Graham v. Iowa National Mutual Insurance , 240 N.C. 458 ( 1954 )

82 S.E.2d 381 (1954) 240 N.C. 458

GRAHAM
v.
IOWA NAT. MUT. INS. CO.

No. 745.

Supreme Court of North Carolina.

June 4, 1954.

Edwards, Sanders & Everett, Durham, for plaintiff.

Jordan & Wright, Perry C. Henson, Greensboro, for defendant.

ERVIN, Justice.

The plaintiff advances this argument to support his contention that the liability policy obligates the defendant to satisfy his judgment against Davis:

1. The Motor Vehicle Safety and Financial Responsibility Act of 1947 required an insurance carrier issuing an owner's policy of liability insurance upon an assigned risk to include within the coverage of the policy all motor vehicles owned by the insured and registered in his name.

2. When it issued the liability policy upon the 1940 Buick car only, the defendant issued an owner's policy of liability insurance upon an assigned risk. This being so, the statutory requirement entered into and formed a part of the liability policy to the same extent as if it were actually written in it, and extended the coverage of the liability policy to the 1947 Ford truck, which was owned by Davis and registered in his name.

3. Since the liability policy covered the 1947 Ford truck, it obligates the defendant to satisfy the judgment based on the negligent operation of that vehicle by Davis.

This argument lacks validity because its major premise is untenable.

The Motor Vehicle Safety and Financial Responsibility Act of 1947 was analyzed in detail in Howell v. Travelers Indemnity Co., 237 N.C. 227, 74 S.E.2d 610, and Russell v. Lumbermen's Mutual Casualty Co., 237 N.C. 220, 74 S.E.2d 615. It was pointed out in the Howell Case that the Act fell short of its avowed purpose "``to require financial responsibility of reckless, inefficient and irresponsible operators of motor vehicles * * * involved in accidents'". [237 N.C. 227, 74 S.E.2d 614.] Legislative recognition of the accuracy of that observation may have prompted the enactment of the Motor Vehicle Safety and Financial Responsibility Act of 1953.

The Motor Vehicle Safety and Financial Responsibility Act of 1947 did not require an insurance carrier issuing an owner's policy of liability insurance upon an assumed risk to ferret out and include within the coverage of the policy all motor vehicles owned by the insured and registered in his name, irrespective of the omission of some of them from the insured's application for the insurance, and irrespective of the insured's ability or willingness to pay premiums upon all of them.

The Act specified that it was not obligatory for an insurance carrier to grant any insurance whatever upon a risk assigned to it until it had received "payment of a proper premium". G.S. § 20-276. It put upon the insured responsibility for determining which of his motor vehicles should be covered by the owner's policy of liability insurance by providing for the cancelation of the registration of the motor vehicles not so covered. G.S. § 20-252(b). It declared by inescapable implication that an owner's policy of liability insurance issued under the provisions of the assigned risk plan should restrict its coverage to the motor vehicle or vehicles designated in the insured's application to the assigning agency to have his risk assigned to an appropriate carrier, and the assigning agency's directive assigning the insured's risk to the issuing carrier. G.S. § 20-276.

When all is said, the Act simply imposed upon an insurance carrier issuing an owner's policy of liability insurance upon an assigned risk this two-fold obligation: First, to issue to the insured a policy meeting the requirements of subdivision (2) of G.S. § 20-227, and designating "by explicit description, or by appropriate reference, all motor vehicles with respect to which coverage is intended to be granted;" and, second, to issue a written certificate giving the effective date of the policy and designating "by explicit description or by appropriate reference all motor vehicles covered." G.S. § 20-252(a).

The Act required the written certificate of the issuing carrier to be filed with the Department of Motor Vehicles so that the Department could reissue an operator's license to the insured and cancel the registration of such of the insured's motor vehicles as were not covered by the policy of liability insurance. G.S. § 20-252.

What has been said makes it evident that the defendant performed its obligations under the Motor Vehicle Safety and Financial Responsibility Act of 1947 when it issued to Davis an owner's policy of liability insurance covering the 1940 Buick car only. The validity of this conclusion is not impaired in any way by the failure of the Department of Motor Vehicles to cancel the registration of the 1947 Ford truck.

For the reasons given, the judgment is

Affirmed.