Rich, J.:
I do not see how under the allegations of the amended complaint the plaintiff, The John 0. Orr Company, can be held to be a proper party to this action. That company was not in existence when the *183policy of insurance was issued, nor for more - than a year after it expired. There is no allegation in the complaint that any rights or interest in the policy, or in the claim of the members of the' copartnership thereunder, was ever acquired by the John C. Orr Company, and it has been held that a policy of indemnity cannot be assigned without the consent of the insurer. (Lett v. Guardian Fire Insurance Co., 125 N. Y. 82; Cremo Light Co. v. Parker, 118 App. Div. 845.) If the John C. Orr Company did aid in the defense of the Williams action, and advanced some of the money paid in'settlement thereof under an agreement with or at the request of the assured, a cause of action might have been created thereby against the surviving members of said partnership, but not against .the defendant, whose contract of insurance was a personal one and limited to the firm of John C. Orr & Co. Its benefits did not extend to their successor, although organized for the express purpose of taking over all the assets and business of the former (Cremo Light Co. v. Parker, supra), or to their creditors. The complaint contains no allegation of a cause of action against the defendant in behalf of the John C. Orr Company, and there is consequently a misjoinder of parties plaintiff, because there has been injected into the action as a party plaintiff one who is not entitled to sue, and the complaint is demurrable. (Code Civ. Proc. § 488 ; Havana City Railway Co. v. Ceballos, 49 App. Div. 263.) The cases of Winne v. Niagara Fire Ins. Co. (91 N. Y. 185) and Lewis v. Guardian Fire & Life Assur. Co. (181 id. 392), cited by the respondent as sustaining the contention that the John C. Orr Company is an “ equitable assignee ” and, therefore, a proper party plaintiff, do not sustain the contention and are not in point. In both of those cases the rule declared applied only to a mortgagee of the insured property to whom, by the terms of the policy, the loss, if any, was payable to the extent of his interest under his mortgage. While the conclusion 1 have reached requires a reversal of the interlocutory judgment, I think it may be advisable that we consider the question as to whether the complaint contains facts sufficient to constitute a cause of action.' The facts averred rest largely upon the conclusions of the pleader. While the policy contained at least seven provisions, separately numbered, but.two are set forth. The conclusions of counsel as to the legal effect of different *184provisions of a written instrument ought not to be substituted in a •pleading for the instrument itself. The only two provisions of the policy set forth prohibit the assured settling any claim except at his own cost, and from incurring any expense without the consent of the defendant previously given in writing, and provide that no action shall' lie for any loss under the policy unless brought by the assured himself to reimburse himself for loss actually sustained and paid by him in satisfaction of a judgment after the trial of the issues . and within sixty days from .the date of such judgment, with a further clause limiting the time within which the action may be brought to the period within which the party injured might commence an action against the assured for damages,-or if at the expiration of such period an action was pending against the assured, then within sixty days after the entering and satisfaction of such" judgment. Concededly the plaintiff did not comply with these conditions. Williams was injured March 31, 1904. The statute barred his cause of action against the assured on March 31, 1907, (See Code Civ. Proc. § 383, subd. 5.) An action was pending at that time, which was compromised and settled on December 29, 1908. This action was not commenced until July 6y 1909, and some months after it was barred by the contract limitation, and whatever payment was made in the compromise was not paid after judgment. It is sought to avoid this by an alleged waiver, based upon the defendant’s denial of liability and refusal to defend the pending action. The “acts and declarations” of the defendant in disclaiming and denying its liability are not alleged. ' The. allegation is but the conclusion of the pleader, with the single exception that it is alleged that the defendant declined to defend said action. I do not think that such a denial of liability constituted' a waiver. The declination or refusal to defend was not absolute, but based upon the condition that damages recovered in the action should be paid by the assured. This was the defendant’s legal right under the provisions contained in the'7th subdivision of the policy, that before any liability attached to the defendant a judgment must not only have been recovered against the assured but must have been actually paid by them within sixty days from its entry. The provision of the policy as to defending actions was clearly for the benefit of the defendant, who could not be compelled to defend an action in which the assured were not legally .liable to the plaintiff therein. *185¡Nowhere in the complaint is there an allegation of the legal liability of the assured to Williams, and under such circumstances they could not settle without the defendant's consent, and try the question of their liability to Williams in an action against the defendant. Its liability rests upon a judgment in the action rendered against the assured after trial of the issues. This provision became operative when the question of liability arose. Denial of such liability by the defendant did not waive the conditions, but rather called them into operation. Denial of liability is not of itself a waiver of any of the provisions of the policy, and could not have the effect of converting an indemnity against loss into an agreement to pay any sum that the assured saw fit to pay before judgment. The defendant did not undertake to indemnify .the John C. On-Company, and limited its liability under the agreement with John C. Orr & Co. to the payments made by them in satisfaction of a .judgment after trial of the issues. Even if this were otherwise, a denial of liability and a refusal to defend would not be a waiver ,of the provision limiting the time within which, this action should be commenced against the defendant. (Allen v. Dutchess County Mut. Ins. Co., 95 App. Div. 86.) The respondents’ contention that “ a party indemnified may hold his indemnitor for money paid for a prudent settlement ” ignores the fact that a legal liability on the part of the person indemnified must exist, and the amount paid must be reasonable. A party so paying assumes the risk of being able to prove the facts upon which his liability depends as well as the reasonableness of the amount which he pays. (Dunn v. Uvalde Asphalt Paving Co., 175 N. Y. 214, 218.) This being the rule, it is. necessary that facts tending to show such conditions be pleaded.
The complaint does not allege facts sufficient to constitute a cause of action, and the interlocutory judgment must be reversed and the demurrer sustained, with costs.
Jenks, Buee, Thomas and Cabe, JJ., concurred.
Interlocutory judgment reversed, with costs, and demurrer sustained, with costs.