Harrelson v. State Farm Mut. Auto. Ins. Co., 459

• Decision Date: 02 February 1968
• Docket Number: No. 459,459
• Citation: 272 N.C. 603,158 S.E.2d 812
• Court: North Carolina Supreme Court
• Parties: William Gray HARRELSON, By His Next Friend, Clyde C. Randolph, Jr. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY. John W. HARRELSON v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

Page 812

158 S.E.2d 812

272 N.C. 603

William Gray HARRELSON, By His Next Friend, Clyde C. Randolph, Jr. v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

John W. HARRELSON v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY.

No. 459.

Supreme Court of North Carolina.

Feb. 2, 1968.

Deal, Hutchins & Minor by Richard Tyndall, Edwin T. Pullen III and Roy L. Deal, Winston-Salem, for defendant appellant.

Spry, Hamrick & Doughton, by Bobby L. Newton and Edmund I. Adams, Winston-Salem, for plaintiff appellees.

LAKE, Justice.

The sole question upon this appeal is whether the policy of liability insurance issued by the defendant to Turner upon his Ford automobile was cancelled prior to the accident in which the minor plaintiff was injured.

While it is not expressly so found as a fact by the trial judge, it is established by the evidence of both parties, and not in dispute, that the policy was issued as an assigned risk policy and that Turner's driver's license had not been suspended. Consequently, at the time of issuance, this policy was what is known as a non-certified assigned risk policy, issued pursuant to and subject to the provisions of the Financial Responsibility Act of 1957. G.S. § 20--309 et seq.

The court below concluded that (1) the defendant did not cancel the policy prior to the accident, and (2) the defendant did not have the right to cancel such policy. If either of these conclusions is supported by the court's findings of fact, which findings, in turn, are supported by the evidence, the judgment for the plaintiff must be affirmed.

There is no evidence whatever in the record of any handbook or rules or regulations issued or promulgated by the Commissioner of Insurance or by the Commissioner of Motor Vehicles. The record shows that the plaintiff attempted to examine their witness Floyd with reference to some handbook, but the defendant's objection to such testimony was sustained by the court and there is nothing to indicate that any handbook or rule or regulation of either Commissioner was introduced or offered in evidence. There being no evidence to support the trial court's finding of fact with reference to a rule of the Commissioner of Insurance, the defendant's exception to this finding, and to the finding that the defendant failed to comply with such rule, must be sustained and these findings must be disregarded. See: Little v. Stevens, 267 N.C. 328, 148 S.E.2d 201; Wachovia Bank & Trust Co. v. Miller, 243 N.C. 1, 89 S.E.2d 765.

Obviously, the statement in the trial court's finding of fact that the notice of cancellation issued by the defendant was directed to and received by the Commissioner of Insurance was a mere Lapsus linguae. Clearly, the court intended to find that such notice was directed to and received by the Commissioner of Motor Vehicles, all of the evidence so indicating and there being no contrary contention or suggestion. It is equally apparent that in the findings that the defendant issued the notice of cancellation on 7 July and that the defendant mailed such notice to Turner, the court intended to find that such mailing occurred on 7 July 1964, all of the evidence so indicating and there being no contention or suggestion of a mailing of the notice of a different date. We so construe these findings of fact. Upon appeal we may look to the evidence in the record to interpret the findings of fact made by the trial judge. See Wynne v. Allen, 245 N.C. 421, 426, 96 S.E.2d 422.

The findings of fact by the trial court, except as above noted, are supported by evidence in the record. These findings are, therefore, conclusive. Jamestown Mutual Insurance Co. v. Insurance Co., 266 N.C. 430, 146 S.E.2d 410; Stewart v. Rogers, 260 N.C. 475, 133 S.E.2d 155; Goldsboro v. R.R., 246 N.C. 101, 97 S.E.2d 486; Wynne v. Allen, supra. The trial court's conclusions drawn from these findings of fact are, however, subject to review. We turn first to the trial court's conclusion that the defendant had no right to cancel the policy.

Although there was no finding of fact concerning it, it is undisputed that the policy in question contained, with reference to the company's right to cancel, the provision quoted above in the statement of facts. Obviously, this clause in the contract does not purport to limit the company's right to cancel to any particular factual situation. The clause, on its face, gives the company the right to cancel for any reason satisfactory to it by following the procedure prescribed in the clause. An insurance policy is a contract between the parties thereto and its provisions will givern their rights thereunder unless those provisions are in conflict with the law of the State. Allstate Insurance Co. v. Shelby Mutual Insurance Co., 269 N.C. 341, 152 S.E.2d 436; Muncie v. Insurance Co., 253 N.C. 74, 116 S.E.2d 474. On the other hand, a statutory requirement or limitation, which is applicable to a policy of insurance, is to be read into the policy as if written therein and controls a contrary provision actually written into the policy. Crisp v. State Farm Mutual Auto Insurance Co., 256 N.C. 408, 124 S.E.2d 149; Swain v. Nationwide Mutual Insurance Co., 253 N.C. 120, 116 S.E.2d 482; Howell v. Indemnity Co., 237 N.C. 227, 74 S.E.2d 610.

The policy in question having been issued pursuant to the Assigned Risk Plan and for the purpose of fulfilling the requirement of the Financial Responsibility Act of 1957, the provisions of that act, relative to the cancellation of such policies, must be read into this policy and construed liberally so as to effectuate the purpose of the act. Jones v. State Farm Mutual Insurance Co., 270 N.C. 454, 155 S.E.2d 118; Allstate Insurance Co. v. Hale, 270 N.C. 195, 154 S.E.2d 79. The purpose of that act is to assure the protection of liability insurance, or other type of established financial responsibility, up to the minimum amount specified in the act, to persons injured by the negligent operation of a motor vehicle upon the highways of this State. Jones v. State Farm Mutual Insurance Co., supra; Allstate Insurance Co. v. Hale, supra; Swain v. Nationwide Mutual Insurance Co., supra. To that end, the act makes it mandatory that the owner of a registered motor vehicle maintain proof of financial responsibility throughout such registration of the vehicle. G.S. § 20--309. This may be done by the owner's obtaining, and maintaining in effect, a policy of automobile liability insurance. G.S. § 20--314; G.S. § 20--279.19. To enable an owner so to comply with this requirement of the act, even though he is unable to procure such insurance in the usual way, the act provides that the provisions of the Financial Responsibility Act of 1953, with reference to the Assigned Risk Plan, 'shall apply to filing and maintaining proof of financial responsibility required by' the Act of 1957. G.S. § 20--314.

Insurance supplied by a policy issued under the Assigned Risk Plan is compulsory both as to the insured owner and as to the insurance carrier. Allstate Insurance Co. v. Hale, supra. The right of the carrier to cancel such a policy is subject to the provisions of the 1957 Act, as so implemented by the provisions of the 1953 Act incorporated by reference therein. The two acts are to be construed together so as to harmonize their provisions and to effectuate the purpose of the Legislature. Faizan v. Grain Dealers Mutual Insurance Co., 254 N.C. 47, 118 S.E.2d 303. Their provisions, liberally construed to effectuate the legislative policy, control any provision written into the policy which otherwise would give the company a greater right to cancel than is provided by the statute.

The 1957 Act, in G.S. § 20--309(e) and in G.S. § 20--310(a), prescribes the procedure pursuant to which a policy issued for the purpose of complying with the requirements of that act may be cancelled by the insurance carrier having the right to cancel. In order to cancel such policy, the carrier must comply with these procedural requirements of the statute or the attempt at cancellation fails. Allstate Insurance Co. v....