Garnishor and garnishee have appealed from a judgment wherein the trial court awarded the amount sought by the garnishor to the Superintendent of the Division of Insurance (hereafter called “Superintendent”) as receiver of the assets of the insolvent International Indemnity Exchange (hereafter called “International”). This court has jurisdiction because the Superintendent in his capacity as a state officer is a party. Leggett v. General Indemnity Exchange, 363 Mo. 273, 250 S.W.2d 710.
International entered into an agreement with General Reinsurance Corporation (hereafter called “General”) whereby it reinsured with General certain obligations arising under its automobile liability policies. The effect of this agreement is the principal issue on this appeal and its terms will be discussed in detail subsequently. International issued to James T. Higgins its “Multiple Peril Policy” of automobile liability insurance, and while it and the reinsurance agreement were in effect Higgins was involved in an automobile accident. Suit for personal injuries was filed against him by Edna Whiteley and a separate suit for consequential damages was filed against him by Franklin E. Whiteley, husband of Edna. Mr. Whiteley subsequently died and the First National Bank of Kansas City, as executor of his estate, has been substituted as party plaintiff. Edna Whiteley obtained judgment against Higgins and received $7,-500 in satisfaction thereof. Before the husband’s suit for consequential damages was tried the Superintendent brought proceedings against International pursuant to Section 375.560, RSMo 1959, V.A.M.S., alleging that it was insolvent, and obtained a judgment vesting in him as receiver all of its assets. Counsel for Higgins, which had been furnished by International in the suit for consequential damages, withdrew from *141that case. Mr. Whiteley then served notice ■on the Superintendent and on General to ■defend the suit, and when both either refused or failed to do so he obtained a judgment against Higgins in the amount of $5,-'000. This judgment was not satisfied, general execution was issued, and summons of garnishment was served on General. Interrogatories were exhibited to and answered by General in which it denied that it was obligated to Higgins. Plaintiff-gar-nishor filed a denial and set forth his contentions and claim, and General filed its reply and the issues were thus formed. General then filed and the trial court sustained a motion to require that the Superintendent be made a party to the garnishment proceeding. After first unsuccessfully seeking a writ of prohibition in this court the Superintendent filed what he termed a ■counterclaim against plaintiff and a cross-■claim against General in which he asserted that plaintiff-garnishor had no right to recover against General and that all money payable by General under the reinsurance agreement was payable to him as receiver ■“on behalf of all the creditors of International.” The trial court ruled that the Superintendent was “entitled to judgment against [General] in the sum of $5,000 with interest.” Plaintiff-garnishor and General have appealed.
For a valuable consideration General agreed in Article I of the reinsurance agreement to “accept reinsurance” from International as set forth in Exhibit A attached to and made part of the agreement and entitled “Excess Reinsurance of Automobile and other Bodily Injury Liability-Single Limit Liability.” Section 1 of the exhibit, ■entitled “Cover,” provided that “as respects accidents” occurring under policies of insurance “covered hereunder” International was to “pay in respect of each accident the amount of loss indicated” therein as “Company’s Retention.” General agreed to accept “on an excess basis, all loss above said retention; provided the loss to the Reinsurer on account of each accident shall not exceed the amount set forth * * * as ‘Maximum Amount to be Reinsured with Reinsurer.’” International’s retention of “Automobile and other Bodily Injury Liability” was stated to be $5,000 per person and $10,000 per accident, and the “Maximum Amount to be Reinsured with Rein-surer” was $20,000 per person and $40,000 per accident. As the “provisional premium” for the reinsurance, International was to pay General “the actual excess premium charged” the policyholder for the limits re-insured less a commission to be retained by International. A “rating formula” was provided for determining premiums payable to General, and therein the term “losses” in respect to any rating period was defined to mean “paid loss and loss expense plus pending loss and loss expense resulting from accidents occurring during said period.” It was further provided in the exhibit that “as respects a loss for which the Company [International] is held liable for an amount in excess of the policy limit, the Reinsurer [General] hereby agrees to assume seventy-five percent (75%) of that part of such loss which is in excess of the policy limit, provided that as respects such loss, the Company shall retain the amount applicable * * * as ‘Company’s Retention’ and the liability of the Reinsurer under this Exhibit shall not exceed the amount applicable * * * as ‘Maximum Amount to be Reinsured with Reinsurer.’ ”
Article II of the reinsurance agreement pertained to “General Exclusions and Special Acceptances.” Article III, entitled “Liability of Reinsurer,” was as follows: “The liability of the Reinsurer [General] shall follow that of the Company [International] in every case and shall be subject in all respects to all the general and special stipulations, clauses, waivers and modifications of the Company’s policy, binder, or other undertaking and any endorsements thereon; * * *. Payments under this Agreement shall be made directly to the Company or to its liquidator, receiver or statutory successor on the basis of the liability of the Company under the contracts reinsured, without diminution because of *142the insolvency of the Company. It is agreed, however; that the liquidator or receiver or statutory successor of the insolvent Company shall give written notice to the Reinsurer of the pendency of a claim against the insolvent Company on the contracts or contract reinsured within a reasonable time after such claim is filed in the insolvency proceeding and that during the pendency Of such claim the Reinsurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated any defense or defenses which it may deem available to the Company or its liquidator or receiver or statutory successor. The expense thus incurred by the Reinsurer shall be chargeable, subject to court appeal, against the insolvent Company as part of the expense of liquidation to the extent of a proportionate share of the benefit which may accrue to the Company solely as a result of defense undertaken by the Reinsurer.”
By Article IV International agreed to advise General of “all claims and any subsequent developments pertaining thereto, which may in its opinion develop into losses involving reinsurance hereunder. * * * All payments of claims (including the interest accrued prior to the judgment where such interest is added to the judgment) in which this reinsurance is involved shall be binding upon the Reinsurer, which shall be bound to pay or allow, as the case may be, its proportion of such payments.” There then followed a provision for apportioning ■ certain expenses, and it was also provided that upon request International would “afford the Reinsurer an opportunity to be associated with the Company, * * * in the defense or control of any claim or suit or proceeding involving this reinsurance, * * *.” It was then provided that the “Reinsurer shall reimburse the Company promptly for loss against which indemnity is herein provided, upon receipt by the Reinsurer of - satisfactory evidence of payment of such loss.”
Article V, entitled “Salvage,” provided that in the event international obtained “reimbursement” or made a “recovery,” General was to receive credit, when the reinsurance is oh the share basis, with “its share of any salvage on account of claims and settlements-involving reinsurance hereunder,” and when the reinsurance is on the excess basis, the salvage should “always be used to reimburse the excess carriers in the reverse order of their priority * * * before being used in any way to reimburse [International] for its primary loss.” The remaining articles, entitled “Reports and Remittances,” “Reserves and Taxes,” “Inspection,” and “Arbitration” have no bearing on the issues presented. The provisions of the arbitration article, if its provisions are or would be binding on the Superintendent and General after receivership, have been waived by them. -It does not appear that the-issue was raised in the trial court, and no mention of the article is made by any party to this appeal.
“An ordinary contract of reinsurance, in the absence of provisions to the contrary, operates solely as between the re-insurer and the reinsured. It creates no privity between the original insured and the reinsurer. The contract of insurance and the contract of reinsurance are totally distinct and unconnected.” O’Hare v. Pursell, Mo.Sup, 329 S.W.2d 614, 620; 46 C.J.S. Insurance § 1232a. Such reinsurance contract may be one of indemnity against loss or of indemnity against liability, and in the event the contract is the former no action will lie thereon, absent some statutory provision which in effect converts such contract to one of indemnity against liability, until payment has been made. If the reinsurance contract is one of indemnity against liability, whether by its terms or by operation of statute, the liability of the re-insurer thereunder becomes fixed when the reinsured company incurs liability under its policy to the original insured. In this event, upon the insolvency of the reinsured company the proceeds due under the reinsurance contract constitute assets of the insolvent company. The original insured, that is, the policyholder, has no special claim *143upon them. Whether the reinsurance contract is for indemnity against loss or against liability, the liability of the reinsuring company is solely to the reinsured company, or to its receiver in the event of its insolvency. However, in the absence of statutory restrictions, and there are none in this case, a reinsurance contract may be drawn in such form and with such provisions so as to create a liability on the part of the re-insurer directly to the original insured. For example, see Homan v. Employers Reinsurance Corporation, 345 Mo. 650, 136 S.W.2d 289, 127 A.L.R. 163; and O’Hare v. Pursell, supra. See also 46 C.J.S. Insurance § 1224a, and the cases cited in 35 A.L.R. at page 1351 and 103 A.L.R. at page 1488. Such liability necessarily must be based on the theory that the original insured is a third party beneficiary of the reinsurance agreement. In Couch, Cyclopedia of Insurance Law, § 2276, p. 7434, it is stated that “in any case where the contract of reinsurance is more than a mere contract of indemnity, and is made for the benefit of the policyholders of the reinsured, and by it the reinsurer assumes the liability of the latter on its policies, the liability of the re-insurer may be directly enforced by the insured, or by his privies.” See, also, the cases cited in O’Hare v. Pursell, supra, 329 S.W.2d at page 620.
From the above it is readily apparent that the first question for determination is whether, as General contends, the reinsurance agreement in this case provided for indemnity against loss only as distinguished from indemnity against liability. If so, then since neither International nor the Superintendent, as receiver, has paid any amount on the judgment in favor of plaintiff-garnishor, there has been no loss, and General owes nothing to plaintiff-garnishor nor to the Superintendent under its contract. However, if the reinsurance agreement is one of indemnity against liability, then General owes $5,000 under its agreement, and the question remains whether this liability of General is an asset of the insolvent International to which the Superintendent is entitled, or whether this liability is to plaintiff-garnishor as the third-party beneficiary of the reinsurance agreement.
In view of the numerous cases in this and other jurisdictions in which the issue has been presented whether the language of a reinsurance agreement results in indemnity against actual loss or against liability, it is not entirely without significance that the agreement in this case has been worded in such a way that proponents of either position can point to isolated phrases in the agreement which, standing alone, support their position. If indemnity against loss only had been intended it would have been easy to so state in clear and unequivocal language. When the agreement as a whole is read it is immediately apparent that the term “loss” is used in the agreement to refer to the fact of actual payment of claims under the policies insured and also to the incurrence of liability under the policies whether or not any payment actually has been made. Reference to the terms of the agreement as previously set out will so demonstrate. It is apparent when it was stated in the reinsurance agreement, “as respects accidents * * * under policies of insurance” reinsured, that International should pay “the amount of loss” indicated as “company’s retention,” reference was had to the obligation of International under the policies, which by their terms and by reason of §§ 379.195 and 379.200 RSMol959, V.A.M.S., provided indemnity to the policyholder against liability, not loss. When the agreement further provided in the same sentence that General “accepts, on an excess basis, all loss above said retention,” within the limits therein set out, this reference also was to liability under the policies. In Section 1 of the exhibit attached to the reinsurance agreement, the terms “Company’s Retention” and “Maximum Amount to be Reinsured with Reinsurer” expressly referred to “Automobile and other Bodily Injury Liability” under the policies. In addition, note the following language in Article III of the *144agreement which is entitled “Liability of Reinsurer.” “The Liability of the Rein-surer [under the reinsurance agreement] shall follow that of the Company [International] in every case * * *. Payments under this Agreement shall be made directly to the Company or to its liquidator, receiver or statutory successor on the basis of the liability of the Company under the contracts reinsured, without diminution because of the insolvency of the Company.” (Italics added.) To hold, as General contends, that under the existing circumstances the reinsurance agreement was limited to indemnity against loss would require us to ignore completely the above provision. There is no reasonable explanation for its presence in the agreement consistent with the contention of General, and when it is recognized that throughout the reinsurance agreement the term “loss” is used in a dual meaning, the presence of the above provision is consistent with the construction of the agreement as one of indemnity against liability, and we so hold. See Homan v. Employers Reinsurance Corporation, supra, and the careful and complete analysis there made of a reinsurance agreement with provisions remarkably similar to those in this case and where it was also contended that the agreement was for indemnity against loss only.
We turn now to the question of whether plaintiff-garnishor or the Superintendent is entitled to the proceeds due under the reinsurance agreement. This depends upon whether the agreement established the policyholders of International as third-party beneficiaries, or whether the proceeds of the reinsurance constitute assets of the insolvent International.
International’s policy to Higgins provided that it was “to pay on behalf of [Higgins] * * * all sums which [Higgins] shall become legally obligated to pay as damages because of bodily injury, sickness, or disease * * * caused by accidents arising out of the ownership, maintenance, or use of the automobile described in this policy * * One of the “conditions” set forth in the policy was that no action should lie against International unless the insured, Higgins, should have fully complied with the terms of the policy, nor until the amount of the insured’s obligation to pay be finally determined either by judgment against the insured after actual trial or by written agreement of the insured, the claimant, and International. It was then provided in the policy that “Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover [against International] under this form [policy] to the extent of the insurance afforded by this form * We shall turn now to the terms of the reinsurance agreement. By it General agreed to accept “Excess Reinsurance of Automobile and Other Bodily Injury Liability,” and it was provided that “as respects accidents * * * under policies of insurance of the kinds covered hereunder * * * the Company will pay * * * the amount of loss [actually the amount of liability] indicated below as ‘Company’s retention’ and * * * [General] hereby accepts, on a excess basis, all loss [actually the amount of liability] above said retention” within the stated maximum limits. The reinsurance agreement then provided that the “liability of [General] shall follow that of [International] in every case and be subject in all respects to all the general and special stipulations, clauses, waivers and modifications of [International’s] policy, binder, or other undertaking and any endorsements thereon; * * (Italics added.) For and in consideration of this undertaking General received all of “the actual excess premium charged” by International for the limits of liability rein-sured less a commission to International. It is true that by entering into this agreement with General it was not possible for International to relieve itself of its primary liability under its policy' for the amounts above its “retention,” but it was not necessary that it be so relieved before the rein*145surance agreement could constitute the policyholder a third-party beneficiary thereof. A similar provision in a reinsurance agreement was considered by this court in Homan v. Employers Reinsurance Corporation, supra, and at page 298 of 136 S.W.2d it was said: “The words 'subject to’ are defined by lexicographers as meaning ‘liable,’ and the word ‘liable’ is defined as ‘bound or obligated in law or equity; responsible; answerable.’ * * * ‘Subject to’ is also defined as ‘controlled by.’ * * * The particular clause of the contract provided * * * that ‘each reinsurance hereunder shall be subject to all the general and special terms and conditions of such policy and endorsements.’ We think this clause should be construed in a reasonable and common sense manner with a view to the necessary intention of the parties at the time the contract was made. It meant, of course, only such terms and conditions as were reasonably applicable to such a contract of reinsurance between the parties and such terms and conditions, therefore, as the parties may be presumed to have had in mind when the contract was made. * * * The original policy issued by [the then insolvent insurance company] to [the policyholder] * * * expressly provided for the payment of any final judgment for a personal injury cause by any of the motor vehicles operated by [the policyholder], within the limits set forth, and further provided that upon failure to pay any such final judgment, such judgment creditor could maintain an action in any court of competent jurisdiction to compel such payment. We think it was reasonably within the contemplation of the parties that such provisions of the policy become a part of the reinsurance contract and the reinsurer became bound thereby for the excess. It was for the benefit of [the insurance company] and for its inspired that such judgments, for which it was liable, be covered by such contract. The reinsurance of the excess was in effect upon the same terms and conditions. If the reinsurance contract was not to be subject to the provisions set out in the primary insurance contract, to wit, that any judgment against [the policyholder] be paid the contract could have been made definite and certain. It was a matter particularly appropriate to the subject matter of the reinsurance contract, and in view of the particular terms of the reinsurance contract, we may presume that the parties had such result in view when the contract of reinsurance was made.” (Italics added.) In considering the motion for rehearing in the Homan case, it was stated that the reinsurance agreement was “primarily” for the benefit of the policyholders of the rein-sured company.
We are in complete agreement with the above statements and with their application to the facts of this case. The primary purpose of reinsurance which provides indemnity against liability as distinguished from indemnity against actual loss is to guarantee the integrity of the policies of the re-insured company. This is particularly true in this case, because by providing that the liability of General shall follow and be subject to that of International under its policies, General assumed the liability on International’s policies for the excess amount reinsured. Therefore, the policyholder, or those who may claim under him, are third-party beneficiaries of such reinsurance agreement. When the judgment was rendered against Higgins and remained unpaid a cause of action against International accrued to Higgins under the policy, and to plaintiff-garnishor under the policy and the statutes. As third-party beneficiary of the reinsurance agreement, a cause of action for the amounts reinsured also accrued to plaintiff-garnishor against General. See Homan v. Reinsurance Corporation, supra at page 300 of 136 S.W.2d where it is said: “The measure of [policyholder’s] liability to plaintiff was also the measure of [insurance company’s] liability to plaintiff. The measure of the liability of [reinsurance company] to plaintiff * * * must be measured by the terms 'of - the agreement entered into between the [re-instirance company] and [insurance com*146pany] providing for the payment of the judgments against [policyholder] in excess of the amounts fixed and within the limits prescribed. The measure of liability of [reinsurance company] to plaintiff, * * * remains and is the same whether [insurance company] remains solvent or insolvent.” While some authority may be found to the contrary, see Stickel v. Excess Ins. Co. of America, 136 OhioSt. 49, 23 N.E.2d 839 and Melco System v. Receivers of Trans-America Ins. Co., 268 Ala. 152, 105 So.2d 43, there is no contention that the reinsurance agreement was not a Missouri contract governed by the law of this state, and we think the correct and applicable rule is set forth in the Homan case.
We find only one material distinction between the facts of this case and those in the Homan case. In Article III of the reinsurance agreement is the following provision which apparently was not in the reinsurance agreement in the Homan case, or at least if present no specific mention was made of it. “Payments under this Agreement shall be made directly to [International] or to its liquidator, receiver or statutory successor on the basis of the liability of [International] under the contracts reinsured, without diminution because of the insolvency of the Company.” It is upon this provision that the Superintendent principally relies to claim the funds “on behalf of all the creditors of International.” Since the reinsurance in the Homan case was, as in this case, excess insurance, in the absence of the above provision the only feasible procedure for the reinsurance company to make payment, at least prior to insolvency proceedings, would be to make it to the company issuing the policy so that one check for the total amount could be issued to the claimant.
In order to determine the effect of this provision we must examine its purpose and read it in context. Ordinarily a claim under a reinsured policy exceeding the amount of International’s “retention” would be paid from two sources. International would pay the amount of “retention” and General would pay the “excess.” But, it was not contemplated that the recipient should receive two checks. Instead, General would pay International who would issue a single check to the claimant. This arrangement did not mean that General was not directly liable to the third-party beneficiary for its excess share. Also, if International paid the full amount of the claim, it then had a claim against General for reimbursement of the amount paid on General’s behalf. This is contemplated in the agreement by the provision in Article IV that General should “reimburse” International promptly for loss against which indemnity is provided “upon receipt by the Reinsurer of satisfactory evidence of payment of such loss.” If after International made payment of General’s share, International became insolvent, then the provision becomes applicable that General should pay the full amount without reduction to the receiver. It is clear that prior to the insolvency of International the provision calling for General to make payment of its share of excess coverage was for expedience in making payment of General’s liability to the third-party beneficiary; it was not intended to relieve General of that liability. The next question is whether General be relieved of that liability to the third-party beneficiary after insolvency of International because of this provision concerning the method of payment. As previously noted the primary purpose of the reinsurance constituting indemnity against liability is to guarantee the integrity of the policies, and that is true whether or not the insurance company is insolvent. In fact, the effect on the policyholder, and those who claim under his policy, of the insolvency of the company issuing the policy is the principal contingency to be guarded against by the reinsurance. However, it is significant that should the contention of the Superintendent be sustained, the result would be quite the opposite. When we read the above provision in con* ext and in connection with the overall purpose of the *147reinsurance agreement, it is clear that the provision for payment of the money to the liquidator, receiver or statutory successor was for the purpose of providing a procedure of payment to the claimants in order to guarantee the integrity of the policies; not to assure payments to general creditors whose interest General had no concern or reason to indemnify under the provisions of its reinsurance agreement. This general question was considered in that part of the opinion in the Homan case disposing of contentions in the motion for rehearing. The reinsurance company there argued that it would be liable to the insurance company’s assigns and also to the judgment creditor of the policyholder. At page 302 of 136 S.W.2d it was held: “The resinsurance agreement, in so far as it provides for the payment of any judgment against [the policyholder], is of course, an agreement for the benefit, not only of plaintiff, but also of [the policyholder] and [the insurance company], although primarily for the benefit of plaintiff [judgment-creditor of the policyholder], the ultimate and primary beneficiary. But defendant’s [reinsurance company’s] liability under the reinsurance agreement will be discharged, * * upon the application of said funds, representing the liability of defendant under the terms of said agreement, to the payment of plaintiff’s judgments. If [the insurance company] collected under its cause of action for the failure of [reinsurance company] to pay said judgments and discharge its liability thereon the recovery would have been for the benefit of plaintiff (in this connection see Equitable Surety Co. v. United States, to Use of W. McMillan & Son, 234 U.S. 448, 456, 34 S.Ct. 803, 80S, 58 L.Ed. 1394).” The Superintendent, as receiver, acquired no greater rights under the reinsurance agreement than International had.
Plaintiff-garnishor in this case was the third-party beneficiary under the reinsurance agreement, and if International or its liquidator, or receiver, or statutory successor collected from. General the amount due from it under the judgment obtained against Higgins it would have been for the benefit of plaintiff-garnishor. In this situation where all the parties concerned are parties in the garnishment proceeding and on this appeal, there is no occasion for the funds due plaintiff-garnishor under the reinsurance agreement to be transmitted to him from General through the Superintendent. Therefore, upon demand by plaintiff-gar-nishor,-which demand was made by filing the garnishment proceeding, payment should be made by General directly to plaintiff-garnishor, and such payment will discharge all of its liability under its reinsurance agreement to the Superintendent as to this particular claim.
The judgment is reversed and remanded for the entry of a judgment according to the views above expressed.
PER CURIAM.The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court en Banc.
WESTHUES, C. J., and LEEDY and HOLLINGSWORTH, JJ., concur. DALTON, J., concurs in separate opinion filed. STORCKMAN, J., dissents in separate opinion filed. EAGER and HYDE, JJ., dissent and concur in dissenting opinion of STORCK-MAN, J.