Court Opinion

ID: 9847494
Source: CourtListenerOpinion
Date Created: 2023-09-24 04:00:48.605311+00
Date Added: 2024-06-11T09:17:17.456222
License: Public Domain

HIGGINS, Justice.
The appeal presents this question: Does the plaintiff’s automobile liability insurance policy No. FCA 10-389-011 issued to Budget Rent A Car, which leased the insured vehicle to Victor Barlow Carraway, afford coverage to Elijah Z. Massey to whom *313Carraway surrendered it in violation of his leasing agreement with the owner?
By the stipulations of the parties and the findings of Judge Seay, who tried the case without a jury, these pertinent facts were established: (1) The plaintiff issued its policy of automobile liability insurance on a 1971 Chevrolet owned and operated in the lessor’s rental business. (2) The coverage extended to the named insured, Budget Rent A Car, and any person or organization legally responsible for the use of the Chevrolet provided the actual use is by named insured or with the permission of the named insured. (3) By written agreement the lessor rented the insured vehicle to Carraway. The written leasing agreement provided that Carraway would not surrender possession to any person unless over twenty-one and a licensed driver. (4) Carra-way, in violation of the agreement and without the knowledge or consent of the lessor, surrendered the vehicle to Massey. (5) While operating the vehicle on the highway, Massey inflicted injuries and damages.
The written rental contract between the owner and Carra-way provided: “All authorized drivers must be 21 or older and licensed.” A sound legal reason existed for the limitation. At the date of the policy, the date of the leasing agreement, and the date of the accident, age twenty-one was fixed by law as the age at which one became legally responsible for his contractual obligations. The lessor, therefore, might hope to recoup any damages resulting from a breach of the rental contract. The purpose of requiring that the permittee be a licensed driver is obvious.
In violation of the agreement and without the knowledge or consent of the lessor, Carraway surreptitiously surrendered the insured vehicle to Elijah Z. Massey, age nineteen. The defendants contend that the terms of the policy afford coverage for injuries inflicted by Massey and in the alternative if the policy does not provide such coverage, the North Carolina Statutes, G.S. 20-279.21 and G.S. 20-281, when construed together, became parts of the insurance contract and extended coverage to any driver who was in lawful possession at the time of the injuries. They contend that Massey was not shown to be in unlawful possession.
Actually, G. S. 20-279.21 applies to the operation of motor vehicles generally and requires coverage for “[T]he person named therein and any other person, as insured, using any such *314motor vehicle . . . with the express or implied permission of such named insured. . . By Chapter 1162, Session Laws of 1967, the General Assembly amended G. S. 20-279.21 (b) (2) by adding as insured “or any other persons in lawful possession.” In the preamble to the amendment the General Assembly declared: “[T]he owner of every motor vehicle has the absolute authority under the law to allow or not to allow anyone else to operate his vehicle. . . .” But when lawful possession is shown, further proof is not required that the operator had the owner’s permission “to drive on the very trip and occasion of the collision.” Section 2 of the amendment provides: “It shall be a defense to any action that the operator of a motor vehicle was not in lawful possession on the occasion complained of.”
 In this case the owner (Budget Rent A Car) surrendered possession of its vehicle to Carraway on written condition that Carraway not permit possession to pass to a person under twenty-one years of age or an unlicensed driver. The owner obligated itself to be responsible for Carraway’s negligence but Carraway could not, in violation of his own agreement, make the owner responsible for Massey’s negligence. No provision is made for owner’s liability either by the policy or by G.S. 20-279.21, as amended, until lawful possession is first established. This may be done by express or implied permission of the owner.
The rule is stated in Bailey v. Insurance Company, 265 N.C. 675, 144 S.E. 2d 898: “ ‘Where express permission is relied upon it must be of an affirmative character, directly and distinctly stated, clear and outspoken, and not merely implied or left to inference. On the other hand, implied permission involves an inference arising from a course of conduct or relationship between the parties, in which there is mutual acquiescence or lack of objection under circumstances signifying assent.’ . . . Ordinarily, one permittee does not have authority to select another permittee without specific authorization from the named insured.” Torres v. Smith, 269 N.C. 546, 153 S.E. 2d 129; Wilson v. Indemnity Co., 272 N.C. 183, 158 S.E. 2d 1; Rhiner v. Insurance Co., 272 N.C. 737, 158 S.E. 2d 891; Insurance Co. v. Insurance Co., 276 N.C. 243, 172 S.E. 2d 55.
The trial court concluded as a matter of law that Elijah Z. Massey was not a person in lawful possession of the rented 1971 Chevrolet automobile and was not insured by the terms of the policy. Likewise, Massey was not within the coverage required *315by G.S. 20-281. G.S. 20-281 required coverage for the owner, rentee, lessee and their agents and employees while in the performance of their duties. There is neither evidence nor finding that Massey at any time was a rentee or lessee or an agent or employee and hence was not performing duties as such. The coverage required by this section extended coverage to Carra-way, but not to Massey.
Judge Seay was correct in adjudging that neither the plaintiff’s insurance policy nor the requirements of State law provided coverage for personal injuries and property damage caused by Massey’s operation of the 1971 Chevrolet automobile No. 0912, License No. 1666-C. The judgment in the Superior Court of Guilford County is
Affirmed.