Ben Pulitzer Creations, Inc. v. Phoenix Ins. Co.

• Decision Date: 29 September 1965
• Citation: 263 N.Y.S.2d 373,47 Misc.2d 801
• Parties: BEN PULITZER CREATIONS, INC., Plaintiff, v. The PHOENIX INSURANCE CO., Defendant.
• Court: New York City Court

Page 373

263 N.Y.S.2d 373

47 Misc.2d 801

BEN PULITZER CREATIONS, INC., Plaintiff, v. The PHOENIX INSURANCE CO., Defendant.

Civil Court of the City of New York, New York County, Trial

Term, Part XX.

Sept. 29, 1965.

Murray Rosof, by Irving J. Berman, New York City, for plaintiff.

Rein, Mound & Cotton, by Raymond J. Hagan, New York City, for defendant.

EDWARD J. GREENFIELD, Judge.

During the years 1962 and 1963 plaintiff, a manufacturer and seller of men's neckties who regularly gave his goods out for processing by contractors, had a policy of insurance with the defendant denominated by it a 'Garment Contractor's Floater'. The policy covered the property of the insured 'while in due course of transit between the premises of the Insured and the premises of his contractors * * * and while on the premises of contractors * * * for the purpose of performing work on the property for the account of the Insured.' The perils insured against were all risks of direct physical loss or damage 'while in transit', and certain enumerated risks, including burglary and theft 'while on the premises of contractors'. The policy also covered property in the custody of messengers of the Insured or his contractors.

On March 22, 1963 one of plaintiff's contractors, the Central Neckwear Co. of Newark, N. J., which had been converting plaintiff's merchandise into finished ties, loaded over 100 dozen ties in cartons on to its station wagon and headed for plaintiff's premises in Manhattan to make the delivery. It was late Friday afternoon, and when the station wagon arrived at plaintiff's premises, plaintiff had already closed for the day. Accordingly, Central Neckwear's president, who was making the delivery personally, drove to his home in Brooklyn and garaged the station wagon there in space regularly rented by Central, with the intention of completing the delivery in Manhattan the first thing Monday morning, before he returned to Newark.

The station wagon was locked, with the cartons of finished neckties inside. At 6:15 Monday morning, when Central's president went down to the station wagon, he found the left window vent broken and the door pried open. The cartons were missing. The theft was reported to the police, and thereafter plaintiff made claim for the loss under its insurance policy.

The defendant insurance company resists payment, contending that at the time of the theft the property was neither on the premises of the contractor nor actually in transit.

The general rule with respect to insurance policies covering goods 'in transit' is succinctly stated in 30 N.Y. Jurisprudence, Insurance, § 1160: 'Once the transportation of the goods has started, the property remains protected under the policy during the ordinary delays in transshipments incident to such movements.' This begs the question somewhat, however, since what is meant by 'transportation' is the nub of the problem. When does transit begin, and when does it end under a countless variety of factual patterns?

According to Webster's New International Dictionary, 2nd Edition, p. 2691, 'Goods shipped from one person to another are said to be in transit * * * from the time when delivered to the carrier by the consignor to that when actually or constructively delivered to the consignee.' Such a definition has been taken as too broad by the courts of this state. They define 'transit' in terms of movement rather than the custody of goods by a carrier. Thus, in Mayflower Dairy Products, Inc. v. Fidelity-Phenix Fire Ins. Co., 170 Misc. 2, 3, 9 N.Y.S.2d 892, 893 (App.Term, First Dept., 1938), where goods had been loaded on a truck, and delivery was to commence the next morning, the court held the goods were 'in storage' and not 'in transit', stating that the latter term 'means the movement of the loaded conveyance carrying the goods from the starting point or seller's premises to the point of destination or place of delivery to the buyer or customer. While there may be some reasonable deviation such as temporary stops incidental to the process of delivery or necessary for those engaged in same, or even the return of undelivered goods, transportation or in transit implies the continuous action of moving the goods from the one point and putting them down in another.' To the same effect, see San-Nap-pak Mfg. Co. v. Firemen's Ins. Co., City Ct., 47 N.Y.S.2d 542, aff'd 268 App.Div. 905, 51 N.Y.S. 754.

There is a sharp distinction, however, between goods which have never actually moved, and those which have started on their journey,...