Port Blakely Mill Co. v. Springfield Fire & Marine Ins. Co.

• Decision Date: 06 August 1910
• Citation: Port Blakely Mill Co. v. Springfield Fire & Marine Ins. Co., 59 Wash. 501, 110 P. 36 (Wash. 1910)
• Court: Washington Supreme Court
• Parties: PORT BLAKELY MILL CO. et al. v. SPRINGFIELD FIRE & MARINE INS. CO.

110 P. 36

59 Wash. 501

PORT BLAKELY MILL CO. et al. v. SPRINGFIELD FIRE & MARINE INS. CO.

Supreme Court of Washington, En Banc.

August 6, 1910

On rehearing.

Opinion in department (56 Wash. 681, 106 P. 194) overruled, and judgment of trial court affirmed.

H. T Granger and Hughes, McMicken, Dovell & Ramsey, for appellant.

Hastings & Stedman, Walter S. Fulton, C. D. Sutton, and Titus & Creed(Dorr & Hadley, of counsel), for respondents.

DUNBAR J.

Action on fire insurance contract.Judgment was obtained in the superior court by the insured, respondents in this case, on a fire insurance policy issued by the appellant.An appeal followed, and the judgment was reversed by a majority decision of department 1 of this court, filed January 14 1910, to which reference is made for a statement of the case.56 Wash. 681, 106 P. 194.A petition for rehearing was filed addressed to the court en banc.Said petition was granted, and the case again argued, and it is now here for final determination by the whole court.

There were three contentions made by the appellant in the first argument of the case: (1) That the Detroit Trust Company could not have maintained this action; (2) that the policy was avoided by the breach of a warranty therein contained; and (3) that the automatic sprinkler system connected with the mill plant was not in working order at the time of the fire.It was stated in the opinion that each of these contentions had been considered, but that, in view of the conclusion reached on the second, the first and third would not be discussed.Inasmuch, however, as the first proposition lay at the threshold of the case and was determinative of the right to bring the action, the court must have decided that proposition against the contention of the appellant before it proceeded to the determination of the second proposition.In any event, we think the technical objection is without merit, for all the reasons urged by respondents.We have given painstaking consideration to the third proposition, for it involves the actual merits of this controversy.But from an examination of the long statement of facts, containing more than 600 pages, we are not convinced that the findings of the trial judge were not sustained by the weight of the evidence, and will therefore consider the case from the standpoint of such findings.

The sprinkler provision, appearing on a rider attached to the policy, was as follows: 'Warranted by the assured that due diligence be used that the automatic sprinkler system shall at all times be maintained in good working order.'Privilege was given the assured to make additions and repairs.The fourteenth and fifteenth findings of the court bearing on this proposition are as follows:

'(14) That on or about the 29th day of January, 1907, it became and was necessary, essential, and requisite to the business of the Port Blakely Mill Company that an addition, alterations, and repairs be made to that portion of said plaintiff's sawmill building, which was known as the lathmill, and on or about April 1st, 1907, it became and was necessary--in order to make the automatic sprinkler equipment more efficient, and in order to extend the automatic sprinkler equipment to the addition to that portion of said plaintiff's mill building known as the lathmill, and in order to have all of said sawmill building, including said lathmill, protected by automatic sprinkler equipment--to make additions, alterations, and repairs to what was known as the No. 3 automatic sprinkler division in the easterly portion of said sawmill, and that accordingly, on or about the 29th day of January, 1907, the plaintiff, Port Blakely Mill Company, commenced the work of making said addition, said alterations and repairs to said lathmill, and on or about April 1, 1907, commenced the work of altering, repairing, and extending said No. 3 automatic sprinkler division to the new portion or addition to said lathmill, and for that purpose, it was necessary, essential, and requisite that the water be wholly turned off of said No. 3 automatic sprinkler division, and that said repairs and alterations could not be made to said sprinkler division and said extensions thereof could not be made, unless the water was turned off of said division.That said repairs could not safely be made while said plaintiff's sawmill was in operation; that plaintiff, Port Blakely Mill Company, on or about April 1, 1907, had progressed with the work of said additions, alterations and repairs to said lathmill sufficiently to enable it to operate said lathmill, and accordingly the lathmill was put in operation after said date.That said Port Blakely Mill Company continued with the work of making said repairs and alterations and extensions to said sprinkler division with due diligence, and at all times used due diligence that the automatic sprinkler system should at all times be maintained in good working order; and on April 21, 1907, the said alterations, repairs, and extensions to said sprinkler division were so far completed that the water was wholly turned on in said sprinkler division No. 3.That said water was turned on until and during said fire, No. 3 automatic sprinkler system, and all other divisions of said plaintiff's sprinkler system in said mill, were supplied with water in such quantities and with such pressure, that the heat produced by said fire in and about said mill did melt and release 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 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.

'(15) That said fire originated under what was known as sprinkler division No. 4 in said sawmill building of said Port Blakely Mill Company immediately to the westerly in said mill building of said sprinkler division No. 3 aforesaid; and said fire did not originate in said sprinkler division No. 3 aforesaid; said fire originated at what was known as the friction pulley of and under the burner conveyor on the main floor beneath the sawing floor of said sawmill, and spread immediately on belts and pulleys above the sawing floor to the roof of said sawmill building, causing the sprinklers in the roof of said mill to operate as the fire reached the roof; but said fire rapidly spread beyond the control of said sprinklers.'

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 condition 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 everyday 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 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 employed, but of the evident object of the contract, 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 appears that such was the intention of the contracting parties, and that the effect of the language of the contract was well understood by them when the contract was entered into; and it ought in reason to be a sign to the court that there has been a misapprehension on the part of the contracting party whose rights are thus contracted away; that the contract was not understood.Especially is this true in this character of contracts, where the language of the contract is the language of the insurance company whose duty it is to see to it that, where unreasonable and onesided provisions are incorporated into a contract, the contract is understandingly entered into.

This was the rule of interpretation indorsed by this court in Poultry Producers' Union v. Williams,107 P 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...