Coffey v. Indiana Lumberman's Mutual Insurance Co.

Decision Date16 February 1967
Docket NumberNo. 16836,16837.,16836
PartiesJ. Shelby COFFEY, Jr., Trustee in Bankruptcy for Oakes Furniture Manufacturing Company, and Manufacturers and Commercial Factors Corporation, Plaintiffs-Appellants, v. INDIANA LUMBERMAN'S MUTUAL INSURANCE COMPANY, Defendant-Appellee. UNITED STATES of America, Plaintiff-Appellant, v. INDIANA LUMBERMAN'S MUTUAL INSURANCE COMPANY, Defendant-Appellee.
CourtU.S. Court of Appeals — Sixth Circuit

J. Shelby Coffey, Jr., Columbia, Tenn., for Coffey et al.

Thomas L. Stapleton, Department of Justice, Washington, D. C., for United States. Robert W. Sturdivant, Nashville, Tenn., on brief; Trabue, Minick, Sturdivant & Harrbison, Nashville, Tenn., Richard M. Roberts, Acting Asst. Atty. Gen., Lee A. Jackson, I. Henry Kutz, Thomas L. Stapleton, Attorneys, Department of Justice, Washington, D. C., James F. Neal, U. S. Atty., Thomas H. Shriver, Asst. U. S. Atty., Nashville, Tenn., of counsel.

Clarence Evans, Lewis S. Pope, Thomas E. Watts, Jr., Nashville, Tenn., on brief; Farris, Evans & Evans, Nashville, Tenn., of counsel, for appellee.

Before O'SULLIVAN and CELEBREZZE, Circuit Judges, and WEINMAN*, District Judge.

PER CURIAM.

These appeals are from a judgment of the District Court in a suit instituted by the Trustee in Bankruptcy, J. Shelby Coffey, Jr., in behalf of the Bankrupt, Oakes Manufacturing Company (hereinafter referred to as the Insured), against the Indiana Lumbermen's Mutual Insurance Company (hereinafter referred to as the Insurance Company) for recovery under an insurance policy contract for a fire loss which occurred at the Insured's furniture plant. The Insurance Company filed an answer and cross-complaint admitting liability in the amount of $33,000. under the mortgage clause of the policy to the Small Business Administration but denying any and all other liability. It tendered the $33,000. into court and sought further relief in the nature of interpleader against nine additional parties who might have an interest in the contested sum. Only one of the cross-defendants, the Manufacturers and Commercial Factors Corporation, an Appellant here, which had a secured lien on the insured property in the amount of $17,140.80, filed an answer. The United States, also an Appellant, intervened in the action to assert a tax claim in the amount of $27,739.37.

The Insurance Company rejected the claim of the Insured and for its defense relied upon the following facts: The Insured informed the Insurance Company by letter that as of June, 1957, it was not maintaining a watchman service, but that watchman service had been instituted on Tuesday night, August 13, 1957; that a watchman was on duty during hours when the plant was not in operation, and over the weekend, and asked that a credit on the premium charged by the Insurance Company be made by reason of the re-institution of its watchman's service. Relying upon the representation and request made by the Insured, the Insurance Company agreed, on September 10, 1957, to make the standard watchman's clause effective, and substantially reduced, as a result of Insured's representation, the premium rate. The watchman's clause and rate reduction were in force from 1957 until the fire on December 12, 1960, destroyed the Insured's plant. The Watchman's Clause of the policy provided:

"In consideration of the reduced rate of premium at which this policy is written, it is made a condition of this policy that, so far as within the control of the Insured, an approved watchman\'s service with approved recording system or watch clock shall be maintained at such times as the premises are not in actual operation."

The evidence disclosed that Insured had laid off on or about November 28, 1960, most of its employees, including the three watchmen who had been in the employ of the Insured. The Insured had no watchmen in its...

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2 cases
  • Commercial Ins. Co., of Newark, N. J. v. Gonzalez.
    • United States
    • U.S. Court of Appeals — First Circuit
    • March 11, 1975
    ...a breach of warranty there is no coverage and no recovery permitted under the policy." This was correct. Coffey v. Indiana Lumberman's Mut. Ins. Co., 6 Cir., 1967, 372 F.2d 646, 648; Fidelity-Phenix Fire Ins. Co. v. Pilot Freight Carriers, Inc., 4 Cir., 1952, 193 F.2d 812, 815-16, 817-18; H......
  • Capital Coastal Corp. v. Hartford Fire Insurance Co.
    • United States
    • U.S. District Court — Eastern District of Virginia
    • July 15, 1974
    ...warranty would not have avoided the loss. Home Ins. Co. v. Ciconett, 179 F.2d 892 (6 Cir. 1950). See also Coffey v. Indiana Lumberman's Mutual Insurance Co., 372 F.2d 646 (6 Cir. 1967). Thus we must conclude that, in addition to finding the CRISTIE unseaworthy, defendant was released from a......

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