State Farm Mut. Auto. Ins. Co. v. Shaffer

• Decision Date: 08 April 1959
• Docket Number: No. 241,241
• Citation: 108 S.E.2d 49,250 N.C. 45
• Parties: STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Will SHAFFER, Ralph Neal Shaffer, John Franklin Mullis, Joe Neeley Orr, Lois Orr Porter, Administratrix of the Estate of Ranson Wayne Porter, Deceased, and Nationwide Mutual Insurance Company.
• Court: North Carolina Supreme Court

Page 49

108 S.E.2d 49

250 N.C. 45

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY v. Will SHAFFER, Ralph Neal Shaffer, John Franklin Mullis, Joe Neeley Orr, Lois Orr Porter, Administratrix of the Estate of Ranson Wayne Porter, Deceased and Nationwide Mutual Insurance Company.

No. 241

Supreme Court of North Carolina.

April 8, 1959

Clyde L. Stancil, Raleigh, Kennedy, Covington, Lobdell & Hickman, Charlotte, for defendant Nationwide Mutual Ins. Co., appellant.

Winfred R. Ervin, Charlotte, for defendants John Franklin Mullis, Joe Neeley Orr, and Lois Orr Porter, Administratrix of Estate of Ranson Wayne Porter, Deceased, appellees.

Carpenter & Webb, Charlotte, for plaintiff, appellee.

MOORE, Justice.

The question for determination here is: Was there coverage under either of the policies with respect to the accident of 11 August, 1957?

The appellant, Nationwide, requested the Judge to find in substance as follows:

That the 1954 Ford acquired 27 July, 1957, replaced the State Farm Ford, which up to the time of the replacement had been principally used by Ralph Neal Shaffer; that the 1954 Ford after its acquisition was used in the same manner and for the same purposes by Ralph Neal Shaffer as he had previously used the State Farm Ford; that the 1954 Ford did not replace the Nationwide Ford, which was principally used by Will Shaffer prior to the acquisition of the 1954 Ford; that the 1954 Ford was not used by Will Shaffer in the same manner he had used the Nationwide Ford, but that after the acquisition of the 1954 Ford the State Farm Ford was used by Will Shaffer; that Ralph Neal Shaffer was the owner of the 1954 Ford.

With respect to these matters the court found as a fact that Will Shaffer was the sole owner of the 1954 Ford and owner of all the vehicles described from time to time in the policies of State Farm and Nationwide; that after February, 1956, Will Shaffer did not own more than two automobiles at any one time; that the 1954 Ford and all the vehicles named in the policies from time to time were under the personal control of Will Shaffer as to their manner, method and time of use, and such use of said vehicles as was made by Ralph Neal Shaffer was with the permission of Will Shaffer, including the use of the 1954 Ford at the time of the accident; and that the 1954 Ford did not replace the State Farm Ford but did replace the Nationwide Ford.

The evidence was sharply conflicting and there were glaring contradictions in the pleadings, statements and testimony of Will Shaffer and Ralph Neal Shaffer. There was competent evidence to support the request of Nationwide for findings and competent evidence to support the court's findings of fact. 'Where facts are found by the court, if supported by competent evidence, such findings are as conclusive as the verdict of a jury. ' City of Goldsboro v. Atlantic Coast Line R. Co., 246 N.C. 101, 107, 97 S.E.2d 486, 491, and cases there cited.

Notwithstanding the findings of fact, it may be conceded that Ralph Neal Shaffer as a rule used the better of the two cars owned by his father--the Nationwide car prior to the purchase of the 1954 Ford, and the 1954 Ford after its acquisition. On occasions the Shaffers used the cars interchangeably. This Court is not a fact-finding body, but the foregoing facts are assumed to be true so far as this opinion is concerned.

The policy by Nationwide provides coverage for a 'newly acquired automobile.' A newly acquired automobile is defined by the policy to mean 'an automobile ownership of which is acquired by the named insured * * * if it replaces an automobile owned by (named insured) and covered by this policy * * *. ' (Emphasis and parentheses ours.)

The policy issued by State Farm provides coverage for an 'automobile * * * ownership of * * * which is acquired by the named insured during the policy period, provided it replaces a described automobile * * *. ' (Emphasis ours.)

In this case the question of notice of replacement does not arise.

The appellant insists that the question as to which automobile, if either, was replaced by the 1954 Ford is one of fact to be gathered from the intent and acts of the insured and his son. We hold that it is a mixed question of law and fact. The trial court has found the facts and his findings are binding on this Court. Bizzell v. Bizzell, 247 N.C. 590, 101 S.E.2d 668. The interpretation of the policy provisions, in the light of the facts found, is a matter of law for the court, and in construing the contract its unambiguous terms are to be taken in their plain, ordinary and popular sense. Stanback v. Winston Mut. Life Insurance Co., 220 N.C. 494, 17 S.E.2d 666.

The exact question involved here has not previously been decided by this Court. It will be observed that both policies of insurance in this case provide that a replacement automobile must be acquired and replace an automobile owned by the insured and covered by the policy.

In a Kentucky case the insurer issued a liability policy on a Studebaker. At that time the insured owned a Ford which was not covered by the policy. The Ford had no motor in it at the time. Later the insured put a new motor in the Ford, after which time the Studebaker quit running and was never operated again. Insured then used the Ford and had an accident in which three persons were injured. He immediately notified the insurer of the accident. The Court held that there was no coverage on the Ford. While there was a question of notice of replacement involved, the Court said: 'In this instance appellant's Ford car was not 'newly acquired' but was owned by him long before he took out insurance on the Studebaker. * * * (C)ertainly it was within the contemplation of the parties that the replacement must be a car the insured would acquire in the future and not one he owned at the time the policy was issued to him. ' Brown v. State Farm Mut. Auto. Insurance Co., Ky.1957, 306 S.W.2d 836, 837.

In Commercial Standard Insurance Co. v. Central Produce Co., D.C.M.D.Tenn. 1940, 42 F.Supp. 31, 33, insured purchased a truck and obtained liability coverage at the time of the purchase. The truck was excluded from a renewal policy because it was not in operating condition. It was placed back in service as a replacement for an insured truck withdrawn from service, and was involved in an accident in which four persons were killed and one injured. The Court held that there was no coverage. The Court said:...