Woodruff v. State Farm Mutual Automobile Insurance , 260 N.C. 723 ( 1963 )

133 S.E.2d 704 (1963) 260 N.C. 723

James Lester WOODRUFF
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

No. 391.

Supreme Court of North Carolina.

December 19, 1963.

Elledge & Mast, Clyde C. Randolph, Jr., Winston-Salem, for plaintiff appellant.

Deal, Hutchins & Minor, Winston-Salem, for defendant appellee.

DENNY, Chief Justice.

The appellant's sole assignment of error is to the ruling of the court below dismissing plaintiff's action for the reason that the complaint fails to state that the insured "gave notice of the accident and failed to give notice of the suit against him, which accident and suit constitutes the basis of plaintiff's claim against the defendant herein," and the entry of judgment in accord with said ruling.

The provisions of our Motor Vehicle Safety and Financial Responsibility Act, Article 9A, Chapter 20, of our General Statutes, provide for motor vehicle insurance carriers to issue two types of motor vehicle liability policies. "One is an owner's policy, which insures the holder against legal liability for injuries to others arising out of the ownership, use or operation of a motor vehicle owned by him; and the other is an operator's policy, which insures the holder against legal liability for injuries to others arising out of the use by him of a motor vehicle not owned by him." Howell v. Indemnity Co., 237 N.C. 227, 74 S.E.2d 610; G.S. § 20-279.21 (a) (b) and (c).

The policy involved herein is an owner's policy. It was issued to Holbrook pursuant to the assigned risk statute of North Carolina, in which the defendant insurer obligated itself to pay any liability Holbrook should become liable to pay by reason of the operation of the Ford automobile described in the policy, up to the limit of $5,000. G.S. § 20-279.21 (b) (2).

No violation of the provisions of an owner's policy as an assigned risk, will void the policy where the liability thereunder has been incurred by reason of the insured's operation of the automobile described in the policy. G.S. § 20-279.21 (f) (1); Swain v. Nationwide Mutual Insurance Co., 253 N.C. 120, 116 S.E.2d 482.

G.S. § 20-279.21 (g) reads as follows: "Any policy which grants the coverage required for a motor vehicle liability policy may also grant any lawful coverage in excess of or in addition to the coverage specified for a motor vehicle liability policy and such excess or additional coverage shall not be subject to the provisions of this article. With respect to a policy which grants such excess or additional coverage the term ``motor vehicle liability policy' shall apply only to that part of the coverage which is required by this section."

Our Financial Responsibility Act does not require an owner's assigned risk policy to cover any liability except that growing out of the operation of the motor vehicle described in the policy. Consequently, the coverage in the policy issued by the defendant to Holbrook with respect to the use of other automobiles, was in addition to the coverage required by our Motor Vehicle Safety and Financial Responsibility Act. Therefore, with respect to such coverage, the policy makes the giving of notice a condition precedent to insurer's liability. "Prior and subsequent to the decision in the MacClure case (229 N.C. 305, 49 S.E.2d 742) this Court has consistently held that plaintiff has the burden of showing that he has complied with those conditions precedent to his right to maintain his action." Muncie v. Travelers Insurance Co., 253 N.C. 74, 116 S.E.2d 474.

The plaintiff in this action has no greater right against the defendant insurer than Holbrook, the insured, would have. Any failure of Holbrook to give notice defeating his right to indemnity under the provision with respect to the use of other automobiles, would likewise prevent plaintiff from asserting any rights under this provision of the policy. Muncie v. Travelers Insurance Co., supra.

We hold that the motion interposed and allowed in the court below, was tantamount to a demurrer on the ground that the complaint did not state a cause of action against the defendant. Even so, under our decisions, we hold that it was error to dismiss the action. The plaintiff is entitled to amend his complaint, if so advised. Leggett v. Smith-Douglass Co., 257 N.C. 646, 127 S.E.2d 222, and cited cases.

Except as modified herein, the judgment entered below is affirmed.

Modified and affirmed.