Provided also that if any difference shall arise between the Company and the Insured it shall be referred to arbitration as a reference by consent out of Court under the Arbitration Act, 1889, or any amendment thereof.

Provided lastly and it is hereby expressly agreed and declared, and the true intent and meaning hereof is, that the Capital Stock and Fire Funds of the said shall alone be answerable

under this Policy; and that no Holder or Holders of any share or shares in the said Capital Stock shall be liable beyond his or their share or shares thereof, anything contained in this Policy to the contrary notwithstanding.

In witness whereof I, the undersigned, one of the Directors of the said Society, have hereunto set my hand this

day

General Manager.

CHAPTER V.

DISPUTES AND ARBITRATION.

ALTHOUGH the stringency of fire policy conditions is often relaxed in practice where an insistence upon them would do less than justice to the insured and lead to disputes, these conditions should nevertheless be regarded most seriously by policy holders. Their binding character is beyond doubt, and in order to show how a condition which had become unreasonable was still maintained by the courts I would refer the reader to the case of "Wood and Others v. Worsley" in 1795.

In this case a Phoenix policy provided that in the event of a fire "persons insured should give notice of the loss forthwith, deliver an account, and procure a certificate of the minister, churchwardens and some reputable householders of the parish, importing that they knew the character, etc., of the assured and believed that he really sustained the loss and without fraud". The minister and churchwardens refused to sign the certificate and the plaintiffs alleged that the refusal was wrongful and unjust.

The jury found that the minister and churchwardens did wrongfully refuse to sign, gave a verdict for the plaintiffs and negatived fraud.

Now comes the point. On a motion for a new trial the judges were divided in opinion, and on an appeal in error to the King's Bench the judgment was reversed and the court held that the production of the certificate laid down in the policy was a condition precedent and that it was immaterial that the minister and churchwardens refused to sign it. The document must be forthcoming or the evidence in support of the claim was incomplete.

That decision was no doubt good in law as it has stood ever since, but it will strike an ordinary layman as flagrantly unjust. In fact any fire insurance company which nowadays interpreted its conditions in such a spirit would very properly deserve to be pilloried and to find public support withdrawn from it. But the fact that in law the policy conditions are binding in the strictest sense makes it all the more important that they should be framed in a manner which shall be just both to the insurance companies and to the insured.

The above condition about the certificate of minister and churchwardens has long since been abandoned, and a case occurred in 1844 which showed that the fire offices had learned the undesirability of enforcing it. In that year a man named Nash, insured with the Sun Office, could not obtain such a certificate, and much discussion arose in the press on account of the hardship the condition imposed on Dissenters. The Sun rose to the equity of the matter and announced in November, 1844, that the certificate of minister and churchwardens which

had rarely been required would in future be dispensed with altogether, and that policy holders could have their policies endorsed accordingly. By abandoning the requirement the Sun allowed the claim of Nash to be proceeded with and he obtained a verdict for a small part of his alleged loss. I think that every one will agree that the Sun Fire Office in this matter showed a very fair spirit. The same spirit still inspires the managers and directors of fire insurance companies, but the liberality of insurance offices does not release the public from the necessity of studying and understanding the contracts of insurance which they effect.

DETERMINATION OF Loss.

No subject in fire insurance is more important than that of the determination of losses by fire and the avoidance of serious disputes. A company desires to pay the exact loss or damage done, no more and no less. It does not desire to get the better of the insured. Some people have written of fire insurance as if the companies had for one of their main objects the "doing" or "besting" of the insured. But no one who has any acquaintance with the business accepts this view for one moment. The boot is on the other leg. If anything, the companies, in their desire to avoid disputes and to keep their good character with the public, pay claims in excess of those strictly due, and it may be contended by doing so they encourage extortion and, possibly, incendiarism. For it is just as much their duty to protect

the careful honest insured from having to pay for the dishonest ones as it is to indemnify fully those who suffer from loss. The difficulty is to hold the balance true.

Let us devote our attention to the assessment and settlement of losses and to the important subject of disputes and their reference to arbitration.

After a loss or damage has been notified and the representative of a company has proceeded to the spot, his first duty is to take every possible step to prevent further loss. It is also the duty of the persons insured to take similar precautions in their power. When this has been done the cause of the fire should immediately be ascertained. It may have originated from design, carelessness, or by spontaneous combustion or an explosion outside the protection of the policy. Any suspicious circumstances have to be looked into discreetly and cautiously but without delay, for even a Sherlock Holmes could not do much if the traces of incendiarism had been covered up. The important thing is to get a report from the first person who was upon the ground as to what he saw. The possibility of fraud is always present, and some light may be thrown upon a doubtful case by ascertaining whether a building was occupied or vacant at the time of a fire, whether it was profitable to the owner or tenant, whether it was for sale or subject to litigation, whether mortgaged or about to be, if mortgaged whether subject to present or pending foreclosure, and so on. The fact to be determined is whether the insured stood to gain by