The defendant issued a policy of insurance whereby it insured the plaintiff against “ loss from common law or statutory liability for damages on account of bodily injuries, * * * accidentally suffered by any employee or employees of the assured * * * caused by the negligence of the assured ” to an amount not exceeding $1,500. During the term of this policy one of the plaintiff’s employees named Loughlin was injured. He was an infant and he and his father commenced actions for damages against the plaintiff claiming an amount largely in excess of the limit of insurance. The plaintiff gave notice of this accident to the defendant which undertook the defense of the action. The action was subsequently tried by the defendant’s counsel, the plaintiff being also represented by counsel on the trial, and there resulted two judgments against the plaintiff for upwards of $6,000. The defendant’s liability being limited to $1,500, the result to the plaintiff was that if these judgments were sustained he would be compelled to pay more than $4,500, and the defendant would be compelled to pay $1,500. After the judgments were obtained the defendant decided that it would not undertake the prosecution of an appeal and, therefore, wrote to the plaintiff that it “has arrived at the conclusion that the prosecution of an appeal would not be advantageous,” and offering to substitute the plaintiff’s attorney for the attorney who had represented the insurance company in defending the action., Such a substitution was had, the plaintiff prosecuted the appeal, and the Court of Appeals reversed the judgments appealed from and ordered a new trial. Subsequently the plaintiff’s attorney succeeded in getting the actions dismissed fcr want of prosecution which ended any liability of the plaintiff for the accident. The plaintiff, then, commenced this, action and has recovered a judgment for the amount that he was compelled to pay to his attorney in obtaining a reversal of the judgments and a dismissal of the action.
' It is quite clear that. the plaintiff cannot sustain an action upon the policy. The policy contained the usual provision that no action would lie against the insurance company as respects any loss under the policy unless it should be brought by the *823assured to reimburse bim for loss actually sustained and paid by bim after the trial of an action against him for an injury sustained by one of his employees. No judgment has ever been maintained against the plaintiff and he has paid no judgment on account of the injury. Nor was the defendant obliged to defend the action brought against the plaintiff to recover for the injuries sustained by his employee. It had the option of doing so by the policy, but in the case of Cornell v. Travelers’ Ins. Co. (175 N. Y. 239) it was expressly held that the clause in relation to the insurance company defending any action against the assured was intended to confer upon the company the right to control legal proceedings upon such claims at its election, and if it determined that the claims were not such as to impose any liability upon the assured, it had the right to ignore the suit as to it and take its chances with respect to any liability that might ultimately be imposed upon the assured. The defendant had the right, therefore, to refuse to undertake the defense of the two actions brought against the plaintiff and its liability in that case would have depended upon the recovery by the injured employee of a judgment against the plaintiff and the payment by the plaintiff of that judgment, in which case the defendant would have been liable to the plaintiff for $1,500. It undertook such defense, however, and conducted it until the entry of final judgment in the action. There was no obligation under this policy for the defendant to undertake an appeal from that judgment, and it had a perfect right then to say to the plaintiff, as it did say, we decline to prosecute an appeal, and whenever you have to pay any judgment in favor of this injured employee we will pay to you'the $1,500 that we have agreed by the policy to pay on that condition. Certainly up to this time the defendant had violated no agreement that it had made with the plaintiff and had not failed to perform any duty that it owed to the plaintiff. What the plaintiff did in prosecuting the appeal was not to relieve the defendant of any liability, but was to relieve himself of the additional obligation imposed by the judgments upon him of upwards of $1,500. He prosecuted that appeal successfully and finally escaped all liability. But no reason suggests itself to me why the defendant should pay . the *824expenses incurred by plaintiff in relieving himself from this liability. The defendant had the right at the beginning to decline to deferid the actions, being liable for $1,500 if the plaintiff had to pay that amount in consequence of any judgment recovered against him. I think it clearly had the same right after the judgments were rendered to say that it would proceed no further with the defense of the actions or the prosecution of the appeals, but whenever the plaintiff was compelled to pay any judgment in favor of the injured employee it would respond to the amount of its liability as fixed by the policy. That time has never arrived because the plaintiff has never-been held liable to the injured employee and has been compelled to pay no judgment. There has been no adjudication that the claims of Loughlin and his father were within the terms of the policy, but by the terms of the policy the plaintiff has not been compelled'to pay any sum of money for which the defendant is liable. The undertaking to defend imposed no greater liability upon the - defendant than it would upon a lawyer who had been employed to defend, namely, to exercise ordinary care and prudence and provide competent professional skill for conducting the litigation. It might be that if there was evidence of any neglect in the performance of this obligation the defendant would have been liable for damages caused by such neglect.
It seems to me, therefore, that on this record no cause of action was either alleged or proved and the judgment appealed from should be reversed and a new trial ordered, with costs to the appellant to abide the event.
Laughlin, J., concurred.
Judgment and order affirmed, with costs.