Before SCHNACKENBERG, HASTINGS and KNOCH, Circuit Judges.
This diversity action was brought by Essex Wire Corporation, plaintiff-appellee, against M. H. Hilt Company, Inc., defendant-appellant, to recover damages alleged to have been caused by defendant, while engaged in performing its contract to insulate pipes in plaintiff's plant in Marion, Indiana, by negligently permitting cloth insulating material to enter an electric motor located in plaintiff's boiler room. The case was tried to the court without a jury resulting in findings of fact and conclusions of law favorable to plaintiff with judgment thereon for plaintiff in the sum of $7,750.58. Defendant's motion for a new trial was denied and this appeal followed. The errors relied upon arise out of certain rulings of the trial court on the evidence and the correctness of the findings and conclusions.
Defendant's employees were engaged at work in plaintiff's plant from about the middle of March, 1953, to the last of December, 1953. On October 22, 1953, at least three of defendant's employees were working in the boiler room.A light material, known as "covering canvas", was being fitted by them over the pipes to be insulated. In this process scrap material, shavings or small pieces of canvas accumulated and were permitted to fall to the floor or upon the scaffolds erected in the boiler room.
In this room, about 30 by 40 feet in size, was housed a high pressure boiler which operated under a forced draft produced by a fan propelled by the motor in question. The fan was mounted on one end of the motor shaft; and, at the other end of the motor, known as the bell-end, there was an air intake in the form of an elliptical-shaped opening about six inches long and three inches wide located about three feet above the floor. There was no guard over this opening. Without the fan in operation the boiler would gradually lose its steam with resulting loss of pressure. Without sufficient steam pressure plaintiff's factory could not operate its vulcanizing processes necessary for certain production and would have no heat.
On October 22, 1953, a piece of scrap canvas was somehow drawn into the electric motor through the air intake causing the motor to make a grinding fluttering noise and to smoke. Fuller, plaintiff's employee, the boiler operator, heard the motor choking down and realizing something was in the motor, went to the motor and saw the end of a piece of canvas material sticking in the air intake in the bell-end of the motor. Fuller immediately turned off the motor and it was shut down for about five minutes. While the motor was stopped someone, probably one of defendant's employees, pulled the piece of canvas out of the opening, and the motor was then started again by either Fuller or Eymer, an employee of the installer of the boiler room equipment, who was present for the purpose of instructing Fuller in the operation of the equipment. Later that day one of defendant's employees placed a guard over the air intake. The motor ran without stopping or giving further trouble until February 10, 1955, a period of over fifteen months.
On February 10, 1955, the motor failed, whereupon plaintiff removed the bell-end of the motor and found a crumpled piece of canvas wound around the cooling fan blades at the bell-end of the motor where the air intake opening was located. This piece of canvas apparently had, by the operation of the motor, gradually accumulated dust and abraded the insulation causing the motor to burn out.
Arrangements were made that evening to start a standby boiler and the next day to have the damaged motor repaired. Although the burned out motor was at a repair shop for several days, the standby boiler was in operation after about eighteen hours.
The initial complaint for damages was filed in the district court on January 29, 1957, followed by an amended complaint on February 26, 1957. The amended complaint charges that "the burning out of said motor, and the stopping of said motor, and the damages flowing therefrom * * *, were solely and proximately caused by the presence of those certain pieces of scrap material then and there found [on February 10, 1955] to be present in the interior of said machine, said scrap material being that scrap material negligently and carelessly dropped by the authorized agents of the defendant, on or about the 22nd day of October, 1953 * * *." The amended complaint goes on to allege that as a direct and proximate result of such negligence (set out in detail in the complaint) plaintiff was damaged (1) in the sum of $214.16 for damage to the motor, (2) in the sum of $336.42 for direct expenditures, and (3) in the sum of $15,117.41 for loss of profit resulting from loss of production while the factory was down, praying for total recovery of $15, 667.99. Defendant filed its answer in three paragraphs, the first being a general denial of liability, the second alleging the defense of contributory negligence, and the third pleading the bar of the two-year statute of limitations.
The critical question in the appeal concerns the Indiana statute of limitations, Burns' Ind.Ann.Stat. § 2-602 (1946 Repl.) which reads in pertinent part as follows:
"The following actions shall be commenced within the periods herein prescribed after the cause of action has accrued, and not afterwards:
"First. For injuries * * * to personal property, * * * within two  years * * *." (Our emphasis.)
The negligence complained of occurred on October 22, 1953, the final stoppage of the motor and resulting loss of production on February 10, 1955; and the action was commenced in the district court on January 29, 1957.If the cause of action accrued on October 22, 1953, as defendant contends, it is barred by the foregoing statute. If it did not accrue until February 10, 1955 as urged by plaintiff, then the ...