Uninsured motorists coverage "is designed to further close the gaps inherent in motor vehicle financial responsibility and compulsory insurance legislation." 7 Am. Jur.2d, Automobile Insurance § 135, p. 460. It "is intended, within fixed limits, to provide financial recompense to innocent persons who receive injuries, and the dependents of those who are killed, through the wrongful conduct of motorists who, because they are uninsured and not financially responsible, cannot be made to respond in damages." Annotation: 79 A.L.R.2d 1252, 1252-53.
G.S. § 20-279.21(b)(3), in pertinent part, provides: "No policy of bodily injury liability insurance, covering liability arising out of the ownership, maintenance, or use of any motor vehicle, shall be delivered or issued for delivery in this State with respect to any motor vehicle registered or principally garaged in this State unless coverage is provided therein or supplemental thereto, in limits for bodily injury or death set forth in subsection (c) of § 20-279.5, under provisions filed with and approved by the Insurance Commissioner, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles and hit-and-run motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom."
G.S. § 20-279.21(b)(3) was enacted as Chapter 640, Session Laws of 1961, entitled "An Act to amend G.S. 20-279.21 defining motor vehicle liability insurance policy for financial responsibility purposes so as to include protection against uninsured motorists." (Our italics.)
The quoted statutory provision uses but does not define the term "uninsured motor vehicles." The term "uninsured automobile" is defined in the uninsured motorist endorsement attached to and an integral part of the automobile liability policy issued by defendant to plaintiff's father. The wording of the issue submitted by the parties as determinative implies agreement that the meaning of the term "uninsured motor vehicle" as used in the quoted statutory provision and of the term "uninsured automobile"
While the liability of Stackhouse, if any, was insured by a "standard automobile liability insurance policy" issued to it, Stackhouse incurred no liability in connection with the operation of its truck on the occasion when plaintiff was injured. Since the truck was operated by Cowles "without the permission, knowledge or consent" of Stackhouse, the Stackhouse policy was not "applicable to the accident with respect to any person or organization legally responsible for the use" of the truck. Under the admitted and established facts, on the occasion of the collision Cowles was the only person legally responsible for the use of the Stackhouse truck. It is not contended that any automobile liability insurance policy applicable to the accident in which plaintiff was injured provides coverage for the liability of Cowles in connection therewith.
Admittedly, the automobile liability insurance policy issued to Stackhouse with reference to its truck complied with the requirements of G.S. § 20-279.21(a) and (b). However, the present action is on the contract between plaintiff's father and defendant, namely, the uninsured motorists endorsement, and decision herein depends upon the provisions of that contract and not upon those of the policy issued to Stackhouse.
Defendant contends the Stackhouse truck was in fact an insured vehicle. If the term "insured vehicle" were given a literal interpretation, fire, theft or collision insurance thereon would negate the status of the truck as an uninsured vehicle. Obviously, the term "uninsured vehicle," when used in an uninsured motorists endorsement, must be interpreted in the light of the fact that such endorsement is designed to protect the insured, and any operator of the insured's car with the insured's consent, against injury caused by the negligence of uninsured or unknown motorists.
Well-established legal principles include the following: (1) The "primary rule of construction of statutes is to ascertain and declare the intention of the legislature, and carry such intention into effect to the fullest degree." 50 Am.Jur., Statutes § 223. (2) "An insurance contract or policy should be liberally construed to accomplish the purpose or object for which it is made." 44 C.J.S. Insurance § 297a.
In our view, both the intent of the legislation and the wording of the endorsement impel the conclusion that an automobile on which an automobile liability insurance policy has been issued is uninsured within the meaning of said endorsement unless such policy covers the liability of the person using it and inflicting injury on the occasion of the collision or mishap.
The question presented and decided is one of first impression in this jurisdiction. Indeed, Application of Travelers Indemnity Company, Sup., 235 N.Y.S.2d 718, affirmed, without written opinion, Travelers Indemnity Co. v. Melcher, 20 A.D.2d 684, 246 N.Y.S.2d 1015, is the only case disclosed by our research involving a closely analogous factual situation. There, although other questions are discussed at greater length, the holding is in accord with the decision reached herein.
In Hardin v. American Fire Insurance Co., 261 N.C. 67, 134 S.E.2d 142, where the hearing was on demurrer to defendant's plea in bar, this Court considered identical provisions of an uninsured motorist endorsement in relation to a wholly different factual situation. There, the demurrer admitted the car was an "insured automobile." Moreover, the automobile liability insurance policy covering the car was applicable to the collision in which the plaintiff was injured and covered the liability of the operator thereof. This Court decided the car did not become an "uninsured automobile" by reason of the subsequent receivership and insolvency of the liability insurer. It is noted that G.S. § 20-279.21(b)(3) was amended by Chapter 156, Session Laws of
The conclusion reached is that the issue submitted by the parties as determinative should have been answered, "Yes," and that the court erred in answering it, "No." For the error indicated, the judgment of the court below is vacated. The cause is remanded with direction that said issue be answered, "Yes," and that judgment be entered in favor of plaintiff for $5,000.00, together with the costs of this action, in accordance with the stipulation.
Error and remanded.