Cushman v. Carbondale Fuel Co.

• Decision Date: 08 February 1904
• Citation: 98 N.W. 509,122 Iowa 656
• Parties: PEARL CUSHMAN, Appellant, v. CARBONDALE FUEL COMPANY AND LONDON GUARANTEE & ACCIDENT COMPANY, LIMITED
• Court: Iowa Supreme Court

98 N.W. 509

122 Iowa 656

PEARL CUSHMAN, Appellant, v. CARBONDALE FUEL COMPANY AND LONDON GUARANTEE & ACCIDENT COMPANY, LIMITED

Supreme Court of Iowa, Des Moines

February 8, 1904

Appeal from Polk District Court.--HON. A. H. MCVEY, Judge.

THE London Guarantee & Accident Company, Limited, executed to the 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 in 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.

AFFIRMED.

Spurrier Forbes & Mills and Dowell & Parrish for appellant.

Ryan Ryan & Ryan for appellee.

OPINION

SHERWIN, J.

The obligation of the guarantee company was for the protection of the fuel company alone. The plaintiff was not a party to the contract, and had no legal rights thereunder. While the policy provided that the guarantee company might appear and defend for the fuel company in any action brought against it for personal injuries, such provision was for the protection of the guarantee company alone, and imposed no liability upon it beyond the terms of the contract. A court of equity can no more disregard the express provisions of the contract than could a court of law, and neither can make a new contract for the 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 the contract which the parties have themselves made. The only obligation of the guarantee company was to indemnify the fuel company against a "loss actually sustained and paid in satisfaction of a judgment after trial of the issue." This covenant is as explicit and certain as language could well make it, and, as between the parties to the contract, no recovery could be had against the guarantee company because the judgment against the fuel company was not paid, and consequently the covenant was not broken. Wilson v. Smith...