{ "id": 8566556, "name": "NATIONWIDE MUTUAL INSURANCE COMPANY and TUX BOWERS MOTOR COMPANY, INC. v. FIREMAN'S FUND INSURANCE COMPANY; TERRY EUGENE CARSON; DOWNIE WOODROW CARSON; CHARLES P. MICHAELS, ADMINISTRATOR OF THE ESTATE OF GERALD D. MICHAELS; BIS RAY LEWIS; BARBARA ANN LEWIS; HOMER EPLEY; LENDY JAMES EPLEY; OLIVER DODSON McKINNEY; CLARA McKINNEY; ST. PAUL FIRE & MARINE INSURANCE COMPANY; MARYLAND CASUALTY COMPANY; and NATIONAL GRANGE MUTUAL INSURANCE COMPANY", "name_abbreviation": "Nationwide Mutual Insurance v. Fireman's Fund Insurance", "decision_date": "1971-07-30", "docket_number": "No. 44", "first_page": "240", "last_page": "253", "citations": [ { "type": "official", "cite": "279 N.C. 240" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "175 S.E. 2d 741", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": -1 }, { "cite": "9 N.C. App. 193", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8548939 ], "opinion_index": -1, "case_paths": [ "/nc-app/9/0193-01" ] }, { "cite": "258 N.C. 211", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560132 ], "opinion_index": -1, "case_paths": [ "/nc/258/0211-01" ] }, { "cite": "238 F. 2d 750", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 422874 ], "year": 1956, "opinion_index": 0, "case_paths": [ "/f2d/238/0750-01" ] }, { "cite": "226 F. 2d 498", "category": "reporters:federal", "reporter": "F.2d", "case_ids": [ 348181, 348222 ], "year": 1955, "opinion_index": 0, "case_paths": [ "/f2d/226/0498-01", "/f2d/226/0498-02" ] }, { "cite": "183 A. 2d 223", "category": "reporters:state_regional", "reporter": "A.2d", "case_ids": [ 4629321, 4628959 ], "pin_cites": [ { "page": "226" } ], "opinion_index": 0, "case_paths": [ "/vt/123/0120-01", "/vt/123/0106-01" ] }, { "cite": "123 Vt. 120", "category": "reporters:state", "reporter": "Vt.", "case_ids": [ 4629321 ], "pin_cites": [ { "page": "124" } ], "opinion_index": 0, "case_paths": [ "/vt/123/0120-01" ] }, { "cite": "165 N.Y.S. 2d 598", "category": "reporters:state", "reporter": "N.Y.S.2d", "opinion_index": 0 }, { "cite": "213 A. 2d 692", "category": "reporters:state_regional", "reporter": "A.2d", "opinion_index": 0 }, { "cite": "106 N.H. 412", "category": "reporters:state", "reporter": "N.H.", "case_ids": [ 4461505 ], "opinion_index": 0, "case_paths": [ "/nh/106/0412-01" ] }, { "cite": "174 S.E. 2d 251", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "121 Ga. App. 323", "category": "reporters:state", "reporter": "Ga. App.", "case_ids": [ 723435 ], "opinion_index": 0, "case_paths": [ "/ga-app/121/0323-01" ] }, { "cite": "108 S.E. 2d 22", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "250 N.C. 60", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8619545 ], "opinion_index": 0, "case_paths": [ "/nc/250/0060-01" ] }, { "cite": "172 So. 2d 912", "category": "reporters:state_regional", "reporter": "So. 2d", "case_ids": [ 9874836 ], "year": 1965, "pin_cites": [ { "page": "913" } ], "opinion_index": 0, "case_paths": [ "/so2d/172/0912-01" ] }, { "cite": "122 S.E. 2d 74", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1968, "opinion_index": 0 }, { "cite": "255 N.C. 515", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8570855 ], "year": 1968, "opinion_index": 0, "case_paths": [ "/nc/255/0515-01" ] }, { "cite": "172 S.E. 2d 55", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "276 N.C. 243", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560915 ], "opinion_index": 0, "case_paths": [ "/nc/276/0243-01" ] }, { "cite": "118 S.E. 2d 897", "category": "reporters:state_regional", "reporter": "S.E.2d", "pin_cites": [ { "page": "905" } ], "opinion_index": 0 }, { "cite": "254 N.C. 255", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8625781 ], "pin_cites": [ { "page": "265" } ], "opinion_index": 0, "case_paths": [ "/nc/254/0255-01" ] }, { "cite": "128 S.E. 2d 577", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "pin_cites": [ { "page": "582-588" } ], "opinion_index": 0 }, { "cite": "133 S.E. 2d 474", "category": "reporters:state_regional", "reporter": "S.E.2d", "opinion_index": 0 }, { "cite": "260 N.C. 601", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8575738 ], "opinion_index": 0, "case_paths": [ "/nc/260/0601-01" ] }, { "cite": "147 F. Supp. 887", "category": "reporters:federal", "reporter": "F. Supp.", "case_ids": [ 4275111 ], "year": 1957, "opinion_index": 0, "case_paths": [ "/f-supp/147/0887-01" ] }, { "cite": "158 S.E. 2d 812", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1957, "opinion_index": 0 }, { "cite": "272 N.C. 603", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8574109 ], "year": 1957, "opinion_index": 0, "case_paths": [ "/nc/272/0603-01" ] }, { "cite": "174 S.E. 2d 511", "category": "reporters:state_regional", "reporter": "S.E.2d", "weight": 2, "pin_cites": [ { "page": "517" }, { "page": "517" } ], "opinion_index": 0 }, { "cite": "276 N.C. 620", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8563141 ], "pin_cites": [ { "page": "630" } ], "opinion_index": 0, "case_paths": [ "/nc/276/0620-01" ] }, { "cite": "258 N.C. 211", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8560132 ], "opinion_index": 0, "case_paths": [ "/nc/258/0211-01" ] } ], "analysis": { "cardinality": 1043, "char_count": 31823, "ocr_confidence": 0.551, "pagerank": { "raw": 2.455352622980711e-07, "percentile": 0.804978977538845 }, "sha256": "dfbaa71e4243fa7fa9dd733a0275b9c00d028b178ab8564ed891d5dbe2fa6875", "simhash": "1:bb6ee1b1167783de", "word_count": 5342 }, "last_updated": "2023-07-14T15:36:58.436463+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "NATIONWIDE MUTUAL INSURANCE COMPANY and TUX BOWERS MOTOR COMPANY, INC. v. FIREMAN\u2019S FUND INSURANCE COMPANY; TERRY EUGENE CARSON; DOWNIE WOODROW CARSON; CHARLES P. MICHAELS, ADMINISTRATOR OF THE ESTATE OF GERALD D. MICHAELS; BIS RAY LEWIS; BARBARA ANN LEWIS; HOMER EPLEY; LENDY JAMES EPLEY; OLIVER DODSON McKINNEY; CLARA McKINNEY; ST. PAUL FIRE & MARINE INSURANCE COMPANY; MARYLAND CASUALTY COMPANY; and NATIONAL GRANGE MUTUAL INSURANCE COMPANY" ], "opinions": [ { "text": "SHARP, Justice.\nThe verdict of the jury, which established that at the time of the accident on 25 October 1966 Terry was operating the 1961 Oldsmobile within the scope of his permission from Tux, is not challenged by any assignment of error. Therefore, plaintiffs\u2019 policy covered Terry\u2019s operation of that vehicle imless the assigned risk policy which Fireman\u2019s issued to Carson insuring the 1965 Oldsmobile covered Terry\u2019s operation of the 1961 Oldsmobile is as a substitute vehicle for the 1965 Oldsmobile. If it did, Nationwide\u2019s coverage is excluded; otherwise, not. Fireman\u2019s concedes that the issue submitted \u201cwas the only one raised and presented under the pleadings and evidence, and about which there was contraverting or conflicting testimony.\u201d\nThe first question presented is: Who, within the purview of the Motor Vehicle\u2019s Safety-Responsibility Act of 1953 (N. C. Gen. Stats., ch. 20, art. 9A), was the owner of the 1965 Oldsmobile on 25 October 1966 ? As used in an owner\u2019s or operator\u2019s policy of liability insurance, the Safety-Responsibility Act (Act), G.S. 20-279.1 (9) defines the word owner as \u201ca person who holds the legal title of a motor vehicle, or in the event a motor vehicle is the subject of an agreement for the conditional sale or lease thereof with the right of purchase upon performance of the conditions stated in the agreement and with an immediate right of possession vested in the conditional vendee or lessee, or in the event a mortgagor of a vehicle is entitled to possession, then such conditional vendee or lessee or mortgagor shall be deemed the owner for the purposes of this article.\u201d\nUnder this definition, the word owner embraces \u201cthe holder of title and a mortgagor, conditional vendee or lessee having right of purchase and the right of possession.\u201d Insurance Co. v. Hayes, 276 N.C. 620, 630, 174 S.E. 2d 511, 517. Indubitably Carson held the legal title to the 1965 Oldsmobile, and, having given his note for the balance of the purchase price and executed a conditional sales contract securing it, he was also a conditional vendee with the right of possession. Thus he was covered by every aspect of the statutory definition of owner. Furthermore, as noted in Insurance Co. v. Hayes, supra, in enacting the 1963 amendment to G.S. 20-72 (b) (which provides that title to a motor vehicle cannot be transferred from one owner to another until the certificate of title has been duly executed and the vehicle delivered to the transferee), the legislature \u201cused the word \u2018title\u2019 as a synonym for the word \u2018ownership\u2019.\u201d The opinion also pointed out that \u201cG.S. 20-38 defines \u2018owner\u2019 under the Motor Vehicles Act and G.S. 20-279.1 defines \u2018owner\u2019 essentially the same way.\u201d Id. at 630, 174 S.E. 2d at 517.\nLegal title to the 1965 Oldsmobile being in Carson, it is immaterial to decision here that Terry may have had an equitable interest in the vehicle to the extent of the payments he had made on the purchase price. The purpose of the Act is to provide protection to the public from damages resulting from the negligent operation of automobiles by irresponsible persons. By its definition of an \u201cowner,\u201d the legislature attempted to close all avenues of escape from its provisions. Insurance Co. v. Hayes, supra; Harrelson v. Insurance Co., 272 N.C. 603, 158 S.E. 2d 812; Indiana Lumberman\u2019s Mutual Insurance Co. v. Parton, 147 F. Supp. 887 (M.D.N.C. 1957).\nWe have no statistics showing how many parents have insured an automobile to which they hold legal title for the benefit of a minor child under circumstances similar to those of this case. It is not, however, an unusual situation. See Smith v. Simpson, 260 N.C. 601, 133 S.E. 2d 474. When a minor\u2019s negligent operation of such a vehicle causes injury and death, were the insurer permitted to escape liability by showing that the minor was the equitable owner of the vehicle it had insured, the purpose of the Act would be thwarted and the public subjected to the risk of injury from unnumbered, uninsured minor drivers. The legislature has perpetuated no such hoax. Available statistics show that in 37 % of all automobile accidents in which licensed drivers were involved in North Carolina during the year 1970, the drivers were under the age of twenty-five years, and that half of these were in the 16-19 age group.\nWe hold that Carson, who had the legal title, was the owner of the 1965 Oldsmobile; that he had authority to control it; and that it was covered by his Fireman\u2019s policy, which listed it as an insured automobile and Terry \u201cas driver.\u201d It is obvious that, in deciding otherwise, both the trial court and the Court of Appeals were misled by dicta in Underwood v. Liability Co., 258 N.C. 211, 128 S.E. 2d 577.\nThe facts in Underwood, which are clearly distinguishable from those of this case, were these: Mrs. C purchased an automobile for her son, J, aged 17, and took title in her name. In her application for insurance she stated that she was the owner of the car but it would be operated by J \u201c100% of the time.\u201d The risk was assigned to the defendant insurance company, which issued a policy meeting the requirement of G.S. 20-279.21. In June 1958, two months later, Mrs. C moved to Florida after arranging for J to remain in North Carolina with plaintiff. On 9 June 1958 Mrs. C transferred title to the automobile to the plaintiff. On 27 June 1958 Mrs. C canceled the liability policy which had been issued to her, and application was made for a new policy to be issued to the plaintiff. The producer of record held this application pending payment of the premium, which was to accompany it. Because of a month\u2019s delay in refunding Mrs. C\u2019s unearned premium and an error in the amount of the refund, the premium for the plaintiff\u2019s policy was never paid. On 4 August 1958 the plaintiff\u2019s son was riding with J when the car overturned and both were killed. Plaintiff, as administrator of her son\u2019s estate, brought suit for his wrongful death against the administrator of J. She recovered judgment and sued the defendant insurance company when it declined to pay. In that suit, upon a waiver of jury trial, the judge found facts as detailed above. He also found that J was the beneficial owner of the automobile and that the producer of record had no authority from J or the plaintiff to surrender the policy to the defendant for cancellation. This Court reversed judgment for the plaintiff upon the ground that when Mrs. C transferred title to the automobile to the plaintiff, the defendant\u2019s insurance was terminated as a matter of law. The rationale was that an owner\u2019s motor vehicle liability policy is a contract between the insurance company and the owner, and there is no insurance separate and distinct from the ownership of the car. The opinion pointed out that the Safety Responsibility Act makes no requirement that insurance follow the vehicle in case of transfer of title and that the policy expressly declared that \u201cassignment of entry shall not bind the company (insurer) until its consent is endorsed hereon.\u201d\nFollowing the statement of the court\u2019s decision, the opinion then said:\n\u201cIt is not clear what significance the trial court placed upon its finding that Jerry Wayne Otwell (J) was the beneficial owner of the automobile. If the import is that he was the owner and had right of possession and control, there was most certainly no coverage. The insurance contract was with Mrs. Chaffin (Mrs. C) and the policy covered the named insured, Mrs. Chaffin (plaintiff), and any other person while using the automobile, provided the actual use was with the permission of Mrs. Chaffin. In order to grant permission, as the word \u2018permission\u2019 is used in the policy, there must be such ownership or control of the automobile as to confer the legal right to give or withhold assent. It is something apart from a general state of mind. If Jerry actually owned the automobile and had the right to possession and control, or if Mrs. Chaffin parted with the title (and it is undisputed that she assigned to Mrs. Underwood on 9 June 1958 such title as she had) then, in either event, the operation of the car by Jerry on 4 August 1958 was not with permission of Mrs. Chaffin within the purview of the omnibus clause of the policy. Insurer had no contract with or responsibility to or for Jerry apart from the ownership of the vehicle by Mrs. Chaffin.\u201d Id. at 219, 128 S.E. 2d at 582-588.\nThe foregoing statement was obviously unnecessary to the decision of the case, and all suggestions therein that Jerry Wayne Otwell may have been the owner of the automobile are disapproved. \u201cA decision of the Supreme Court must be interpreted within the framework of the facts of that particular case.\u201d Howard v. Boyce, 254 N.C. 255, 265, 118 S.E. 2d 897, 905. Accord, Insurance Co. v. Insurance Co., 276 N.C. 243, 172 S.E. 2d 55. In Underwood, at the time of the damage in suit, the holder of the legal title to the automobile involved had no liability insurance on the vehicle, and the former owner had canceled the insurance she carried on the car prior to the time she transferred title to it. The automobile which J was driving was indeed an uninsured vehicle. In this case, the 1965 Oldsmobile was an insured automobile described in a policy of insurance issued to the owner, the holder of the legal title.\nIt is too clear for argument that at all times Terry used the 1965 Oldsmobile with his father\u2019s unqualified permission. Carson took title to the vehicle in his name, assumed responsibility for the balance of the purchase price, and procured liability insurance upon it for the sole purpose of providing his minor son with an automobile. During the six months intervening between the purchase of the 1965 Oldsmobile and the day it was delivered to Williams Paint and Body Shop to be repainted, Carson himself never drove it over twice, if he drove it at all. Had Terry been driving the 1965 Oldsmobile on the evening of 25 October 1966 he would undoubtedly have been covered by the policy which Fireman\u2019s had issued to Carson. We hold that Carson was the owner of the 1965 Oldsmobile and that it was covered by the policy which Fireman\u2019s had issued to him.\nThe next question is whether Fireman\u2019s policy covered the 1961 Oldsmobile as a \u201ctemporary substitute automobile\u201d for the 1965 Oldsmobile. Such an automobile is (1) one not owned by the insured or his spouse and (2) one which is being temporarily used for an insured automobile while it is \u201cwithdrawn from normal use because of its breakdown, repair, servicing, loss or destruction.\u201d It is undisputed that neither Carson nor his wife owned the 1961 Oldsmobile which Terry was driving at the time of the accident. Tux admits its ownership of that vehicle.\nIt is equally clear that while the 1965 Oldsmobile remained in the Williams Paint and Body Shop for the removal and replacement of outside paint which had proved defective, the insured vehicle had been withdrawn from normal use \u201cbecause of its . . . repair. ...\u201d A substitution provision in a policy of automobile liability insurance \u201cis for the insured\u2019s benefit and is to be construed liberally in favor of the insured if any construction is necessary.\u201d 7 Am. Jur. 2d Automobile Insurance \u00a7 103 (1963). See Hunnicutt v. Insurance Co., 255 N.C. 515, 122 S.E. 2d 74; 4 N. C. Index 2d Insurance \u00a7 84 (1968). As the court said in Sanz v. Reserve Insurance Co. of Chicago, 172 So. 2d 912, 913 (Fla. App. 1965), the terms of a substitution provision in an automobile policy \u201cshould be defined and given their every day \u2018man-on-the-street\u2019 understood meaning.\u201d When the outside paint on the body of an automobile \u201cspiderwebs\u201d and peels off, leaving the metal exposed, the vehicle is in need of immediate repairs.\nNothing this Court said in Ransom v. Casualty Co., 250 N.C. 60, 108 S.E. 2d 22, impinges upon the foregoing statement. In Ransom, it was held that an insured automobile, which was not used because it was \u201clow on gas,\u201d was not \u201cwithdrawn from normal use because of its breakdown, repair, servicing, loss or destruction,\u201d and the substitute automobile which insured borrowed for the evening was, therefore, not covered by his policy. The Court rejected the plaintiff\u2019s contention that the insured vehicle had been temporarily withdrawn for \u201cservicing.\u201d Fireman\u2019s contention that Ransom v. Casualty Co., supra, is authority for the proposition that, before an insured automobile can be replaced by a temporary substitute vehicle, it must be withdrawn from use because of some mechanical defect cannot be sustained. We hold that on 25 October 1966 the 1965 Oldsmobile had been temporarily withdrawn from normal use for repairs and that the 1961 Oldsmobile was a temporary substitute for it.\nThe remaining question is whether the 1961 Oldsmobile was being used with Carson\u2019s consent on the evening of 25 October 1966. If so, it became an insured automobile, temporarily replacing the 1965 Oldsmobile in Carson\u2019s policy just as it had replaced its actual use.\nFireman\u2019s first contends that permission to use one automobile does not constitute permission to obtain and use a substitute vehicle; that only Carson, the named insured, could authorize the procurement of a substitute automobile and grant permission for its use, and he did neither. This contention ignores the fact that, notwithstanding Terry procured the 1961 Oldsmobile from Tux \u201con his own\u201d and without his father\u2019s knowledge, Terry forthwith took the car to his father\u2019s home and kept it there under circumstances which clearly implied his consent for Terry to use the vehicle. Carson testified that Terry \u201cused it and drove it where he wanted to and in the same manner he had driven the 1965 Oldsmobile before it was put in the shop to be repainted.\u201d Carson\u2019s purpose in taking title to the 1965 Oldsmobile was to provide general transportation for his son. When Bowers delivered the 1961 Oldsmobile to Terry as a temporary substitute for the 1965 Oldsmobile he was merely furthering Carson\u2019s previously permitted purpose. See Hemphill v. Home Insurance Company, 121 Ga. App. 323, 174 S.E. 2d 251.\nSection III (a), the omnibus provision of Fireman\u2019s policy, provided in pertinent part that \u201cthe unqualified word \u2018insured\u2019 includes the named insured and . . . any person while using the automobile .... provided the actual use of the automobile is by the insured or spouse or with the permission of either. . . .\u201d Under G.S. 20-279.21 (b) (2), such permission may be either express or implied. \u201c[T]his implication may be a product of the present or past conduct of insured. Implied permission is not confined alone to affirmative action, and is usually shown by usage and practice of the parties over a sufficient period of time prior to the day on which the insured car was being used. It may be established by a showing of a course of conduct or relationship between the parties, including lack of objection to the use by the permittee which signifies acquiescence or consent of the insured.\u201d 7 Am. Jur. 2d Automobile Insurance \u00a7 113 (1963). Accord, Insurance Co. v. Insurance Co., supra; 4 N. C. Index 2d Insurance \u00a7 87 (1968).\nFireman\u2019s second contention is that because Carson did not own the 1961 Oldsmobile, he could not authorize its use by another. Since a \u201ctemporary substitute automobile\u201d within the meaning of a liability policy is a vehicle not owned by the insured, to adopt Fireman\u2019s contention would be to hold that such an automobile could be covered only while being operated by the named insured himself. Such a construction would defeat the purpose of the omnibus clause, and the policy will not permit it. Under Part I, Coverage A and B, and Part IV (3), a temporary substitute automobile being operated by the insured or any person with his express or implied consent is an insured automobile. See Hardware Mutual Casualty Co. v. Hopkins, 106 N.H. 412, 213 A. 2d 692, and Davidson v. Fireman\u2019s Fund Indemnity Co., 165 N.Y.S. 2d 598.\nThe object of the substitution clause is to afford temporary insurance which will protect the insured\u2019s operation of a borrowed vehicle while the automobile specified in the policy is being repaired and until it can be restored to normal use. \u201cThe provision is not to be unreasonably extended to materially increase the risk contemplated by the insurer. Neither is it to be narrowly applied against the insured, for the clause was designed for his protection.\u201d Harte v. Peerless Insurance Co., 123 Vt. 120, 124, 183 A. 2d 223, 226.\nIn Hemphill v. Home Insurance Co., supra at 333, 174 S.E. 2d at 259, it is said: \u201cThe purpose (of a substitution clause) is not to defeat liability but reasonably to define coverage by limiting the risk to one operating vehicle at a time for a single premium.\u201d\nWe have found no decision involving facts \u201con all fours\u201d with those of this case, and the parties have cited none. The decisions in Tanner v. Insurance Co., 226 F. 2d 498 (6th Cir. 1955) and Grundeen v. Fidelity & Guaranty Co., 238 F. 2d 750 (8th Cir. 1956), cited by Fireman\u2019s, involve facts so different from those sub judice that they require no discussion.\nWe hold that on 25 October 1966 Terry was operating the 1961 Oldsmobile with Carson\u2019s consent; that it was an automobile covered by Fireman\u2019s policy; and that Terry was an insured driver.\nThe decision of the Court of Appeals affirming the judgment of the Superior Court that Nationwide is obligated to defend the actions instituted against Terry and to pay any judgments which might be entered against him to the extent of its policy limits and that Fireman\u2019s has no obligation to Terry with respect to these actions is reversed. The cause is returned to the Court of Appeals for remand to the Superior Court for entry of judgment that Fireman\u2019s is obligated to defend the \u2022actions instituted against Terry on account of his operation of the 1961 Oldsmobile on the evening of 25 October 1966 and to pay any judgments which may be entered against him to the extent of the policy limits and that Nationwide has no obligation with reference to those actions.\nEeversed and remanded.", "type": "majority", "author": "SHARP, Justice." } ], "attorneys": [ "Thomas M. Starnes for plaintiff appellants.", "Byrd, Byrd & Ervin for Charles P. Michaels, Administrator of the Estate of Gerald D. Michaels, defendant appellee.", "Mitchell & Teele for St. Paul Fire and Marine Insurance Company, defendant appellee.", "Roy Walton Davis for Barbara Lewis and Bis Ray Lewis, defendant appellees.", "TJzzell and Dumont for Fireman\u2019s Fund Insurance Company, defendant appellee." ], "corrections": "", "head_matter": "NATIONWIDE MUTUAL INSURANCE COMPANY and TUX BOWERS MOTOR COMPANY, INC. v. FIREMAN\u2019S FUND INSURANCE COMPANY; TERRY EUGENE CARSON; DOWNIE WOODROW CARSON; CHARLES P. MICHAELS, ADMINISTRATOR OF THE ESTATE OF GERALD D. MICHAELS; BIS RAY LEWIS; BARBARA ANN LEWIS; HOMER EPLEY; LENDY JAMES EPLEY; OLIVER DODSON McKINNEY; CLARA McKINNEY; ST. PAUL FIRE & MARINE INSURANCE COMPANY; MARYLAND CASUALTY COMPANY; and NATIONAL GRANGE MUTUAL INSURANCE COMPANY\nNo. 44\n(Filed 30 July 1971)\n1. Insurance \u00a7 87 \u2014automobile liability insurance \u2014 ownership of car \u2014 title in father\u2019s name \u2014 operation by son\nA father is the owner of an automobile operated exclusively by his minor son where the father registers the title in his own name and also executes the note and conditional sales contract for the balance of the purchase price. G.S. 20-279.21(9). Dicta in Underwood v. Liability Co., 258 N.C. 211, are expressly disapproved.\n2. Insurance \u00a7 80\u2014 automobile insurance \u2014 purpose of safety responsibility law\nThe purpose of the Motor Vehicle Safety-Responsibility Act is to provide protection to the public from damages resulting from the negligent operation of automobiles by irresponsible persons.\n3. Appeal and Error \u00a7 67\u2014 decision of Supreme Court \u2014 interpretation\nA decision of the Supreme Court must be interpreted within the framework of the facts of that particular case.\n4. Insurance \u00a7 84\u2014 automobile insurance \u2014 temporary substitute vehicle\nA \u201ctemporary substitute automobile\u201d is an automobile which is not owned by the insured or his spouse and which is being temporarily used for an insured automobile that has been withdrawn from normal use because of its breakdown, repair, servicing, loss, or destruction.\n5. Insurance \u00a7 84\u2014 automobile insurance \u2014 substitution provision \u2014 construction in favor of insured\nA substitution provision in a policy of automobile liability insurance is for the insured\u2019s benefit and is to be construed liberally in favor of the insured if any construction is necessary.\n6. Insurance \u00a7 84\u2014 substitution provision \u2014 immediate repair \u2014 peeling of paint\nAn automobile was in need of immediate repair, within the meaning of a substitution provision, when the outside paint on the body of the car had begun to \u201cspiderweb\u201d and peel off, leaving the metal exposed.\n7. Insurance \u00a7 84 \u2014 . vehicle covered under automobile insurance policy \u2014 temporary replacement vehicle \u2014 consent of insured\nA temporary replacement automobile was being used, at the time of an accident, with the consent of the driver\u2019s father, who was the insured under an assigned risk policy containing a substitution provision, where there was evidence that the son kept the automobile at his father\u2019s home under circumstances implying the father\u2019s consent to use it; consequently, the temporary vehicle, which had replaced an automobile insured under the father\u2019s policy, was itself insured under the policy. G.S. 20-279.21 (b) (2).\n8. Insurance \u00a7 84\u2014 purpose of substitution provision\nThe object of a substitution clause is to afford temporary insurance which will protect the insured\u2019s operation of a borrowed vehicle while the automobile specified in the policy is being repaired and until it can be restored to normal use.\nAppeal by plaintiffs under G.S. 7A-30 (2) from the decision of the Court of Appeals (reported in 9 N.C. App. 193, 175 S.E. 2d 741), which affirmed the judgment of Ervin, J., entered at the November 1969 Session of Burke. The case was docketed and argued in the Supreme Court as No. 44 at the Fall Term 1970.\nAction for a declaratory judgment.\nPlaintiffs are Nationwide Mutual Insurance Company (Nationwide) and its insured, Tux Bowers Motor Company (Tux). They seek to determine whether the policy of garage liability insurance Nationwide issued to Tux, or the owner\u2019s automobile liability policy Fireman\u2019s Fund Insurance Company (Fireman\u2019s) issued to Downie Woodrow Carson (Carson), covered the 1961 Oldsmobile which was involved in an accident on 25 October 1966 while being driven by Carson\u2019s son, Terry Eugene Carson (Terry). If Fireman\u2019s policy afforded such coverage Nationwide\u2019s policy excluded coverage.\nIn addition to Fireman\u2019s, Carson, and Terry, all persons having potential claims against Terry for damages arising out of the accident and all insurance companies having potential liability coverage to passengers in the 1961 Oldsmobile under policies containing uninsured motorist insurance were made parties-defendant.\nThe evidence of the parties, which was without material conflict except in the one instance hereinafter specifically noted, tended to show:\nIn 1966 Terry, a minor born 22 September 1949, resided in the home of his father as a member of his family. On 1 April 1966, following negotiations between Terry and the president of Tux, Mr. Tux Bowers (Bowers), Terry agreed to buy from Tux a 1965 Oldsmobile carrying a ten-months warranty. Terry made the $600.00 down payment from funds he had saved for that purpose. Because of Terry\u2019s minority, title to the- vehicle was taken in the name of his father, who signed the note for the balance of the purchase price and the conditional sales contract securing it. Terry, however, bought the license, made the monthly payments on the car, and paid all the expenses of its operation and maintenance. His mother could not drive, and Carson did not drive the vehicle. ,\nFollowing the purchase of the 1965 Oldsmobile, Carson secured an all purpose endorsement which added the 1965 Oldsmobile to the policy of liability insurance which Fireman\u2019s had previously issued to him under the assigned risk plan. Terry paid the $72.00 premium for this endorsement in which he was \u201cadded as driver\u201d of the 1965 Oldsmobile. Carson\u2019s policy with Fireman\u2019s was in full force and effect on 25 October 1966.\nTerry drove the 1965 Oldsmobile at his pleasure and as his own. Carson did not restrict his use of it in anyway, and Terry never asked his permission to use the car. About five months after its purchase, the paint on the 1965 Oldsmobile cracked and peeled. Without consulting Carson, Terry reported this development to Bowers. The warranty still being in effect, on 4 October 1966 Bowers agreed to have the car repainted. He and Terry arranged with Williams Paint and Body Shop to do the job, which was supposed to take four or five days. Terry, who lived fourteen miles from his employment in Morganton, requested Bowers to provide him transportation while the 1965 Oldsmobile was being repainted. Bowers agreed to lend Terry a 1961 Oldsmobile from Tux\u2019s used car lot. Tux owned this vehicle, which carried one of its dealer\u2019s license plates.\nBowers testified that he let Terry have the 1961 Oldsmobile for the purpose of driving to and from work and stipulated that he park it each morning on Tux\u2019s used car lot so that it would be available for sale; that he not drive the car at night; and that he \u201cnot run all over the country with the car.\u201d In contradiction of Bowers, Terry testified that Bowers provided the 1961 Oldsmobile in lieu of the 1965 model; that the only restriction he placed upon its use was the requirement that it be parked on Tux\u2019s lot during the day so that it would be available for sale; and that he drove the car both day and night, just as he had driven the 1965 Oldsmobile. Both Terry and Bowers testified that on each working day while Terry was using the car he returned it to Tux\u2019s lot about 8:00 a.m. and got it again between 5:00 and 5:30 p.m., and that on the weekends he kept the car with him.\nCarson was not a party to Terry\u2019s arrangement with Bowers, and he knew nothing about the conditions under which Bowers let Terry have the 1961 Oldsmobile. While Terry had the car he parked it in his father\u2019s yard just as he had parked the 1965 Oldsmobile, and Carson never made any objection to his use of the car. Carson testified: Terry \u201cused it to drive it where he wanted to and in the same manner that he had driven the 1965 Oldsmobile before it was put in the shop to be painted.\u201d\nThree weeks after he got the 1961 Oldsmobile, on the night of 25 October 1966 in the town of Old Fort, Terry wrecked the vehicle in a one-car accident. With him at the time were Clara McKinney, Lendy Epley, Barbara Ann Lewis, and Gerald D. Michaels, \u201ca carload of teenagers.\u201d Michaels died as a result of the injuries he received in the wreck. On 25 October 1966 the 1965 Oldsmobile was still at the Williams Paint and Body Shop, which had not begun repainting it. The job was not done until about two weeks later.\nAdmissions in the pleadings establish: (1) The administrator of the estate of Gerald D. Michaels has sued Carson, Terry, and Tux to recover damages for his wrongful death. (2) Barbara Ann Lewis, by her next friend, has brought suit against the same three defendants to recover damages for personal injuries which she sustained in the wreck. (3) The father of Barbara Ann Lewis, Bis Ray Lewis, has likewise sued to recover the damages he sustained in consequence of her injuries. (4) Lendy James Epley, Clara McKinney, and the father of each also have potential claims for damages arising out of the accident. (5) A dispute exists between Nationwide and Fireman\u2019s as to whether Fireman\u2019s policy covered Terry\u2019s operation of the 1961 Oldsmobile on 25 October 1966.\nThe garage liability policy which Nationwide issued to Tux, inter alia, covered any automobile owned, maintained, or used by Tux \u201cfor the purpose of garage operations.\u201d It insured any person using such an automobile with Tux\u2019s permission, provided (1) such person\u2019s actual operation of the vehicle is \u201cwithin the scope of such permission,\u201d and (2) \u201cif no other valid and collectible automobile liability insurance, either primary or excess, with limits of liability at least equal to the minimum limits specified by the Financial Responsibility Law of the state in which the automobile is principally garaged, is available to such person\nThe policy which Fireman\u2019s issued to Carson covered any automobile described therein and insured any person using the automobile, \u201cprovided the actual use of the automobile is with the permission of the named insured.\u201d The policy also covers \u201can automobile not owned by the named insured . . . while temporarily used as a substitute for the described automobile when withdrawn from normal use because of its breakdown, repair, servicing, loss, or destruction; . . . . \u201d\nNationwide contends: (1) At the time of the accident, on 25 October 1966, Terry was not driving the 1961 Oldsmobile \u201cwithin the scope of his permission\u201d from Bowers, and coverage under the garage liability policy is therefore excluded; (2) the policy which Fireman\u2019s issued to Carson provided \u201cother valid and collectible automobile liability insurance\u201d to Terry, and this coverage also excluded coverage by Nationwide.\nFireman\u2019s denied coverage on the following grounds: (1) The 1965 Oldsmobile, although named in Carson\u2019s policy, was not covered by it because Terry, not Carson, owned the vehicle; (2) even if Carson was the owner of the 1965 Oldsmobile, the 1961 Oldsmobile was not a \u201ctemporary substitute automobile\u201d for it within the meaning of the policy; and (3) even if the 1961 Oldsmobile was a temporary substitute automobile it was not being used with Carson\u2019s consent.\nAt the conclusion of all the evidence Judge Ervin held as a matter of law that (1) on 25 October 1966 Terry alone owned the 1965 Oldsmobile, and Carson had no right to control it; (2) on 25 October 1966 the vehicle had not been withdrawn from normal use due to its breakdown, repair, servicing or destruction, and Terry was not operating Tux\u2019s 1961 Oldsmobile as a temporary substitute for the 1965 Oldsmobile; (3) at the time of the accident in suit Terry was not operating the 1961 Oldsmobile with the permission, express or implied, of Carson or his spouse, neither of whom had the right of possession or the right to control it; and (4) Terry was not a named insured in the policy of liability insurance issued by Fireman\u2019s, and his operation of the 1961 Oldsmobile was not covered by the policy which Fireman\u2019s had issued to Carson. Judge Ervin submitted to the jury the following issue, which was answered No: \u201cWas Terry Eugene Carson operating the 1961 Oldsmobile owned by Tux Bowers Motor Company, Inc., on the occasion of the accident on October 25, 1966, beyond the scope of the permission given by Tux Bowers Motor Company, Inc.?\u201d\nUpon his conclusions of law and the jury\u2019s verdict, Judge Ervin entered judgment decreeing that (1) Nationwide was obligated, under its garage liability policy issued to Tux, to defend Terry in any action instituted against him on account of his operation of the 1961 Oldsmobile on 25 October 1966 and to pay any judgments which might be entered against Terry and Tux within the policy\u2019s limitations of liability; (2) Fireman\u2019s policy did not cover Terry\u2019s use and operation of the 1961 Oldsmobile, and Fireman\u2019s has no obligation either to Carson or Terry on account of the accident on 25 October 1966; and (3) the other insurance companies made parties-defendant to the action had no liability for injuries resulting from the wreck of the 1961 Oldsmobile.\nPlaintiffs appealed to the Court of Appeals, which affirmed the judgment in a two-to-one decision. Because of the dissent, plaintiffs appealed as a matter of right to the Supreme Court.\nThomas M. Starnes for plaintiff appellants.\nByrd, Byrd & Ervin for Charles P. Michaels, Administrator of the Estate of Gerald D. Michaels, defendant appellee.\nMitchell & Teele for St. Paul Fire and Marine Insurance Company, defendant appellee.\nRoy Walton Davis for Barbara Lewis and Bis Ray Lewis, defendant appellees.\nTJzzell and Dumont for Fireman\u2019s Fund Insurance Company, defendant appellee." }, "file_name": "0240-01", "first_page_order": 268, "last_page_order": 281 }