Mr. JUSTICE CRAIG delivered the opinion of the court: This is an appeal by appellant, the Maryland Casualty Company, from a judgment of the Appellate Court for the First District reversing a judgment of the municipal court of the city of Chicago and entering judgment in that court in favor of appellee for the sum of $856.43. A certificate of importance and an appeal have been granted by the Appellate Court.

The cause was tried in the lower court on a stipulation of facts, from which it appears that on July 9, 1907, appellant issued to appellee a policy of insurance by which it agreed to indemnify the latter to the amount of $5000 against loss from liability imposed by law for damages on account of bodily injuries or death suffered by any patient or patients under treatment at its hospital. In February, 1908, Clara Appel, while a patient at the hospital, sustained bodily injuries, for which she subsequently recovered a judgment against appellee in the circuit court of Cook county for the sum of $7500. The cause was appealed to the Appellate Court for the First District, where the judgment of the lower court was affirmed. (Ravenswood Hospital v. Appel, 167 Ill. App. 187.) In order to prosecute the appeal an appeal bond in the sum of $9000 was required. Appellee was at first unable to furnish such a bond. Application was made to several companies, and finally to the Fidelity and Deposit Company of Maryland, which agreed to furnish the appeal bond provided appellee would furnish collateral security to the extent of $8000, and further agreed to accept the agreement of appellant to reimburse it to the extent of $5000 should it be called upon to pay the judgment appealed from and to accept collateral security of appellee to the amount of $3000. In the application for the appeal bond appellee stated that "the plaintiff secured a judgment for $7500 against the hospital, and we carry liability insurance with the Maryland Casualty Company, who are liable for $5000, the limit of its policy, and

the hospital is liable for the excess." Pursuant to this understanding appellant entered into an indemnity agreement with the Fidelity and Deposit Company in the penal sum of $5000, which recited that the latter company had "at the first instance and request of said obligors, and on the security thereof," executed or agreed to execute a bond in the sum of $9000 on behalf of appellee, which was appealing from a judgment of Clara Appel against it for $7500. The appeal bond was by reference made a part of such agreement. The condition of the indemnity agreement was that appellant should hold and keep harmless the Fidelity and Deposit Company from all loss, damages, costs, charges and expenses, of whatever kind or nature, it might incur or be put to by reason of having executed the appeal bond. In addition to this agreement appellee deposited with the Fidelity and Deposit Company additional collateral security to the amount of $3000, and the appeal bond was executed. Upon the affirmance of the judgment by the Appellate Court the Fidelity and Deposit Company demanded of appellant that it pay the $5000 provided for under the indemnity agreement and secured an assignment of the Appel judgment to it, at the same time demanding of appellee that it pay the balance due on such judgment, amounting to $3642.25, being $2500 excess over $5000 of the original judgment, $1125 interest on the $7500 judgment and $17.25 court costs. Appellant paid to the Fidelity and Deposit Company the $5000 provided for in the indemnity agreement, and shortly thereafter appellee paid to it the balance due on the judgment and the same was released of record. It further appears that while the suit of Mrs. Appel was pending, her husband, George Appel, brought another suit against the appellee for the damages and loss sustained by him on account of the injuries to his wife, and that said suit was subsequently settled by the payment to him of $150,-$75 being paid by appellant and an equal amount by appellee. This payment was made with the understand

ing that it should in no way affect the claim of appellant that it was not liable for any amount whatever in the suit of George Appel.

The appellee contends it is entitled to recover the full amount paid out by it on account of the Appel judgment, and also the $75 paid to the husband of Mrs. Appel in settlement of his suit, while appellant contends it is not liable for any amount in excess of the penalty of its bond, which was $5000,-the face of its policy. The trial court allowed appellee the $75 paid to George Appel in settlement of his suit and an item of $17.25 court costs, and entered judgment in its favor for $92.25. On appeal to the Appellate Court the judgment of the lower court was reversed and judgment entered in that court in favor of the appellee for $698.50, which was subsequently modified on motion and interest allowed on said sum, making the final judgment $856.43, as above stated, composed of an item of $756.25 interest at five per cent on $5000 from July 20, 1909, (the date Mrs. Appel recovered her judgment,) until the date of its payment, July 29, 1912, and an item of $17.25 court costs, less the $75 paid by appellant in settlement of the suit of George Appel, leaving a balance of $698.50, with interest thereon from July 29, 1912, to date of final judgment, at five per cent, or $157.93, making a total of $856.43.

Both parties have assigned error on the record in this court. Appellee contends that the Appellate Court erred in not entering judgment in its favor for the total amount paid out by it in settlement of the Appel judgment and the amount paid to Mrs. Appel's husband in settlement of his claim, while appellant contends the court erred in entering judgment against it for any amount in excess of the penalty of its bond, except the item of $17.25 court costs.

The policy sued on provided that the Maryland Casualty Company (hereafter called the company) agrees to indemnify the Ravenswood Hospital (hereafter called the assured) "for one year against loss from the liability imposed

by law upon the assured for damages on account of bodily injuries or death suffered by any patient or patients under treatment by the assured or at the assured's hospital in consequence of any alleged error or mistake or malpractice occurring in the course of said treatment and during the term of this policy, and the company will defend at its own cost, in the name and on behalf of the assured, any civil suit or suits for the recovery of damages for such alleged error or mistake or malpractice, subject to the following conditions: Condition A.-The company's liability for such damages on account of injuries to or the death of one person is limited to $5000, and, subject to the same limit for each person, the company's total liability for such damages on account of injuries to or the death of any number of persons is limited to $10,000." By other conditions it was. provided that if any claim be made for damages the assured should at once notify the company at its home office, and if any suit were brought for damages the summons or other process should, as soon as served, be forwarded at once to the company at its home office, and "that the company will at its own cost defend such suit in the name and on behalf of the assured unless the company shall elect to pay the assured the indemnity provided for in condition A, or only with the assured's consent the company may compromise any claim at its own cost." It further provided that the assured should not, without the written consent of the company, incur any expense or settle any claim except at its own cost, or interfere in any negotiations for settlement after having consented to a compromise, or interfere in any legal proceedings without the written consent of the company previously had, and that the company should be subrogated to all rights of the assured as respects any such loss, and execute all papers required and co-operate with the company to secure its rights in respect thereto.

Appellee first contends it is entitled to recover the full amount of $3642.25 paid out by it on account of such judg

ment notwithstanding the payment by the appellant to the Fidelity and Deposit Company of $5000, the full amount of the penalty of its bond. The argument advanced in support of this contention is that the payment of the $5000 to the Fidelity and Deposit Company was made under the terms of an independent contract between it and appellant and not paid under the policy, which by its terms made the $5000 payable to appellee. We think this position is not well taken. Under the terms of the policy appellant was liable to appellee for the payment of not to exceed $5000 on account of loss or personal injuries to any one person. Under the terms of the indemnity agreement between it and the Fidelity and Deposit Company appellant agreed to indemnify and keep indemnified the latter company against and from any and all loss, costs, charges, suit damages, counsel fees and expenses, of whatever kind or nature, which it might sustain or incur or be put to by reason or in consequence of having entered into and executed said appeal bond. This indemnity agreement recites that it was entered into at the special instance and request of the obligors, which were appellant and appellee, and the appeal bond executed by appellee was by reference made a part of that agreement. On the whole evidence we think it clear the foregoing agreement between appellant and the Fidelity and Deposit Company was assented and agreed to by appellee and was made as much for its benefit as that of appellant. In pursuance of such indemnity agreement the Fidelity and Deposit Company paid the amount of Mrs. Appel's judgment and secured an assignment of the same to it and demanded the payment of the $5000 provided for in the policy, which appellee stated in its application for the bond appellant was obligated to pay on this judgment. By the terms of this agreement between the appellant and the Fidelity and Deposit Company the former agreed to indemnify the latter to that amount against any liability it might incur on account of executing such appeal bond.