149 F.2d 359 (5th Cir. 1945), 11270, Firemen's Mut. Ins. Co. v. Aponaug Mfg. Co.

Docket Nº:11270.
Citation:149 F.2d 359
Party Name:FIREMEN'S MUT. INS. CO. v. APONAUG MFG. CO., Inc., et al.
Case Date:May 11, 1945
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit

Page 359

149 F.2d 359 (5th Cir. 1945)



APONAUG MFG. CO., Inc., et al.

No. 11270.

United States Court of Appeals, Fifth Circuit.

May 11, 1945

Page 360

[Copyrighted Material Omitted]

Page 361

Ross R. Barnett, Rufus Creekmore, and H. H. Creekmore, all of Jackson, Miss., for appellants.

Ben F. Cameron and Lester E. Wills, both of Meridian, Miss., Japtha F. Barbour, Sr., of Hazoo City, Miss., and Toxey Hall and Lee D. Hall, both of Columbia, Miss., for appellees.

Before SIBLEY, HUTCHESON, and LEE, Circuit Judges.

SIBLEY, Circuit Judge.

This appeal is from a summary judgment for the defendants on a complaint brought by appellants against the appellees for damages as for a tort. The plaintiffs alleged that they were insurers against loss by fire of a cotton mill belonging to Aponaug Mfg. Co., Inc., when on Dec. 21, 1938, R. D. Sanders, its president and treasurer and sole stockholder, and exercising sole control over the corporation, in conspiracy with the mill superintendent, C. D. Kent, and one Noel McMahan, burned the mill to collect the insurance, and that $187, 634 was paid on a statement of loss in that amount presented by R. D. Sanders for the Company; and that he fraudulently concealed the fact of the fraudulent fire. Judgment was prayed against all and each of the defendants.

The Company's answer admitted the insurance, the fire and the collection of $187, 634 on a statement of loss presented by Sanders, and that he was its president and treasurer, but denied that he was sole stockholder or exercised full control, and denied he had any authority to so conspire, or that any such conspiracy occurred. Kent answered admitting he was superintendent but denying the conspiracy, or knowledge of the insurance. Sanders denied he was sole stockholder or controlled the Company, but admitted he was president, treasurer, and a director of the Company, and a co-trustee of the stock along with two others, and that he was acting as general manager of the Company under bond, but he denied the conspiracy to burn the mill; and otherwise adopted the answer of the Company. McMahan was later made a defendant, but if served, he made no answer. No judgment was entered as to him. A jury trial was duly remanded.

On the face of the pleadings therefore there were issues as to the fraud of the fire, and who were responsible for it; as to the concealment of the non-liability of the insurers when the loss was settled; and a subsidiary issue as to Sanders' ownership and control of the Company. These issues were material to the case or cases alleged. If Sanders, Kent and McMahan wilfully set fire to the mill, without the complicity of the corporation, in order to cause the insurers to pay, they committed a wrong, and would be individually liable for the injury intentionally done. The insurance would remain valid, and the corporation for its innocent stockholders and creditors could collect, and the insurers after paying would ordinarily be subrogated to the corporation's right of action against the burners of its property; and in our judgment, though subrogation is not expressly alleged in the complaint as a ground of recovery, the wilful setting of the fire and...

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