American Nat. Fire Ins. Co. v. Gibbs, 464

• Decision Date: 19 December 1963
• Docket Number: No. 464,464
• Citation: 260 N.C. 681,133 S.E.2d 669
• Court: North Carolina Supreme Court
• Parties: AMERICAN NATIONAL FIRE INSURANCE COMPANY v. John M. GIBBS, trading and doing business as Gibbs-Wood Transport Company, and the Fidelity & Casualty Company of New York.

Page 669

133 S.E.2d 669

260 N.C. 681

AMERICAN NATIONAL FIRE INSURANCE COMPANY v. John M. GIBBS, trading and doing business as Gibbs-Wood Transport Company, and the Fidelity & Casualty Company of New York.

No. 464

Supreme Court of North Carolina.

Dec. 19, 1963

Joyner & Howison, by W. T. Joyner, Jr., Raleigh, for plaintiff appellee.

Vaughan S. Winborne, Raleigh, for defendant appellants Gibbs and Fidelity & Casualty Co. of New York.

RODMAN, Justice.

Defendant Gibbs was, on and prior to 1 April 1951, a motor carrier holding motor carrier certificate C-422, issued by the North Carolina Utilities Commission. He did business under the name of 'Gibbs-Wood Transport Company.'

On 1 April 1951 plaintiff issued to Gibbs-Wood Transport Company its policy of insurance 9567. The policy declares its purpose is 'to indemnify the Assured, for loss or damage from perils hereinafter defined, arising from its legal liability as a carrier and/or bailee under bills of lading and/or shipping receipts issued by the Assured on shipments of lawful goods and/or merchandise consisting principally of General Commodities and Unmanufactured Tobacco. ' The perils against which plaintiff assured Gibbs protection were for loss or damage to shipments caused by (a) fire, (b) perils of the sea, (c) collission, meaning thereby the violent and accidental contact of the conveyance with any other automobile, vehicle, or object, (d) overturning of the transporting conveyance, (e) collapse of bridges and culverts, (f) flood, (g) cyclone and tornado, (h) theft of an entire shipping package.

The policy contains these additional pertinent provisions: 'SUBROGATION--In all cases of loss, the assured shall, at the request of said Company or its agents, assign and subrogate all their rights and claims against others to said Company at time of payment to an amount not exceeding the sum paid by this Company. This Company is not liable for any loss which, without their consent, has been settled or compromised with others, who may be liable therefor.'

'NOTICE AND PROOF OF LOSS--Loss, if any, under this policy to be reported as soon as practicable with full particulars to the Company or its Agent. The assured shall file with the Company or its Agent, a detailed sworn proof of loss within ninety days from date of loss. Failure by the assured either to report said loss or damage or to file such written proofs of loss as above provided, or as required by law, shall invalidate any claim under this policy.'

'SUIT AGAINST COMPANY--It is a condition of this policy that no suit, action or proceeding for the recovery of any claim under this policy shall be maintainable in any court of law or equity unless the same be commenced within twelve (12) months next after the time a cause of action for the loss accrues. Provided, however, that if by the laws of the state within which this policy is issued such limitation is invalid, than (sic) any such claim shall be void unless such action, suit or proceeding be commenced within the shortest limit of time permitted by the laws of such state, to be fixed herein.

'SUIT AGAINST OTHERS BY ASSURED--It is expressly agreed that upon the payment of any loss or advancement or loan of moneys concerning the same, that the assured will at the request and expense of the Company and through such counsel as the Company may designate, make claim upon and institute legal proceedings against any carrier, bailee, or other parties believed to be liable for such loss, and will use all proper and reasonable means to recover the same.'

Attached to the policy issued by plaintiff are two endorsements. These bear the same date as the policy. One is captioned: 'ENDORSEMENT FOR MOTOR COMMON CARRIER POLICIES OF INSURANCE FOR CARGO LIABILITY UNDER SECTION 215 OF THE INTERSTATE COMMERCE ACT. ' The other is entitled: 'ENDORSEMENT FOR MOTOR COMMON CARRIER POLICIES OF INSURANCE FOR CARGO LIABILITY UNDER SECTION 19 OF THE NORTH CAROLINA TRUCK ACT OF 1947. ' The language of the endorsements is substantially identical. Each recites that it is intended to assure compliance with the provisions of a designated statute. The endorsements obligated plaintiff to pay within the limits of liability to any shipper or consignee 'for all loss of or damage to all property belonging to such shipper or consignee, and coming into the possession of the insured in connection with its transportation service, for which loss or damage the insured may be held legally liable. * * * ' The endorsement with respect to the North Carolina statute limited plaintiff's liability for losses occurring 'on the route or in the territory authorized to be served by the insured or elsewhere within the borders of the State of North Carolina. ' The endorsement conforming to the federal statute contains no provision with respect to the area in which liability may be incurred. Each endorsement contains this language: 'The insured agrees to reimburse the Company for any payment made by the Company on account of any loss or damage involving a breach of the terms of the policy and for any payment that the Company would not have been obligated to make under the provisions of the policy, except for the agreement contained in this endorsement.'

Prior to 25 January 1952 defendant Gibbs, doing business as Gibbs-Wood Transport Company, and New Dixie Lines, Inc., filed a petition with the North Carolina Utilities Commission seeking Commission approval for the sale of Gibbs' franchise rights, his motor equipment, and certain real estate owned by him. A hearing was had on this petition on 25 January 1952. The Commission gave its approval to the sale by order dated 29 January 1952. It recites in its order that Gibbs testified: '* * * he was familiar with the provisions of Section 22 of the North Carolina Truck Act wherein a Vendor must satisfy all debts and claims of which such seller has any knowledge or notice and to the effect that the list of debts and claims offered in evidence as Petitioner's Exhibit #2 was a true and accurate statement, such list being claims in the amount of $2,988.95 for Loss or Damage of goods transported or received for transportation, and that Vendor was in a position to furnish bond in double the aggregate of such debts and claims as required by Section 22 of the Act. ' The Commission, in approving the sale, said: 'Upon full consideration of the petition, the contract, and representations made to the Commission and the bond filed with the Commission in amount double the aggregate of all the Loss or Damage Claims of which the Vendor has knowledge, the Commission finds no reason why the proposed sale and transfer should not be approved insofar as the Commission is authorized to do so under the provisions of General Statute 62-107.'

On the date the Commission authorized Gibbs to sell to New Dixie, Fidelity and Gibbs executed the bond to the State of North Carolina in the sum of $6,000, conditioned in this language: 'Whereas John M. Gibbs, the principal herein, applied to the Utilities Commission of the State of North Carolina for permission to sell or transfer to New Dixie Lines, Incorporated, of Richmond, Virginia, the franchise granted it by said Utilities Commission, and

'WHEREAS, There are still certain outstanding claims for loss and damage to property previously transported by the principal.

'NOW THEREFORE, if the said John Gibbs shall pay all sums as specified by Section 22 of the North Carolina Truck Act of 1947, then this obligation shall be null and void; otherwise to be and remain in full force and effect.'

The court found: 'From April 1951 to January 1952, the defendant Gibbs had various claims made against him by shippers or consignees for loss or damage to goods. Beginning in late February 1952, until January 20, 1953,...