
    Hain, by Guardian ad litem, and another, Appellants, v. Biron and another, Respondents.

      January 6 —
    February 2, 1965.

      For the appellants there was a brief by Eisenberg & Kletzke, attorneys, and Edwin A. Star and John G. Mueller of counsel, all of Milwaukee, and oral argument by Mr. Star.

    For the respondents there was a brief by Stanley F. Schellinger, attorney, and James G. Doyle of counsel, both of Milwaukee, and oral argument by Mr. Schellinger.

       Motion for rehearing denied, with costs, on March 30, 1965.

   Heffernan, J.

The single issue to be determined on this appeal is: Does the safety responsibility statute impose liability on an insurance company which fails to file a correction in an SR-21 within the prescribed statutory period where the insurance company had no liability policy covering the defendant, Biron, in effect at the time of the accident?

The accident happened on April 13, 1963. The affidavits established that St. Paul issued an automobile liability policy to Biron expiring on February 22, 1962; that the policy was not renewed; that St. Paul issued another policy to Biron, the effective date of which was June 1, 1963, and the expiration date was June 1, 1964; that on or about July 29, 1963, Biron filed an SR-21 with the motor vehicle department in which he stated St. Paul had an outstanding policy covering his liability and indicating no beginning date for the policy period but showing the expiration date as June 1, .1964; that notice of this SR-21 was sent to St. Paul; that on September 3, 1963 (which St. Paul admits was more than thirty days after receiving notice of the SR-21), St. Paul returned the SR-21 on which it denied that any automobile liability policy covering Biron was in effect on the date of the accident.

The appeal centers about two sections of the Wisconsin Safety Responsibility Law. Sec. 344.15 (4), Stats., provides that the commissioner shall forward to the insurance company the SR-21 form that has been filed and that:

“The commissioner shall assume that an automobile liability policy or bond as described in this section was in effect and applied to both the owner and operator with respect to the accident unless the insurance company or surety company notifies the commissioner otherwise within 30 days from the mailing to the company of that portion of the report pertaining to the automobile liability policy or bond.”

Appellants claim that under this subsection the failure of the insurance company to file amounts to an admission of liability.

But this portion of the statute relates to the ministerial function of the commissioner. The commissioner then can request a bond or forfeiture of the license of the person involved. The next subsection, 344.15 (5), clearly limits any additional liability on the insurance company imposed by its failure to file. It states :

“Nothing in this chapter shall be construed to impose any obligation not otherwise assumed by the insurance company or surety company in its automobile liability policy or bond except that if no correction is made in the report within 30 days after it is mailed to the insurance company or surety company, the company, except in case of fraud, whenever such fraud may occur, is estopped from using as a defense to its liability the insured’s failure to give permission to the operator or a violation of the purposes of use specified in the automobile liability policy or bond or the use of the vehicle beyond agreed geographical limits.”

Under this statute, the insurance company need not file when it admits coverage. Prior to the changes brought in 1957, the insurance companies had to file an SR-21 in all cases. The cases that construed the prior statute in situations where the insurance company had filed an SR-21 admitting coverage held that this filing amounted to a waiver of defenses similar to an admission against interest.

In adopting the'above-quoted provisions of sec. 344.15 (5) the legislature was obviously attempting to limit the circumstances under which an insurance company is estopped from claiming no coverage by reason of any failure on its part to timely notify the motor vehicle department of corrections in the report (the SR-21).

The trial court was correct in determining that no liability was imposed on St. Paul by its failure to file timely its correction in the Biron SR-21.

This determination is consistent with Mueller v. American Indemnity Co. the only case in which we have been called upon to construe the 1957 legislative changes embodied in the quoted provisions-of subsections 344.15 (4) and (5). In Mueller we held that an insurance company which had attempted to cancel an automobile liability policy, as against a claim by its insured, was not estopped by reason of its failure to file the corrected SR-21 from asserting no coverage, notwithstanding the provisions of subsections 344.15 (4) and (5).

By the Court. — Judgment affirmed.

       See sec. 85.09, Stats. 1955.

       See Laughnan v. Griffiths (1955), 271 Wis. 247, 73 N. W. (2d) 587; Prisuda v. General Casualty Co. (1956), 272 Wis. 41, 74 N. W. (2d) 777; Perlick v. Country Mut. Casualty Co. (1957), 274 Wis. 558, 80 N. W. (2d) 921; Pulvermacher v. Sharp (1957), 275 Wis. 371, 82 N. W. (2d) 163; Behringer v. State Farm Mut. Automobile Ins. Co. (1957), 275 Wis. 586, 82 N. W. (2d) 915; and Henthorn v. M. G. C. Corp. (1957), 1 Wis. (2d) 180, 83 N. W (2d) 759.

       (1963), 19 Wis. (2d) 349, 120 N. W. (2d) 89.