#### Pearl Cushman, Appellant, v. Carbondale Fuel Company and London Guarantee & Accident Company, Limited.

Indemnity Insurance: CONSTRUCTION of contract: liability to employe. Where the contract of a guaranty company with an employer provided that no assignment of an interest therein could he made without the written consent of the guaranty company, and that no action should lie for a loss unless brought ‘1 by the assured to reimburse him for a loss actually sustained and paid in satisfaction of a judgment after trial of the issue, ’ ’ an unpaid judgment for a personal injury against the employer cannot be enforced in an equitable action by an employe against the guaranty company, notwithstanding the provisions of Code, section 4087.

*Appeal from Polls District Court.*— Hon. A. H. McVey, Judge.

Monday, February 8, 1904.

The London Guarantee & Accident Company, Limited, executed to tbe Carbondale Fuel Company a contract of indemnity, which provided that no assignment of interest therein should be made without the written consent of the guarantee company, and that no action should lie against the company for loss under the contract, unless brought “by the assured himself to reimburse him for loss actually sustained and paid iii satisfaction of a judgment after trial of the issue.” The plaintiff, in an action antecedent to this one, brought against the Carbondale Fuel Company alone, recovered a judgment for $1,500 for personal injuries, which has never been paid because of the insolvency of the company. This suit is in equity to recover the amount of that judgment of the guarantee company on its contract of indemnity. There was a judgment for the defendant guarantee company. The plaintiff *appeals.*

*657*Spurrier, Forbes*& *Mills*and *Dowell é Parrish*for appellant.

*Byan, Byan & Byan*for appellee.

SheewiN, J.

Tbe obligation of tbe guarantee company was for tbe protection of tbe fuel company alone. Tbe plaintiff was not a party to tbe contract, and bad no legal 'rights thereunder. While tbe policy provided-that tbe guarantee company might appear and defend for tbe fuel company in any action brought against it for personal injuries, such provision was for tbe protection of tbe guarantee company alone, and imposed no liability upon it beyond the terms of tbe contract. A court of equity can no more disregard tbe express provisions of tbe contract than could a court of law, and neither can make a new contract for tbe parties which would impose a liability not originally contracted for; hence, whatever relief a court of chancery might grant plaintiff in any event, must of necessity be based upon and be determined by tbe contract which the parties have themselves made. The only obligation of tbe guarantee company was to indemnify the fuel company against a “loss actually sustained and paid in satisfaction of a judgment after trial of tbe issue.” This covenant is as explicit and certain as language could well make it, and, as between tbe parties to tbe contract, no recovery could be had against tbe guarantee company because tbe judgment against the fuel company was not paid, and consequently the covenant was _not broken. *Wilson v. Smith,*23 Iowa, 252; *Cousins, Sheriff, v. Paxton & Gallagher Co.,*122 Iowa, 465*Henderson-Achert Lithographic Co. v. John Shillito Co.,*64 Ohio St. 236 (60 N. E. Rep. 295, 83 Am. St. Rep. 745); *Homer et al., v. The Savings Bank of New Haven,*7 Conn. 478; *Frye, Adm'r, v. Bath Gas & Electric Co.,*97 Me. 241 (59 L. R. A. 444, 94 Am. St. Rep. 500); *Bain v. Atkins,*181 Mass. 240 (63 N. E. Rep. 414, 57 L. *658R. A. 791). Tbe same principle is recognized in *Moses et al., v. Travellers’ Ins. Co.,*(N. J. Err. & App.) 49 Atl. Rep. 720), where a similar covenant was construed, but tbe judg-men beld paid. In *Seeberger v. Wyman et al.,*108 Iowa, 527, tbe obligation was to save “harmless from all liability,” and it was said that, this liability having been determined, tbe action on tbe bond could be maintained. Tbe distinction between liability and actual loss or damage is well marked, and in tbe above case nothing further was decided than that there bad been a breach of tbe precise covenant of tbe bond. *Hunt v. The Association,*68 N. H. 305 (38 Atl. Rep. 145, 38 L. R. A. 514, 73 Am. St. Rep. 602), was an action in equity by tbe first reinsurer to recover of its insurer tbe indemnity agreed to be paid in case of loss, and the language of tbe opinion seems to support tbe principle contended for by appellant.

It is further contended by tbe appellant that under section 4087 of tbe Code be is entitled to subject tbe liability of tbe guarantee company to tbe payment of bis judgment But, as we have already seen, no liability on tbe part of *the*company has yet arisen, and it must be true that, if tbe fuel company bad no claim against tbe guarantee company which it could enforce, tbe plaintiff has none under this statute.

We think tbe judgment right, and it is aeeibmed.