Editor’s note: We apply the term “Classic” to older court cases that, due to their ongoing relevance, we have republished for your reference.

After a trial court ruled in favor of an insurance company regarding the theft of truck cargo, the property owner appealed. The appeals court considered the question of whether truck cargo protected under a Transportation policy was “in transit” or “in the ordinary course of transportation” when it was stolen.

Two trailers and a truck, owned by the insured, were loaded with the insured’s products at its manufacturing plant and warehouse in southern California. Their destination was northern California where the products were to be delivered to various customers. That evening, three of the insured’s employees drove the vehicles two miles away to a parking lot leased by the insured. The two trailers were disconnected, and the drivers drove home in the tractors, leaving the three locked vehicles for pickup at 2. A.M. They were broken into prior to the return of the drivers, and the cargo was stolen.

One pertinent paragraph in the policy stated: “this policy covers…loss of or damage to lawful goods and merchandise in shipment…occurring while in transit…” Other policy wording read: This policy covers said property from the time of leaving the warehouse, store or factory of shipper and thereafter continuously, in ordinary course of transportation until same is delivered to warehouse, store or factory at destination…”

Citing various authorities and leading cases, the court said that “a temporary stop of brief duration related to the transportation itself does not break the requisite continuity of transportation.” The court found that the stop was not made for the purpose of further work being done on the cargo or of storage. It concluded that any cargo loss “in transit” or ‘in ordinary course of transportation” was covered wherever it occurred and that the facts under review were within the scope of policy coverage.

The court reversed the trial court judgment for the insurance company and rendered judgment in favor of the insured.

Aetna Casualty and Surety Company, Plaintiff-Respondent v. Burbank Generators, Inc., Defendant-Appellant, California Court of Appeal, Second District, Division Three. Civ. No. 58193. Filed July 22, 1981. Reversed CCH 1981 Fire and Casualty Cases 1627.