Russell v. Lumbermen's Mutual Casualty Co.

74 S.E.2d 615 (1953) 237 N.C. 220

RUSSELL
v.
LUMBERMEN'S MUT. CAS. CO.

No. 742.

Supreme Court of North Carolina.

February 25, 1953.

Hayes, Hatfield & McClain, Winston-Salem, for plaintiff appellant.

Womble, Carlyle, Martin & Sandridge, Winston-Salem, for defendant appellee.

WINBORNE, Justice.

The question for decision is this: Where an insurance carrier, pursuant to the assigned risk provisions, G.S. § 20-276, of the Motor Vehicle Safety and Responsibility Act, Article 9 of Chapter 20 of the General Statutes of North Carolina, issues to a named person an operator's policy, as defined by, and in accordance with the provisions of said act, G.S. § 20-227(3), does such policy, within the meaning of said act, cover liability of such person for damages arising out of operation of a motor vehicle owned by him when being operated by another, and when he is not present and directing the operation of it? The wording of the act dictates a negative answer.

The General Assembly of North Carolina in enacting the "Motor Vehicle Safety and Responsibility Act", supra, expressly declared that "The purposes of this article" are, among others, "to require financial responsibility of reckless, inefficient and irresponsible operators of motor vehicles, and of operators and owners of motor vehicles involved in accidents", and that "it is the legislative intent that this article be liberally construed so as to effectuate these purposes, as far as legally and practically possible". Thus it appears that financial responsbility is to be required of two classes: (1) "of reckless, inefficient and irresponsible operators of motor vehicles", and (2) "of operators and owners of motor vehicles involved in accidents". The provisions of the Article spell out the requirements for, and the ways and means of providing such financial responsibility.

The Article provides that unless a different meaning is clearly required by the context, "``Operator' means every person other than a chauffeur who is in actual physical control of a motor vehicle", and "``Owner' means a person who holds the legal title to a vehicle." G.S. § 20-226.

Moreover, it is stated that "``Motor vehicle liability policy,' when used herein, means an owner's or an operator's policy of liability insurance certified, as provided by this article, by an insurance carrier licensed to do business in this state, or by an insurance carrier not licensed to do business in this state upon compliance with the provisions of this article, as proof of financial responsibility, or a policy issued under the provisions of the assigned risk plan described by this article and issued by an insurance carrier authorized to transact business in this state, to or for the benefit of the named insured." G.S. § 20-227(1).

Then the article declares that "Every owner's policy shall—(a) Designate by explicit description, or by appropriate reference, all motor vehicles with respect to which coverage is intended to be granted; (b) Insure as insured the person named, and any other person using or responsible for the use of the motor vehicle with the permission, expressed or implied, of the name insured, or any other person in lawful possession; and (c) Insure the insured or other person against loss from any liability imposed by law for damages * * * because of bodily injury to or death of any person, and injury to or destruction of property caused by accident and arising out of the ownership, use or operation * * * within this state * * * with respect to each motor vehicle" within certain liability limitations. G.S. § 20-227(2).

And in the third subsection of G.S. § 20-227, it is declared that "Every operator's policy shall insure the person named therein as insured against loss from liability imposed upon him by law for damages * * because of bodily injury to or death of any person, and injury to or destruction of property, arising out of the use by him of any motor vehicle not owned by him, within the territorial limits and subject to the limits of liability set forth with respect to an owner's policy." G.S. § 20-227(3).

Thus it clearly appears that the article provides for two separate and distinct types of motor vehicle liability policies,— an owner's policy, as proof of owner's financial responsibility on the one hand, and an operator's policy as proof of operator's financial responsibility on the other hand.

And it is declared in G.S. § 20-230 that "* * * any person whose operator's or chauffeur's license has been revoked or suspended under the provisions of the Uniform Drivers' License Act, as amended, shall not be entitled to have said license again issued or reinstated until such person shall have given and thereafter maintains proof of his financial responsibility, as provided in this article. * * *"

It is further provided in G.S. § 20-251 that "Proof of financial responsibility means proof of ability to respond in damages for liability thereafter incurred arising out of the ownership, maintenance, use or operation of a motor vehicle, * * * because of bodily injury to or death of any one person, * * * and * * * because of injury to or destruction of property in any one accident. * * *"

And in G.S. § 20-252 the article sets forth that "(a) Proof of financial responsibility may be made", among others, "(1) by filing with the commissioner the written certificate of any insurance carrier, authorized to do business in this state, certifying that there is in effect a motor vehicle liability policy for the benefit of the person required to furnish proof of financial responsibility", and that "This certificate shall give the effective date of the policy which must be the same date as the effective date of the certificate and, unless the policy is issued to a person who is not the owner of a motor vehicle, must designate by explicit description or by appropriate reference all motor vehicles covered. * * *"

Moreover, the Act also provides, G.S. § 20-276, that "Every person who has been unable to obtain a motor vehicle liability insurance policy through ordinary methods shall have the right to apply to the commissioner of insurance to have his risk assigned to an insurance carrier licensed to write, and writing motor vehicle liability insurance in this state, and the insurance carrier shall issue a motor vehicle liability policy which will meet at least the minimum requirements for establishing financial responsibility, as provided for in this article", and that "In each instance where application is made to the commissioner of insurance to have a risk assigned to an insurance carrier, it shall be deemed that the applicant has been denied the issuance of a liability insurance policy, * * *."

In the light of these provisions of the article, it seems clear (1) that an owner's policy is intended to afford protection in the operation by the owner of a vehicle owned by him as designated and described in the policy; and (2) that an operator's policy only insures the person therein named against loss from liability imposed upon him by law for damages "arising out of the use by him of any motor vehicle not owned by him".

And, applying the provisions of the article to case in hand, it appears that Dallas Garland Carrick, whose operator's license had been suspended, because of two charges of reckless driving, desiring to have said license again issued or reinstated, applied for, and obtained by the assigned risk plan an operator's policy in compliance, and not in conflict with the provisions of the Motor Vehicle Safety and Responsibility Act. Article 9 of Chapter 20 of General Statutes. And at the time of the accident he was not operating, nor was he present in the motor vehicle involved therein. Under the unambiguous terms of the policy issued to him, there is no coverage and no liability on account of the accident.

The authorities relied upon by appellant have been carefully considered, and attention is directed to the case of Howell v. Travelers Indemnity Co., N.C., 74 S.E.2d 610, where the provisions of the Motor Vehicle Safety and Responsibility Act are fully discussed by Ervin, J., and applied to a case where owner's policy was involved.

The judgment below is

Affirmed.