Government Employees Insurance v. Lumbermens Mutual Casualty Co.

The questions presented by this appeal are identical with those decided this day in Allstate Insurance Company v. Shelby Mutual Insurance Company, et al., 269 N.C. 341, 152 S.E. 2d 436. For the reasons there stated, the judgment rendered below in this case is affirmed. We do not, however, approve the superior court’s conclusion of law No. 2 above quoted. As we held in the above mentioned case, the Lumbermens’ policy, as modified by the endorsement, does not conflict with G.S. 20-279.21 and, therefore, it is not necessary to determine, in this action, the effect of an approval by the Commissioner of Insurance of a provision in an endorsement upon an insurance policy which conflicts with the requirements of the statute cited.

Neither do we approve the statement in the superior court’s conclusion of law No. 4 to the effect that the “escape” clause of the Lumbermens’ policy and the “excess” provision of GEICO’s policy are in conflict. As pointed out in Allstate Insurance Company v. Shelby Mutual Insurance Company, et al., supra, these provisions are contained in separate and distinct contracts between different parties. The terms of each contract must be construed in accordance with the intent of the parties to that contract, subject to possible modification by statutory requirements. The provisions of one of these contracts cannot change the meaning of the other. The question is whether the existence of the GEICO policy, properly construed, is an event which brings into operation the exclusionary clause of the Lumbermens’ policy, properly construed.

Notwithstanding these erroneous portions of its conclusions of law, the superior court’s adjudications of the rights of the parties are in accord with our decision in the Allstate case, supra.

Affirmed.