Faizan v. Grain Dealers Mut. Ins. Co., 377

• Decision Date: 03 February 1961
• Docket Number: No. 377,377
• Citation: 254 N.C. 47,118 S.E.2d 303
• Court: North Carolina Supreme Court
• Parties: Eugene FAIZAN v. GRAIN DEALERS MUTUAL INSURANCE COMPANY.

Page 303

118 S.E.2d 303

254 N.C. 47

Eugene FAIZAN v. GRAIN DEALERS MUTUAL INSURANCE COMPANY.

No. 377

Supreme Court of North Carolina.

Feb. 3, 1961

Daniel K. Edwards and Claude Bittle, Durham, for plaintiff.

Smith, Moore, Smith, Schell & Hunter and Richmond G. Bernhardt, Jr., Greensboro, for defendant.

MOORE, Justice.

There are two questions for decision in this case: (1) Was the coverage period of the policy of liability insurance, issued by defendant to plaintiff, extended by reason of the failure of defendant to comply with the notice of termination provisions of G.S. § 20-279.22? (2) Was the coverage period extended by the terms of the notice of termination mailed by defendant to plaintiff on 9 February 1959?

The answer to these questions requires an examination of pertinent statutes.

The first enactment by the General Assembly relating to Financial responsibility of motorists is contained in Chapter 116, Public Laws of 1931 (G.S. § 20-197 to G.S. § 20-211). This 1931 Act was expressly repealed by the 'Motor Vehicle Safety and Responsibility Act' of 1947. S.L.1947, c. 1006 (G.S. § 20-224 to G.S. § 20-279).

The 1947 Act was revised and superseded by 'The 'Motor Vehicle Safety-Responsibility Act of 1953,'' which, as amended, is still in force. S.L.1953, c. 1300 (G.S. § 20-279.1 to G.S. § 20-279.39). In addition the General Assembly has enacted 'The Vehicle Financial Responsibility Act of 1957. ' S.L.1957, c. 1393 (G.S. § 20-309 to G.S. § 20-319).

A brief analysis of the 1953 and 1957 Acts is necessary to an understanding of the controversy in this case. We consider and discuss here only those phases of these Acts which pertain to the factual situation here presented. As used in this opinion the word 'Commissioner' means Commissioner of Motor Vehicles, and 'Department' means Department of Motor Vehicles.

(a). The 1953 Act.

This Act applies to those persons whose driver's licenses have been suspended by reason of violations of motor vehicle statutes, failure to pay and discharge judgments for damages resulting from ownership or operation of motor vehicles, or failure to prove financial responsibility where damages have been occasioned by the ownership or operation of motor vehicles. It is provided that such persons, where they are otherwise entitled to restoration of driver's licenses, must prove financial responsibility before such licenses may be restored. The financial responsibility must then be maintained for two years. One method of proving and maintaining financial responsibility is to obtain automobile liability insurance as defined by, and in compliance with, G.S. § 20-279.21. Upon delivery of a certificate (Form SR-22) by insurer to the Commissioner, showing that there is insurance coverage in accordance with the Act, driver's license may be issued to the applicant. The Act contains an Assigned Risk Plan under which a person who is required to file proof of financial responsibility and is unable to obtain insurance through ordinary methods, may obtain coverage. G.S. § 20-279.34. The Commissioner assigns the risk to an insurance company licensed to do business in the State, and the company must accept the risk. Such risk, under the rules of the Department, is designated a 'certified assigned risk.' An insurance policy issued in accordance with the requirements of the 1953 Act 'shall not be cancelled or terminated until at least twenty (20) days after a notice of cancellation or termination of the insurance * * * shall be filed in the office of the Commissioner * * *. ' G.S. § 20-279.22. The Commissioner has the duty of administering the 1953 Act and is empowered to make rules and regulations for its administration and enforcement. The Commissioner handles the administration of this Act through the Driver's License Division of the Department.

(b). The 1957 Act.

This Act requires proof of financial responsibility by all motor vehicle owners who apply to the Department for North Carolina registration certificates and plates. Financial responsibility may be shown by procurement of automobile liability insurance. Before a motor vehicle may be registered and registration plates obtained, a certificate of insurance coverage (FS-1) must be delivered by an insurer to the Commissioner. 'The owner of each registered motor vehicle shall maintain proof of financial responsibility continuously throughout the period of registration * *. When insurance with respect to any motor vehicle is terminated by cancellation or failure to renew, the owner shall forthwith surrender the registration certificate and plates of the vehicle to the Department * * *. ' The provisions of the 1953 Act 'which pertain to the method of giving and maintaining proof of financial responsibility and which govern and define 'motor vehicle liability policy' and assigned risk plans shall apply to filing and maintaining proof of financial responsibility required by' the 1957 Act. G.S. § 20-314. Under the 1957 Act a person, though his driver's license has not been suspended, may, if he is unable to obtain liability insurance through regular channels, apply for and procure such insurance through the Assigned Risk Plan. In such case the risk is denominated a 'non-certified assigned risk.' No insurance furnished under the provisions of the 1957 Act 'shall be terminated by cancellation or failure to renew by the insurer until at least fifteen (15) days after mailing a notice of termination to the named insured * * *. Time of the effective date and hour of termination stated in the notice shall become the end of the policy period. * * * Upon the termination of insurance by cancellation or failure to renew, notice of such cancellation or termination shall be mailed by the insurer to the Commissioner * * * not later than fifteen (15) days following the effective date of such cancellation or other termination. ' G.S. § 20-310. The Commissioner has the duty to administer the Act and is authorized to make rules and regulations for the administration and enforcement thereof. The Commissioner administers this Act through the Registration Division of the Department.

The 1953 Act is not in any respect repealed or modified by the 1957 Act. Both Acts are in full force and effect. Portions of the 1953 Act are incorporated in the 1957 Act by reference. Both Acts relate to the same subject--financial responsibility of motorists. 'Statutes in pari materia are to be construed together, and it is a general rule that the courts must harmonize such statutes, if possible, and give effect to each, that is, all applicable laws on the same subject matter should be construed together so as to produce a harmonious body of legislation, if possible. ' Town of Blowing Rock v. Gregorie, 243 N.C. 364, 371, 90 S.E.2d 898, 904; Justice v. Scheidt, 252 N.C. 361, 363, 113 S.E.2d 709.

The 1953 Act applies to a limited class of motorists--those whose driver's licenses have been suspended. These motorists must show financial responsibility as a condition precedent to restoration of their driver's licenses. The 1957 Act applies to an unlimited class--all motor vehicle owners. Before obtaining periodic registration certificates and plates for vehicles, they must prove financial responsibility. One Act relates to restoration of driver's license, the other to motor vehicle registration. Insofar as possible the two Acts are administered by the Commissioner separately--the 1953 Act through the Driver's License Division, the 1957 Act through the Registration Division.

The Assigned Risk Plan handles applications of persons from either or both classes where the required insurance cannot be obtained through regular channels. But the assigned risks are handled differently for the two classes of persons. Persons affected by the 1953 Act must obtain SR-22 certificates and the risks are designated 'certified assigned risks.' Under the 1957 Act motor vehicle owners using the Assigned Risk Plan must furnish FS-1 certificates and the risks are denominated 'non-certified assigned risks.'

Plaintiff in the case at bar is not of the class to which the 1953 Act applies. His driver's license was not suspended. His insurer furnished an FS-1 certificate and his assigned insurance policy was designated 'non-certified assigned risk.' The Department issued him registration certificate and plate for his automobile. The procedure was in accordance with the 1957 Act, and properly so.

The first question for decision is whether or not defendant insurer was required to give the notice prescribed by G.S. § 20-279.22 before the period of coverage of plaintiff's policy of insurance could be terminated. This section (part of the 1953 Act) provides that when an insurer has certified a policy under G.S. § 20-279.19 or G.S. § 20-279.20 it may not be terminated until at least twenty days after notice of termination has been filed in the office of the Commissioner.

Plaintiff contends that G.S. § 20-314 incorporated G.S. § 20-279.22 in the 1957 Act. G.S. § 20-314 stipulates that the provisions of the 1953 Act 'which pertain to the method of giving and maintaining proof of financial responsibility and which govern and define 'motor vehicle liability policy' and assigned risk plans shall apply to filing and maintaining proof of financial responsibility required' by the 1957 Act. (Emphasis added.) In other words the insurance policies and insurers' certificates required by both Acts are defined by the 1953 Act.

Plaintiff argues that the notice required by G.S. § 20-279.22 is a reasonable and necessary adjunct to the 1957 Act, that this section is applicable to both insurer and insured and would prevent an insured from cancelling his policy before proper notice had been given, and that this section does not conflict with the notice provisions of the 1957 Act, and would tend to assure continuous coverage.

It is true that G.S. § 20-279.22 pertains generally to 'maintaining proof of financial...