Plaintiff further avers that after it had incurred said liabilities, defendant, Western Indemnity Company, on or about September 2, 1916, agreed to assume liability in said cases and after that date to undertake the defense or settlement of such cases.

Plaintiff further avers that defendant, though often requested, has failed and refused to pay to plaintiff the obligations incurred by it in the defense of said suits, as it was bound to do, and it therefore prays that upon final hearing hereof it have judgment in the sum of $500, with interest thereon, costs of suit, and general relief.

The Indemnity Company filed its general demurrer to the allegations of appellee's petition, and avers that the same alleges no cause of action against said company, and for further answer it says:

"For further answer, if required, defendant denies all and singular the allegations in plaintiff's said petition contained, and says that the same are not true in whole or in part, and, demanding strict proof of every material allegation in said petition contained, puts itself upon the country."

The record shows no disposition of appellant's demurrer, nor is there any reference thereto in appellant's brief. We shall therefore assume that it was abandoned, and make no further mention of the same in this opinion.

The cause was tried before the court without a jury, and judgment was rendered for appellee, Walker-Smith Company, against the Indemnity Company for $318.35. From this judgment the Indemnity Company has appealed.

The trial court filed its findings of fact, and therein finds that the policy of insurance was issued and was in force and effect on the 2d day of July, 1916, which was the time of the collision that caused the injury to Schroeder and Henry, as alleged by appellee; that thereafter both of said injured parties sued appellee in the district court of Harris county as alleged by appellee; that when citations in said suits were served on plaintiff herein, it transmitted same to defendant Indemnity Company, and requested it to defend said suits, as plaintiff claimed it was obliged to do under said policy; that defendant refused to defend said suits, claiming that the policy did not cover the existing situation, as the truck was not being used for delivery purposes at the time of the collision; that it thereupon became necessary for plaintiff to provide for its own defense in said suits filed by Schroeder and Henry, and to that end it employed McDonald & Wayman, a firm of attorneys at law residing in Galveston, Tex., to take charge of and conduct such defense. It also sent one E. B. Henley from Brownwood, Brown county, Tex., to Houston, Harris coun

thereon to said attorneys to enable them to defend said suits; that Henley, after completing and reporting his investigation, sent plaintiff a bill for $53.85. None of the witnesses who testified on the trial knew whether plaintiff had paid said bill, but plaintiff's Houston manager testified that, if same had not been, it would be paid by plaintiff. There was no testimony showing whether the expenses detailed in Henley's bill had actually been incurred, or the money spent therefor, or that such expenditures, if any, were reasonable and proper, except Mr. Wayman's uncontradicted statement that he met Henley in Houston while working on the cases, and knew that Henley was in Houston for at least two days to investigate the collision. He stated: That Henley had a room with bath at the best hotel in Houston when he met him there. That the principal or home office of Walker-Smith Company, plaintiff, is at Brownwood, Brown county, Tex., where E. B. Henley resides. That competent investigators, resident in Houston, could have been employed there for at least $10 or $15 a day, if an effort had been made to employ them,

and thus hotel bills and railroad and Pullman fares could have been eliminated. This, howeyer, was not done, and Henley was engaged in good faith to do the work. That McDonald & Wayman prepared and filed answers in the suits above mentioned; made some investigation into the facts through Mr. Wayman, who went to Houston for that purpose; investigated questions of law involved or likely to arise in the cases; took the oral deposition of the plaintiff in one of said suits at an actual and reasonable expense of $14.40, which was paid by plaintiff herein; conferred with counsel representing plaintiffs in said suits relative to settlement, and generally conducted the defense of said suits up to September 2, 1916, when defendant herein agreed to defend said suits, both of which it shortly thereafter settled for $300. That the undisputed evidence shows that a reasonable fee for the services rendered by McDonald & Wayman in the preparation and conduct of the defense of said cases up to September 2, 1916, no definite fee having been fixed between them and plaintiff, is the sum of $125 in each of said cases, or a total of $250. Plaintiff, while obligated to pay said sum of said attorneys, has not yet done so.

By the first assignment it is insisted that the trial court erred in rendering judgment against appellant for any part of the attorney's fee promised by appellee to McDonald & Wayman, because: First, the contract under which the suit was brought being one for indemnity against loss only, no recovery thereunder can be had until a loss is actually sustained, and that as the undisputed evidence shows that appellee had not actually paid such attorney's fees, or any part thereof, at

The contention of appellant in support of its assignment is based upon the no-action clause of the policy, which is as follows: "No action shall lie against the company to recover under any of the agreements herein contained, unless brought by the assured personally to recover money actually expended by him in satisfaction of claim or liability by due process of law, resulting from injuries actually caused by reason of the ownership, maintenance and use of said automobiles.

It ignores section 2 of the policy hereinbefore set out, by which said Indemnity Company directly and unqualifiedly contracted and agreed "to defend in the name, and on behalf of the assured any suits, even if groundless, brought against the assured to recover damages on account of such happenings as are provided for by the terms of the preceding paragraph," the preceding paragraph being section 1 by which the Indemnity Company agreed to indemnify appellee against loss by reason of liability on account of bodily injuries, including death resulting therefrom, accidentally suffered, or alleged to have been suffered, while such policy was in force by any person by reason of the ownership and use of appellee's automobile truck. That the suits of Schroeder and Henry against Walker-Smith Company were such suits as appellant, by its contract or policy, had agreed to defend. That it refused to 'defend said suits after being notified or requested to do so by appellee, and that by reason of such refusal it became necessary for appellee for its own protection to employ attorneys to file answers in said suits and make such investigations and preparation as was necessary and proper for the trial, is unquestioned. It is also unquestioned that appellee did employ McDonald & Wayman to defend said suits and that it did obligate itself to pay said attorneys a reasonable fee

for these services.

[1] As already shown, appellant had, by the second clause of the contract or policy, unqualifiedly obligated and bound itself to defend the suits brought by Schroeder and Henry against appellee, and that appellant had failed and refused to defend said suits, as it had obligated itself to do. This being true, it was incumbent upon appellee, Walker-Smith Company, to incur the attorney's fees for which it sued and recovered in this cause. Since appellee's suit against appellant was not one to recover money actually expended by it in satisfaction of a claim

it established that it was obligated to pay said fees, and that the same was reasonable, the liability of appellant to repay the expenses necessarily incurred by appellee, because of the breach of the contract by appellant had arisen, and appellee's cause of action had accrued. Lowe v. Fidelity & Casualty Co., 170 N. C. 445, 87 S. E. 250; South Knoxville Brick Co. v. Surety Co., 126 Tenn. 402, 150 S. W. 92, Ann. Cas. 1913E, 107; Royal Indemnity Co. v. Schwartz, 172 S. W. 581.

The so-called no-action clause of the pol icy relied upon by appellant as a defense to appellee's cause of action has no application to the issues involved in this cause. The contention of appellant reduced to its final analysis is that it was the intention of the contracting parties, at the time of making the contract, to contract that in the event appellant should breach its obligation to defend the suits, such as those filed by Schroeder and Henry, and in the event appellee was compelled to employ attorneys to make such defense, it should compel the attorneys so employed to sue it, to recover judgment for their fees in a court of last resort, and that after said judgment had become final and appellee had paid said judgment, and only then, and not until then, would appellant be liable for attorney's fees incurred by appellee by reason of appellant's refusal and failure to defend said suits. In other words, appellee must prosecute, or cause to be prosecuted, a suit against itself to final judgment in a court of last resort, and then pay such judgment before it could sue appellant for damages it had suffered by reason of appellant's breach of its agreement to defend against the suits of Schroeder and Henry. Such contention is wholly untenable, and cannot be sustained. In the case of South Knoxville Brick Co. v. Surety Co., above cited, where practically the same issues as involved in the present case were being discussed, the Supreme Court of Tennessee said:

"Assured could not have supposed that the company would breach its contract in the outset, and occasion loss by refusing to assume responsibility for a suit based upon a claim covered by the policy. The company could not have intended, as a consequence of its own default, to make this default the occasion for the imposition of a new condition upon assured. The parties were not contracting with reference to an initial breach by either, and this condition evidently refers to losses under suits defended, as provided in the policy, by the company, and not to losses under suits for which the company repudiated its liability. This is the construction placed upon an identical condition in a similar policy by the Supreme Court of the United

Appellant filed his original answer on March 28, 1916. In addition to a general demurrer and general denial this answer avers in substance:

"That said purported mortgage on its face provides that said Robinson promised and agreed to extend and have extended the time of payment of said note described in said mortgage, and contained the addition that unless such extension be procured, and granted, and the time of payment of said note, which was then in the hands of another party as collateral, extended, said mortgage shall become and be null and void and without effect, and that such extension must be procured within 60 days from the date of said mortgage; that such extension was not so procured within such time, nor at any other time, and because of such failure to so procure such extension, and failure of consideration of such mortgage, the said mortgage is null and void, and that plaintiff has no lien of any kind or character upon any of the property therein described."

And by cross-action against plaintiff, T. B. Robinson, defendant A. Pye alleged that on the 19th day of February, 1916, he was the owner of and in possession of two mules, and that plaintiff wrongfully took both of said mules from the possession of defendant, and deprived defendant of the use thereof, to his damage in the sum of $150; that defendant was the owner of both of said mules, and that plaintiff, T. B. Robinson, has no right, title, or interest in them, or either of them, and wrongfully asserted an interest in said mules, or claim thereof, and prayed for judgment for his said damage and for title and possession of said two mules.

On October 17, 1916, plaintiff filed his sec ond amended original petition and second supplemental petition, and on same day defendant A. Arsenaux filed his original answer, whereby he alleged that he did in fact execute said mortgage, but that the real consideration therefor was the extension of said note to be obtained within a period of 60 days, and to be extended for a period of 12 months; that such extension was to be obtained within 60 days from the date of the execution of the mortgage; that at the end of 60 days plaintiff had wholly failed and refused to execute said extension, and notified said defendant Arsenaux that he would not extend the payment of said note; and that because of such failure to extend the time of payment of said note within such time said mortgage was null and void, and was not a lien upon the property therein described.

On October 17, 1916, by order duly entered, an interlocutory judgment by default was granted and entered against defendant A. Pye. On October 18, 1916, said cause was tried, and submitted to the jury on special issues. Question No. 1 was:

A. Arsenaux to T. B. Robinson, and sought to "Were the terms of the mortgage executed by be in this case foreclosed, complied with by Robinson in this: Did Robinson within 60 days after the execution of the mortgage extend and procure an extension of the time of payment of the debt from the time of the execution of the mortgage until October 15, 1915?"

To which question the jury answered: "No."

Defendant A. Arsenaux, of Yazoo county, Miss., failed to file answer to said cause, and plaintiff demanded and obtained judgment by default against said defendant.

The cause was tried on the 2d day of May, 1916. Charge No. 1 requested by defendant A. Pye was refused, and judgment was rendered on special issues that were submitted to the jury on May 2, 1916, in favor of plaintiff, T. B. Robinson, against defendant A. Arsenaux in the sum of $1,585.09, with interest, in favor of T. B. Robinson, plaintiff, against defendant J. S. Bowser for the sum of $150, and in favor of plaintiff, Robinson, against defendant A. Pye and all other par203 S.W.-7

in said cause, and on November 3, 1916, he filed his first amended motion to vacate said default judgment. By order entered November 8, 1916, the motion of defendant A. Pye to have said interlocutory judgment vacated was refused, and on the same day judgment was rendered and entered in favor of plaintiff Robinson, against defendant Arsenaux on said note for the sum of $1,653.43, and on said verdict of the jury that plaintiff take nothing against defendant J. S. Bowser and he go hence without day and against A. Pye, making final interlocutory judgment, and establishing and foreclosing the mortgage lien on the two mules purchased by Pye from Arsenaux and taken from the possession of Pye by plaintiff.

The record shows that appellant was'not represented by an attorney upon the trial when the interlocutory judgment by default was rendered against him, and his answer was not then called to the attention of the court. On the former trial he was represented by an attorney, his answer was duly presented, and his attorney requested special