North River Ins. Co. v. Gibson, 18236

• Decision Date: 02 July 1964
• Docket Number: No. 18236,18236
• Citation: 137 S.E.2d 264,244 S.C. 393
• Court: South Carolina Supreme Court
• Parties: The NORTH RIVER INSURANCE COMPANY, Appellant, v. Lawrence GIBSON, Carolyn Floyd Long, Administratrix of the Estate of John W. Long, and Charles W. Gambrell, Receiver for Guaranty Insurance Exchange, Respondents.

Page 264

137 S.E.2d 264

244 S.C. 393

The NORTH RIVER INSURANCE COMPANY, Appellant, v. Lawrence GIBSON, Carolyn Floyd Long, Administratrix of the Estate of John W. Long, and Charles W. Gambrell Receiver for Guaranty Insurance Exchange, Respondents.

No. 18236.

Supreme Court of South Carolina.

July 2, 1964.

Bridges & Bridges, Florence, for appellant.

Hyman & Morgan, Florence, William H. Smith, Jr., Columbia, for respondents.

BRAILSFORD, Justice.

Lawrence Gibson sued Carolyn Floyd Long, as administratrix of the estate of John W. Long, for damages arising out of an automobile collision which occurred on September 14, 1961. Defense of the action was undertaken by Guaranty Insurance Exchange, the liability insurance carrier on the Long automobile. During the pendency of the action (on September 4, 1962) a receiver was appointed for Guaranty. The receiver notified the administratrix of the Long estate that he did not have sufficient funds to continue the defense of the action, and counsel who had been employed by Guaranty obtained an order of court authorizing their withdrawal. Thereupon Gibson notified the North River Insurance Company, the liability carrier on his automobile, that he would look to it, under the uninsured motorist endorsement of his own policy, for the payment of any judgment recovered by him in the tort action. North River then brought this action against Gibson and others to have the rights of the parties determined, contending that Gibson had no coverage under the clause relied upon, because the operation of the Long automobile was covered by liability insurance at the time of the collision. The answers filed in the action raised no material issue of fact, and North River moved for judgment on the pleadings. The circuit court held that the uninsured motorist coverage provided by Gibson's policy is applicable, and that, within the statutory limits, North River will be liable for any judgment recovered by Gibson in the tort action. This appeal by North River challenges the correctness of the court's conclusion.

The applicable statute, Section 46-750.14, Code of Laws of 1962, requires that automobile liability insurance policies issued or delivered in this state contain an endorsement obligating the company to pay to the insured, within prescribed limits, such sum as he shall be legally entitled to recover as damages from the owner or operator of an uninsured motor vehicle. At the time of this accident, an 'uninsured motor vehicle' was defined by Section 46-750.11(3) as 'a motor vehicle as to which there is no * * * liability insurance * * *, or there is such insurance, but the insurance company * * * denies coverage thereunder. * * * A motor vehicle shall be deemed to be uninsured if the owner or operator thereof be unknown.'

This definition extends the reach of Section 46-750.14 to certain situations in which the tort feasor is not, literally, the operator of an uninsured motor vehicle at the time of the collision. Under this definition, the issue is not controlled by the existence of insurance on the Long automobile at the time of the accident. The real question is whether Guaranty has effectively denied coverage, within the meaning of the statute.

Appellant insists that the rights of the parties with respect to this insurance coverage must be determined as of the date of the collision and relies heavily upon the decision in Hardin v. American Mutual Fire Ins. Co., 261 N.C. 67, 134 S.E.2d 142. In that case the Supreme Court of North Carolina denied recovery under an uninsured motorist endorsement where the tort feasor was insured by Guaranty Insurance Exchange, the same insolvent involved here, on November 18, 1961, when the collision occurred, and Guaranty continued in business for some ten months thereafter. However, the decision is not persuasive here, because the North Carolina statute did not extend the scope of the term 'uninsured motor vehicle' beyond its ordinary meaning by definition. The critical question under the terms of the North Carolina statute and the policy endorsement was whether the tort feasor was driving an insured automobile at the time of the collision. As has been seen, this appeal turns, instead, on whether there has been a denial of coverage by Guaranty. This question, arising under the terms of our statute, refutes the claim that the rights and liabilities of the parties must be determined as of the time of the collision, because any such...