Dealers Dairy Products Co. v. Royal Ins. Co.

Decision Date10 February 1960
Docket Number36112,Nos. 36111,s. 36111
Parties, 80 A.L.R.2d 441, 10 O.O.2d 424 DEALERS DAIRY PRODUCTS CO., Appellee, v. ROYAL INS. CO., Ltd., Appellant. DEALERS DAIRY PRODUCTS CO., Appellee, v. PHOENIX INS. CO., Appellant.
CourtOhio Supreme Court

Syllabus by the Court

1. A policy of insurance is a contract and like any other contract is to be given a reasonable construction in conformity with the intention of the parties as gathered from the ordinary and commonly understood meaning of the language employed.

2. A policy insuring against loss of goods while in transit or while being transported ordinarily covers the movement of the goods on a transporting conveyance from the starting point to the point of delivery, including stops along the way incidental to the carriage.

3. Where, at the direction of an insured covered by a transportation policy, goods in transit are unloaded from the transporting conveyance and deposited on designated premises and left there in order to devote the transporting conveyance to another transportation project of the insured foreign to the original shipment, there is an abandonment of the initial transportation, even though such interruption is temporary, and, while the goods are at rest over a period of time awaiting further transportation on the same conveyance to the point of delivery, they are in storage and while so stored are removed from the protection of the policy which insures against loss only while the goods are in transit or are being transported.

In these two actions instituted in the Cleveland Municipal Court by the Dealers Dairy Products Company against the Royal Insurance Company, Limited, and the Phoenix Insurance Company, respectively, recovery is sought upon contracts of insurance issued jointly by the two insurers, each assuming one-half of the obligation, and covering partial or total loss of goods while in the course of transportation. On their faces, the insurance policies are described as a 'transportation policy' and a 'transportation floater policy.'

The actions were consolidated, and upon trial, at the close of plaintiff's case, defendants' motions to withdraw the cases from the jury and to enter judgments in their favor were sustained and judgments were entered accordingly.

There were appeals on questions of law to the Court of Appeals for Cuyahoga County, which court reversed the judgments below and remanded the causes for further proceedings. The causes are now here on their merits pursuant to the allowance of motions to certify the records.

Pertinent portions of the Royal insurance policy in issue, which are stipulated to read the same as like provisions in the Phoenix policy, are as follows:

Endorsement clause 1.

'This policy covers all kinds of lawful goods and merchandise, including packages, consisting principally of milk, cream, milk products, and supplies, their own or held by them in trust or on commission, or on consignment, or on which they have made advances, or sold but not delivered, in transit from premises of the assured to the points and places in the United States and/or Canada, and vice versa * * *.'

Endorsement clause 3.

'This policy does not insure:

* * *

* * *

'(h) Any loss or damage or expense due to delay, loss of market or profits.'

Endorsement clause 5.

'This insurance attaches from the time the goods or merchandise are loaded upon vehicle(s) to leave the initial point of shipment and covers continuously thereafter until safely delivered to destination, but only while incidental to transportation. In no event shall this policy cover any goods, after they have ceased to be at the risk of the assured.'

(Emphasis supplied).

As disclosed by the bill of exceptions, the Dealers Dairy Products Company, the Mt. Vernon Foods Company of Mount Vernon, Ohio, and the Cool Meadow Milk Company of Buffalo, New York, are interrelated organizations, and all were insured under the policies described. In July 1956 the Dealers Dairy Products Company, plaintiff herein, purchased certain machinery and equipment from the the Jersey Creamery Company of Detroit, a customer of plaintiff. On or about July 9, 1956, plaintiff delivered by truck a shipment of ice cream to the Jersey Creamery Company in Detroit and there picked up the machinery and equipment mentioned for transportation and delivery to the plaintiff in Buffalo. Enroute to Buffalo with this shipment, the driver of the truck telephoned plaintiff, and he was advised by it that the Jersey...

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