Freund, Coolahan and Weintraub. The opinion of the court was delivered by Weintraub, J.s.c. (temporarily assigned).
[41 NJSuper Page 223] Plaintiff appeals from a summary judgment obtained by defendant on motion. The amended complaint contains four counts. In the first count plaintiff alleges he is a third-party beneficiary or an insured under a policy of automobile insurance issued by defendant to its named insured, Chicago Express, Inc., and seeks recovery in the amount of two default judgments rendered against him in the State of Illinois as a result of an accident which he there experienced. The second count alleges plaintiff was unable to pay the judgments, his driver's license was for that reason revoked, and by reason of defendant's breach of contract he was unable to continue to drive his tractor, with resulting losses to him. The third count seeks to recover the same losses referred to in the second count on a charge that defendant was negligent in failing to defend the Illinois actions and in failing to satisfy the judgments, and the fourth count seeks to recover the same damages on the charge that defendant was negligent in failing to notify plaintiff that it would not defend the Illinois suits or satisfy the judgments therein.
The trial court entered summary judgment on the ground that plaintiff failed to pay the Illinois judgments and for that reason could not maintain an action.
The judgment cannot be sustained as to any of the counts on the ground upon which the trial court rested it.
"I. COVERAGE A -- BODILY INJURY LIABILITY
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury, sickness or disease, including death at any time resulting therefrom, sustained by any person, caused by accident and arising out of the ownership, maintenance or use of the automobile."
COVERAGE B -- PROPERTY DAMAGE LIABILITY
To pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of injury to or destruction of property, including the loss of use thereof, caused by accident and arising out of the ownership, maintenance or use of the automobile."
The so-called "no action" clause reads:
"No action shall lie against the Company unless, as a condition precedent thereto, the Insured shall have fully complied with all the terms of this policy, nor until the amount of the Insured's obligation to pay shall have been finally determined either by judgment against the Insured after actual trial or by written agreement of the Insured, the claimant and the Company.
Any person or organization or the legal representative thereof who has secured such judgment or written agreement shall thereafter be entitled to recover under this policy to the extent of the insurance afforded by this policy. Nothing contained in this policy shall give any person or organization any right to join the Company as a co-defendant in any action against the Insured to determine the Insured's liability.
Bankruptcy or insolvency of the Insured or of the Insured's estate shall not relieve the Company of any of its obligations hereunder."
"There is a well settled distinction between a contract of indemnity and one to pay legal liabilities. No action can be brought or recovery had ...