Howell v. Travelers Indem. Co.

• Decision Date: 25 February 1953
• Docket Number: No. 521,521
• Citation: 74 S.E.2d 610,237 N.C. 227
• Parties: HOWELL, v. TRAVELERS INDEMNITY CO.
• Court: North Carolina Supreme Court

Page 610

74 S.E.2d 610

237 N.C. 227

HOWELL, v. TRAVELERS INDEMNITY CO.

No. 521

Supreme Court of North Carolina.

Feb. 25, 1953

Basil L. Whitener and Ernest R. Warren, Gastonia, for plaintiff, appellant.

L. B. Hollowell, Gastonia, for defendant, appellee.

ERVIN, Justice.

The appeal presents for decision the solitary question whether the plaintiff's evidence suffices to show that her loss is covered by the policy in suit.

Where a statute is applicable to a policy of insurance, the provisions of the statute enter into and form a part of the policy to the same extent as if they were actually written in it. In case a provision of the policy conflicts with a provision of the statute favorable to the insured, the provision of the statute controls. As a consequence, an insurance company can not avoid liability on a policy of insurance issued pursuant to a statute by omitting from the policy provisions favorable to the insured, which are required by the statute. Eckard v. Metropolitan Life Insurance Co., 210 N.C. 130, 185 S.E. 671; Fuller v. Lockhart, 209 N.C. 61, 182 S.E. 733; Hood, Com'r of Banks, ex rel. Bank of Summerfield v. Simpson, 206 N.C. 748, 175 S.E. 193; Headen v. Metropolitan Life Insurance Company, 206 N.C. 270, 173 S.E. 349.

The reverse of these propositions is equally true. An insurance company can not be held liable upon a policy of insurance beyond the limits of coverage specified in it, if the limits of coverage are consistent with the statute under which the policy is issued. Keystone Mutual Casualty Co. of Pittsburgh, Pa., v. Hinds, 180 Md. 676, 26 A.2d 761.

Motor vehicle insurance carriers issue two general 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.

The trial judge construed the policy in suit to be an owner's motor vehicle liability policy, insuring Lipscomb against legal liability for injuries to others arising out of the ownership, use or operation of a particular motor vehicle explicitly described in it, i. e., Lipscomb's 1933 Ford. He adjudged the plaintiff's evidence insufficient to carry the case to the jury because it showed that the automobile involved in the accident resulting in the plaintiff's bodily injury and property damage was not the automobile described by the policy.

Counsel for the plaintiff insist, however, that the trial judge erred in nonsuiting the case even if he read aright the language of the policy in suit. They advance these arguments to sustain this position: That the policy in question was issued pursuant to the Motor Vehicle Safety and Financial Responsibility Act, which stipulates that its purpose is 'to require financial responsibility of reckless, inefficient and irresponsible operators of motor vehicles * * * involved in accidents' and that its provisions are to be liberally construed so as to effectuate this purpose 'as far as legally and practically possible. ' G.S. § 20-225. That the Motor Vehicle Safety and Financial Responsibility Act at least implies as something indispensable to the effectuation of its purpose 'to require financial responsibility of reckless, inefficient and irresponsible operators of motor vehicles * * * involved in accidents' the broad legal requirement that every policy subject to its provisions must insure the insured against legal liability for bodily injury or property damage to another arising out of the actual operation by the insured of any motor vehicle, no matter who may own the vehicle and no matter what reason may occasion its use by the insured. That the general rule of the law of insurance set out in the second paragraph of this opinion and the specific provision of subdivision (4) (a) of G.S. § 20-227 incorporated this broad legal requirement in the policy which the defendant issued to Lipscomb. That as the consequence of these considerations, the plaintiff is entitled to subject the insurance afforded by the policy in question to the satisfaction of the damages caused by Lipscomb's negligent operation of the 1937 Ford car, regardless of who may have owned the car or what reason may have prompted its use by Lipscomb.

It thus appears that the decision in this case must turn on whether the Motor Vehicle Safety and Financial Responsibility Act requires an insurance policy subject to its provisions to afford the insured protection against legal liability for bodily injury or property damage to another arising out of the actual operation by the insured of any motor vehicle, irrespective of who owns it or what reason occasions its use by the insured.

The Motor Vehicle Safety and Financial Responsibility Act does not make this requirement in express terms. For this reason, recourse must be had to the pertinent provisions of the act to ascertain whether the requirement can be properly read into...