Nationwide Mut. Ins. Co. v. Hayes

• Court: North Carolina Supreme Court
• Writing for the Court: BRANCH
• Citation: Nationwide Mut. Ins. Co. v. Hayes, 276 N.C. 620, 174 S.E.2d 511 (N.C. 1970)
• Decision Date: 12 June 1970
• Docket Number: No. 50,50
• Parties: , 7 UCC Rep.Serv. 1105 NATIONWIDE MUTUAL INSURANCE COMPANY v. Charles Leroy HAYES, Shafer Ewell Gwyn, Shafer Ewell Gwyn, Administrator of theEstate of Bernice O. Gwyn, Glenice Key Lynch, Donald Joe Lynch, Donna CheryleenLynch, and Great American Insurance Company.

Page 511

174 S.E.2d 511

276 N.C. 620, 7 UCC Rep.Serv. 1105

NATIONWIDE MUTUAL INSURANCE COMPANY v. Charles Leroy HAYES, Shafer Ewell Gwyn, Shafer Ewell Gwyn Administrator of theEstate of Bernice O. Gwyn, Glenice Key Lynch, Donald Joe Lynch, Donna CheryleenLynch, and Great American Insurance Company.

No. 50.

Supreme Court of North Carolina.

June 12, 1970.

Folger & Folger, by Fred Folger, Jr., Mt. Airy, for defendant appellants, Shafer Ewell Gwyn, Shafer Ewell Gwyn, Administrator of the Estate of Bernice O. Gwyn, Glenice Key Lynch, Donald Joe Lynch, and Donna Cheryleen Lynch.

Hudson, Petree, Stockton, Stockton & Robinson, by J. Robert Elster, Winston-Salem, for plaintiff Nationwide Mutual Insurance Co., appellant.

Womble, Carlyle, Sandridge & Rice, by Allan R. Gitter, and Jimmy H. Barnhill, Winston-Salem, for Great American Insurance Co., appellee.

BRANCH, Justice.

Plaintiff seeks an adjudication as to which of the two insurance policies afforded coverage for claims against Hayes growing out of the accident which occurred on 27 January 1968. This question will be determined by fixing the date on which Hayes acquired ownership of the Pontiac automobile which he was operating at the time of the accident. If Hayes acquired ownership of the automobile before December 28, the collision occurred more than 30 days from the time he acquired the automobile, and the protection under Gwyn's uninsured motorists insurance would apply. Conversely, if ownership of the automobile was acquired on or after the 28th day of December, 1968, the accident occurred within 30 days of the acquisition and Hayes' non-owner's policy would apply. In order to fix the date of acquisition of ownership of the automobile, we must decide whether in this state a purchaser may acquire ownership of a motor vehicle before purchaser and seller have fully met the requirements of G.S. § 20--72(b).

Prior to 1961, a purchaser of a motor vehicle could acquire title or ownership without delivery of an executed certificate of title by the vendor and without applying for a new certificate to the Department of Motor Vehicles. Southern Auto Finance Co. v. Pittman, 253 N.C. 550, 117 S.E.2d 423. However, in 1961 the General Assembly amended G.S. § 20--72(b) so that it read as follows:

' § 20--72. Transfer by Owner--* * *

'(b) The owner of any vehicle registered under the foregoing provisions of this article, transferring or assigning his title or interest thereto, shall also endorse an assignment and warranty of title, including in such endorsement the name and address of the transferee and the date of transfer, in form approved by the Department upon the reverse side of the certificate of title or execute an assignment and warranty of title of such vehicle and a statement of all liens or encumbrances thereon, which statement shall be verified under oath by the owner, who shall deliver the certificate of title to the purchaser or transferee at the time of delivering the vehicle, except that where deed of trust, mortgage, conditional sale or title retaining contract is obtained from purchaser or transferee in payment of purchase price or otherwise, the lien holder shall forward such certificate of title papers to the Department within twenty days together with necessary fees, or deliver such papers to the purchaser at the time of delivering the vehicle, as he may elect, but in either event the penalty provided in Sec. 20--74 shall apply if application for transfer is not made within twenty days. Any owner selling or transferring his interest to a motor vehicle who willfully fails or refuses to endorse an assignment of title and any person who delivers or accepts a certificate of title endorsed in blank shall be guilty of a misdemeanor. Transfer of ownership in a vehicle by an owner is not effective until the provisions of this section have been complied with.' (Emphasis ours)

The case of International Service Insurance Company v. Iowa National Mutual Insurance Company, 276 N.C. 243, 172 S.E.2d 55, construed this section as amended by the General Assembly of 1961. In that case the vendor agreed to sell an automobile to one John W. Zimmerman, and on 25 May 1963 delivered the automobile to John's home and removed the dealer license plate. The vendor had liability insurance with the defendant insurance company which covered vendor, its officers, agents and 'any person while using an owned automobile * * * provided the actual use of the automobile is by the named insured or with his permission * * *.' On 27 May 1963, James Zimmerman, brother of John Zimmerman, was driving the automobile with John's permission and was involved in an accident. Prior to the date of the accident, plaintiff insurance company had issued to James Zimmerman an assigned risk insurance policy on an automobile belonging to him, which policy was in effect at the time of the accident. On 28 May vendor executed and delivered the certificate of title to John Zimmerman. Civil action was instituted against James Zimmerman for claims arising from the accident. Plaintiff insurance company instituted action under the Declaratory Judgment Act for a declaration of its rights. This Court, holding that the ownership of the automobile remained in the vendor on the date of the accident, stated:

'The Legislature took positive action on 15 June 1961 to include in our statutes this 'pivotal provision' lacking in 1925 by amending G.S. § 20--72(b) and G.S. § 20-75, effective 1 July 1961 to provide: 'Transfer of ownership in a vehicle by an owner (by a dealer) is not effective until the provisions of this subsection have been complied with.'

'We hold therefore that after 1 July 1961, the effective date of the amendments, no title passed to the purchaser of a motor vehicle until (1) the certificate of title has been assigned by the vendor, (2) delivered to the vendee or his agent, and (3) application made for a new certificate of title. This accords with prior decisions in (National Bank of Sanford) Bank v. (Greensboro) Motor Co., supra (264 N.C. 568, 142 S.E.2d 166), and (Community) Credit Co. v. Norwood, supra (257 N.C. 87, 125 S.E.2d 369).'

Had there been no later change in the statutory law, in view of the fact that here delivery had occurred, Insurance Company v. Insurance Company, supra, would unquestionably be controlling precedent for decision in instant case. However, in that case the Court noted that the statute (G.S. § 20--72(b)) had been materially changed by the 1963 amendment. Decision in the cause now before us must be made pursuant to G.S. § 20--72(b), as amended by the General Assembly in 1963, which provides:

'(b) In order to assign or transfer title or interest in any motor vehicle registered under the provisions of this article, the owner shall execute in the presence of a person authorized to administer oaths an assignment and warranty of title on the reverse of the certificate of title in form approved by the Department, including in such assignment the name and address of the transferee; And no title to any * * * motor vehicle shall pass or vest until such assignment is executed and the motor vehicle delivered to the transferee. The provisions of this section shall not apply to any foreclosure or repossession under a chattel mortgage or conditional sales contract or any judicial sale. (Emphasis ours)

'Any person transferring title or interest in a motor vehicle shall deliver the certificate of title duly assigned in accordance with the foregoing provision to the transferee at the time of delivering the vehicle, except that where a security interest is obtained in the motor vehicle from the transferee in payment of the purchase price or otherwise, the transferor shall deliver the certificate of title to the lienholder * * *.'

Appellant Insurance Company contends that the 1963 legislature intended to amend G.S. § 20--72(b) so as to make it clear that its provisions applied only to formal transfer of title as related to lien law and no longer applied to the transfer of ownership of a motor vehicle for the purposes of tort liability and insurance coverage. In support of this position appellant argues that the 1963 amendment resulted from legislative reaction to the decision in Home Indemnity Co. v. Motor Co., 258 N.C. 647, 129 S.E.2d 248, and that the use of the word 'title' in lieu of 'ownership' is indicative of the legislature's intent.

Webster's Third New International Dictionary defines 'title' as follows: '2a: The union of all the elements constituting legal ownership and being divided in common law into possession, right of possession, and right of exclusive possession; the body of facts or events that give rise to the ownership of real or personal property.' It defines 'owner' as: 'One that owns, one that has the legal or rightful title whether the possessor or not.'

In Frank v. Forgotston, 30 Misc. 816, 61 N.Y.S. 1118, it is stated: 'The 'title to certain goods and chattels' means the right to the property, and the right of possession thereof,--in short, the ownership thereof; * * *'

In the case of Skelly Oil Co. v. Kelly, 134 Kan. 176, 5 P.2d 823, the Court said:

'The word title has a variety of meanings. It sometimes connotes the means by which property in lands is established, as in the expression 'chain of title.' It sometimes means 'property' or 'ownership' in the sense of the interest one has in land. A common meaning is complete ownership, in the sense of all the rights, privileges, powers, and immunities an owner may have with respect to land. Am.Law.Inst., Restatement of the Law of Property, draft No. 1; introduction.'

It is noted that in the case of International Service Insurance Co. v. Iowa National Mutual Insurance Co., supra, the Court, construing G.S. § 20--72(b) when it contained the provision, 'Transfer of ownership in a vehicle by an owner is not effective until the provisions of this subsection have been complied with,' stated:

'We hold therefore...