parties. Insurance contracts, like all other contracts, should be construed with reference to what the parties meant when interpreted in the light, not only of the language employ lease said sprinkler heads attached to said No. 3 automatic sprinkler division and all other parts of said sprinkler system in said mill, and permitted the water to flow through the same and out through the pipes distributed, but of the evident object of the contract, ed throughout said mill, and caused said water to be sprinkled upon said fire. That said sprinkler system in said mill, in all its parts and divisions, was in good and thorough working order at the time of and during said fire. the benefits secured on one hand, the perils or risks sought to be avoided on the other. They should not be so construed as to work a forfeiture of either party's rights, or to defeat the very object of the contract for which a price has been paid, unless it plainly ap"(15) That said fire originated under what pears that such was the intention of the conwas known as sprinkler division No. 4 in said tracting parties, and that the effect of the sawmill building of said Port Blakely Mill language of the contract was well understood Company immediately to the westerly in said by them when the contract was entered into; mill building of said sprinkler division No. 3 and it ought in reason to be a sign to the aforesaid; and said fire did not originate in court that there has been a misapprehension said sprinkler division No. 3 aforesaid; said on the part of the contracting party whose fire originated at what was known as the rights are thus contracted away; that the friction pulley of and under the burner con- contract was not understood. Especially is veyor on the main floor beneath the sawing this true in this character of contracts, where floor of said sawmill, and spread immediately the language of the contract is the language on belts and pulleys above the sawing floor of the insurance company whose duty it is to to the roof of said sawmill building, causing see to it that, where unreasonable and onethe sprinklers in the roof of said mill to op-sided provisions are incorporated into a conerate as the fire reached the roof; but said tract, the contract is understandingly enterfire rapidly spread beyond the control of said ed into. sprinklers." This was the rule of interpretation indorsed by this court in Poultry Producers' Union v. Williams, 107 Pac. 1040, referred to by appellant in its reply brief in support of the contention that it was the settled law of this state that the breach of a warranty rendered the policy void even though the breach may have ceased at the time of the loss. Of course, the ordinary expression was indorsed that the truth of a warranty is a condition precedent, and there is no real objection to this statement if it means that the insured intended the representation to be a warranty which would render his contract void wheth to render a decision valuable on any given point, it is necessary to be informed what the case was which the court was deciding, and to construe the language used with reference to the facts discussed. That was an action by one Williams, an employé of the Poultry Producers' Union, who was after So that it must be conceded that there was no lack of diligence; that the sprinkler system was in operation at the time of the fire; that the violation of the contract, if there was any violation, was not the cause of the fire, and that the fire did not even originate in the sprinkler division where the repairs had been made. It must therefore readily be seen that, if our former opinion is sustained, it will not be upon any equitable ground, but by reason of sustaining the hard and inflexible rule contended for by appellant, that the covenant or agreement in this case amounted to a warranty or a statement of a conditioner it was the cause of the loss or not. But precedent, a temporary violation of which would preclude a recovery, even though it affirmatively appear that such temporary suspension was not in existence at the time of the fire and could not possibly have been the cause of the fire. This rule seems to be opposed to our primary conception of fair dealing, is not practiced or tolerated in our every-wards made secretary, treasurer and manager day affairs with each other, is not a commendable rule of action under any circumstances, and is diametrically opposed to the general rule that only such damages can be recovered from the breach of a contract as are shown to be the result of such breach. This rule has stood the test of time, because it is based upon common sense and fair dealing, and no court has ever felt called upon to apologize for it or distinguish it out of existence. Of course, it is fundamental that courts cannot make contracts for parties, and it follows that they must enforce such contracts as are made; but, in interpreting contracts, they should not be bound by hard and fast rules or definitions which evidently were never within the minds of the contracting of the company. In this position a fidelity bond was required, and an application was made and signed by the president of the company. Among other questions asked and answered were the following: "(13) When were his accounts last examined? A. September 11, '07. (14) Were they at that time in every respect correct and funds on hand to balance? A. Yes. (15) Is there now or has there been any shortage due you by bondsmen? A. No." And the application contained the stipulation that: "It is agreed that the above answers are to be taken as a condition precedent and as the basis of the said bond applied for." It was further conditioned that, "if the employé's written statement herein before referred to shall be found in it has never consented to the violation and the violation is such that the company would, had it known of it at the time, have declared a forfeiture therefor." But this question has been decided by this court in Hart v. Niagara Fire Ins. Co., 9 Wash. 620, 38 Pac. 213, 27 L. R. A. 86, and decided on principles applicable to and necessary to the decision in this case. In that case the stipulation was as follows: "It is understood and agreed that during such time said mill is idle, or not in operation, a watchman shall be employed by the insured, to be in and upon the premises constantly, day and night." any respect untrue, this bond shall be void." It occurred that the answers to some of the pertinent questions were not true, and the insurance company resisted the payment of the policy on that ground; and the court said, in passing upon the question: "Whether the answers made by the applicant for a policy of indemnity or insurance are warranties or mere representations must depend upon the character of the question and its answer, the opportunity of the insurer to guard against the representation in the light of its consequences, or whether it is material to the risk." It will be seen that in that case the company had no way to guard against the The contention of the appellant was that representation; that it certainly was mate- the terms of the policy constituted the measrial to the risk, and continued to be material ure of the insurer's liability and, in order to the risk, for it affected the reputation and to recover, the insurer must show himself character of the party upon whom the risk within these terms. In other words, the comwas placed. This was a risk that would be pliance of the insured with the terms of the a continuing risk running throughout the life contract was a condition precedent to the of the insurance, a different proposition al- right to recover, and the court instructed together from the one at bar, where, if there the jury that, if they believed from the evihad been a violation of a condition at some dence that at any time during the existence time past, such violation had ceased at the of the policy the assured failed to keep a time of the loss, and could not possibly, in watchman while the mill was not in operaany event, have had any effect upon the loss. tion, plaintiffs could not recover, adding "unIn this connection counsel for appellant al- less you further find from the evidence that so relied upon Hoeland v. Western Union said fire was not due to, or the result of, Life Ins. Co., 107 Pac. 866. That, also, was their failure to keep such watchman." That a case where the defense was meritorious, instruction was sustained by this court. The the risk having been taken on representa- stipulation or representation made in that tions concerning the health of the applicant, case was as strong as the representation and it afterwards appearing that the repre- made in this case, with the exception that sentations were not true the company refus- the word "warranted" is used in the case at ed to pay the policy. There could have been bar, instead of the words "it is understood no suspicion of the violation of the represen- and agreed." Here it is "warranted" that tations in this case, for if the representations due diligence be used that the automatic were not true, as we have just remarked in sprinkler system shall at all times be mainthe other case, their effect would be to fol- tained in good working order. There it was low the risk through the life of the assured, "understood and agreed" that such and such and to finally effect the loss. It is true that things should be done. In our judgment the the court, in discussing the case, said: "The word "warranted" adds nothing to the force rule is that when a representation made by of the stipulation. It is well understood-in an applicant for insurance is carried into a fact, it is conceded-that the expression of contract and expressly made a part of it, it the word “warranty" does not necessarily becomes a warranty, and its materiality is constitute a warranty; that there may be settled by the agreement of the parties"-cit- warranties without the use of the word; ing Elliott on Insurance, § 102. But that that there may not be warranties when the statement must have been made with refer- word is used. In Charles Dickens' Child's ence to the facts in the case, and the writer History of England, in a review of the charof the opinion could not have meant to con-acter of Lord Dunstan, the author said that, vey the idea that it would apply to all cases after he died, the people called him a saint; even where there was a discontinuance of but naïvely remarked that calling him a the violation, for the same authority cited, saint did not make him a saint, any more viz., Elliott on Insurance, in section 205, ex- than calling him a coach horse would make pressly says that such is not the rule under him a coach horse. And so it is with the the weight of authority. Section 205 is as stipulation in this case. The word "warranfollows: "The decisions are conflicting upon ty" is of such general signification and of the question of a violation of a condition in such general and discursive use that the exa fire insurance policy. The weight of au- pression as used here is absolutely without thority seems to support the view that a vio- any legal signification. It is common for lation of a condition that works a forfeiture people in ordinary conversation to say that of the policy merely suspends the insurance "I will warrant this" or "I will warrant during the violation and if the violation is that," or "I warrant this," "I warrant you" discontinued during the life of the policy and that so and so will happen, or will not hapdoes not exist at the time of the loss, the pol-pen, when there is no intention whatever on make good the expression. The rule of con- at which this policy is written it is expressstruction must be that the word used is to ly stipulated and made a condition of this be construed in its ordinary signification. contract that this company shall be liable The legal signification may have been under- for no greater proportion of any loss than stood by the insurance company when it em- the amount hereby insured bears to seventy ployed this word, but in order to avail itself per cent. of the actual cash value of the of such legal signification, it must appear property described herein at the time when that the other contracting party also under- such loss shall happen, nor for more than stood it. While there may have been some the proportion which this policy bears to the things said in the discussion of the Hart total insurance thereon." The term "made Case, as there generally is in the discussion a condition of this contract" is probably of cases, which were not material to the de- equivalent to a stipulation that the contract cision of the case, a review of it will show shall be void if the condition is violated. beyond question that the essential idea in Again, there is the following stipulation: the case was the same as the essential idea "This entire policy shall be void if the insurhere, viz., whether, by reason of a breached has concealed or misrepresented, in writwhich did not continue, the policy was avoid- ing or otherwise, any material fact or cired. The court, in discussing the case, said: cumstance concerning this insurance, or the "In an ordinary contract no damages can be substance thereof; or if the interest of the recovered by reason of the breach if the insured in the property be not truly stated breach does not result in damage. In this herein; or in case of any fraud," etc. There case if the rule contended for by appellants would be nothing unconscionable in construshould prevail, if the respondents had failed ing such provisions or stipulations in a conor neglected to keep a watchman for one day, tract of this kind as warranties, for the conand the mill had not burned for a month cealment or misrepresentation of any fact afterward, and it positively appeared that would work an actual hardship upon the inthe fire was in no way attributable to such surance company. Again, it is provided: “If neglect or breach, the company could escape a building or any part thereof fall, except as its liability by reason of a breach which was the result of fire, all insurance by this policy entirely immaterial and which in no way on such building or its contents shall imme contributed to the damage." It will be seen diately cease"-another reasonable provision that this language is especially applicable which is stated so definitely that there is to the case at bar, where it appears affirma- left no room for controversy as to what was tively from the findings of the court that the meant. Again: "This policy may by a refire was in no way attributable to the breach newal be continued under the original stipu in relation to the maintaining of the sprink-lation, in consideration of premium for the ler system, and that such breach had been renewed term, provided that any increase of corrected before the fire. Again, it was said hazard must be made known to this compa in that case, that "the rule is universal that statements contained in the application willy at the time of renewal or this policy shall not be construed to be warranties if else- be void"-another positive expression con where in the contract there can be found reason to suppose that such was not the clear understanding of the parties"; and the court proceeded to show by other provisions of the contract that such could not have been the understanding. So in this case, as showing that it was not the intention of the contracting parties that the representation in regard to the sprinkler should not work a forfeiture of the contract or render it void, there are certain statements or provisions and representations made in the contract in which it is especially provided that a forfeiture or avoidance of the contract shall be the result. For instance, in the watchman clause, after stating as does the sprinkler clause, that “it is warranted by the insured that whenever any of the following named parts of the plant," etc., shall be idle, it is stated that, "if any of the above-named parts is idle or not in operation for a period of more than thirty days without the written consent of the company, this policy shall be void." The same provision substantially is in the "reduced rate average clause," the language being: "In consideration of the reduced rate In the cerning the avoidance of the contract, based expression used in this representation relied upon and the form of expression used in the other representations which we have noticed, and considering the relation of the stipulation discussed to the other parts of the instrument, it must appear that it was not the intention of the parties to constitute the representation a warranty. That case has stood as the law of this state since its announce ment in October, 1894, up to the time that the opinion was rendered in this case, and should not now be abrogated without being specially overruled. that warranties are a part of the policy, it may be laid down as the well-settled rule that, subject to qualifications to be discussed hereafter, all statements regarding the risk, contained in or appearing on the face of the policy, are warranties." But the qualifications thereafter discussed render the rule announced almost without value, for no court has gone to the extent of holding that all statements regarding the risks contained in or appearing on the face of the policy are warranties; and the cases cited by Cooley to sustain the announcement made in the text treat mostly upon the qualifications which are mentioned in the citation, and hold almost uniformly that, where there is any doubt as to whether a statement in an insurance policy is an express warranty, the court should lean against that construction which imposes upon the assured the obligation of a warranty. In one of the cases cited, National Bank v. Union Ins. Co., 83 Cal. 497, 26 Pac. 509, 22 Am. St. Rep. 324, it was held that, although the Code of that state provided that a statement in a policy of a matter relating to the person or thing insured or to the risk as a fact is an express warranty, if taking the entire policy in all its terms and language it can be seen that such was not the intention of the parties, the statement of fact cannot be deemed an express warranty. Redman v. Hartford Fire Ins. Co., 47 Wis. 89, 1 N. W. 393, 32 Am. Rep. 751, does not, either in principle or in the facts, sustain the opinion. There the court laid down the general rule that a stipulation in an application for fire insurance should be construed in a doubtful case most strongly against the insurer by whom it was framed; and that, in a doubtful case, that construction of a contract which will save it is to be preferred to one which will destroy it; that the use of the word "warranty" in a contract does not necessarily control its But, in view of the fact that we are called upon to overrule an opinion announced by a department of this court, we will examine the authorities generally, and especially those relied upon in the opinion to sustain the decision, with a view to ascertaining if the cases cited, in consideration of the facts of the cases which were before the court, actually do sustain the appellant's contention. In the first case cited, viz., Daniels v. Hudson River Fire Ins. Co., 12 Cush. (Mass.) 416, 59 Am. Dec. 192, it will be found that it was expressly stipulated that, under certain conditions, the insurance should be void and of no effect. In addition to the fact that the policy provided that, if any misrepresentations were made, the policy should be void and of no effect—a statement which is not in the provision under discussion, the decision was against the contention of the insurance company, the court saying: "The defendants, relying upon a violation of the statements in the application, contended that these statements were warranties or conditions, and if they were not strictly and literally true at the time of the application, that the policy was void; and that if they were then true, and the plaintiffs afterwards ceased to comply with them, the policy thereupon became void, whether the same were or were not material to the risk. But the presiding judge instructed the jury, that the state- construction; there may be a warranty withments of the application were not warranties, requiring an exact and literal compliance, but that they were representations; and as such, must have been substantially true and correct as to things done, and existing, at the time the policy was issued, and that so far as they related to the future -to the things to be done, and rules and obligations to be observed-they were stipulations, to be fairly and substantially complied with." The Supreme Court said: "The court are of the opinion that, looking at the policy and the application, this instruction was correct." Then follows a portion of the quotation set forth in the opinion: "There is undoubtedly some difficulty in determining by any simple and certain test what propositions in a contract of insurance constitute warranties, and what representations." In Cooley's Brief on Law of Insurance, p. 1133, that author says: "In accordance with out the use of that word, and its use will not always create one; that the stipulation in the policy, that the application shall be considered a warranty by the insured, must be construed to mean such a warranty as is stipulated in the application itself. In that case, in answer to the question, "What material was used in lubricating the machinery?" the assured answered: "Lard and sperm oil;" and to the questions whether the machinery was regularly oiled, and, if so, by whom and how often, the answer was: "Yes, by engineer and miller, as often as necessary." The proof was, that during the whole life of the policy, an oil known as "Fire Engine Oil" was constantly used in the mill for lubricating purposes, and that the machinery was not usually oiled by the engineer or miller, but by another person specially employed by plaintiffs for that purpose. The circuit court held that the an he null and void and all payments made thereon shall be forfeited to the company." Notwithstanding this strong expression on the part of the appellant, the court held that, in the absence of explicit, unequivocal stipulations, requiring such an interpretation, it should not be inferred that a person took a and continued undertakings in the nature of signed that this application shall form part express warranties, and that the failure by of the contract of insurance, and that if there the plaintiffs to use lard and sperm oil, and be in any of the answers herein made any to have the machinery oiled by the engineer untrue or evasive statements or any misrepand miller invalidated the contract of insur-resentation or concealment of the facts then ance, and released the defendant from any any policy granted upon this application shall and all obligations under it, and the plaintiff was nonsuited. This judgment was reversed by the Supreme Court, the court saying: "The stipulation was framed by the insurer, and had it been intended to require the insured to go beyond the interrogatories and disclose facts not called for therein (if any existed) material to the risk, a general in-life policy with the distinct understanding terrogatory calling for such facts would have been inserted; or, at least, the stipulation would have been framed to express that intention more clearly. We cannot assume that the insurer would leave its intention in that behalf to rest in uncertain and doubtful inference, when it was so easy to express it clearly and unmistakably." In Wood v. Hartford Fire Ins. Co., 13 Conn. 533, 35 Am. Dec. 92, while the court laid down and indorsed some of the most radical rules, going so far as to state, that any statement or description, or any undertaking on the part of the insured on the face of the policy which relates to the risk, is a warranty, and that whether this is declared to be warranty totidem verbis or is ascertained to, be such by construction, is immaterial; that in either case it is an express warranty and a condition precedent; yet, as we have before indicated, to avoid the harshness of this rule, the court discriminated the facts in the particular case involved and decided the case in favor of the plaintiffs. that it should be void, and all premiums paid thereon forfeited if at any time in the past, however remote, he was, whether conscious of the fact or not, afflicted with some of the diseases mentioned in the question to which he was required to make a categorical answer, saying that: "If those who organize and control life insurance companies wish to exact from the applicant, as a condition precedent to a valid contract, a guaranty against the existence of diseases, of the presence of which in his system he has and can have no knowledge, and which even skillful physicians are often unable, after the most careful examination, to detect, the terms of the contract to that effect must be so clear as to exclude any other conclusion;" and reversed the judgment of the lower court which held that he could not recover. Wood on Fire Insurance simply states the general rule which is contended for by the appellant, only as decided by certain cases. We have been unable to obtain Marshall on Insurance, but as near as we can gather from quotations, In Moulor v. American Life Ins. Co., 111 the harsh and inflexible rule sought to be U. S. 335, 4 Sup. Ct. 466, 28 L. Ed. 447, the invoked by the appellant has been supported court reaffirmed the doctrine that, when a by courts which drew their conclusions from policy of insurance contains contradictory this old work from which a majority of the provisions, or has been so framed as to leave courts have receded. In McKenzie v. Scotroom for construction, rendering it doubtful tish Union & N. Ins. Co., 112 Cal. 548, 44 whether the parties intended the exact truth Pac. 922, the decision was based upon an abof the applicant's statements to be a condition solute condition stipulated, and with the stipprecedent to any binding contract, the court ulation that, if the building should remain should lean against that construction which shut down for more than 30 days without noimposes upon the assured the obligations of a tice, the policy should be null and void. The warranty. This contention arose out of an- condition was broken without any excuse, swers to certain interrogatories in relation to and the court held that the provision was a the health of the applicant and the health of warranty. In Imperial Insurance Co. V. his ancestors, he having answered that his Coos County, 151 U. S. 452, 14 Sup. Ct. 379, father, mother, brothers, or sisters had not 38 L. Ed. 231, the policy provided that it been afflicted with consumption or any other should become void if, without notice to the serious family disease such as scrofula, in- company and its permission indorsed thereon, sanity, etc., since childhood, and that there mechanics were employed in building, alterwere no circumstances which would render ing, or repairing, and it was held that a vioan insurance on his life more than usually lation of this worked a forfeiture of the polihazardous. He also answered that as an ap-cy under the express stipulation of the policy plicant he "reviewed the answers to the fore-that "this policy shall be void and of no efgoing questions, clearly understood them, fect if without notice to this company. and and reaffirmed the answers"; and at the permission therefor in writing indorsed hereclose of the series of questions was the fol- on, the premises shall be used or occupied so lowing stipulation: "It is hereby declared as to increase the risk or the risk be inand warranted that the above are fair and creased by any means within the knowledge true answers to the foregoing questions, and or control of the assured or if mechanics are it is acknowledged and agreed by the under-employed in building, altering or repairing |