stated my reasons for that opinion in the case of Thompson v. Hopper,* I beg to refer to that case instead of repeating them again. Judgment for plaintiff on the seventh plea; for defendant on the fourth plea.

APPENDIX No. 5.

ARBITRATION CLAUSE IN A MUTUAL POLICY PERMITTED TO BE A CONDITION PRECEDENT TO AN ACTION.

SCOTT v. AVERY.

House of Lords, July, 1856.

In this case, which was a writ of error brought to reverse a judgment of the Court of Exchequer Chamber, reversing a decision of the Court of Exchequer, the Lord Chancellor delivered judgment.

The case came before the Court of Exchequer on demurrer to four pleas in an action brought by the plaintiff on three policies of insurance effected on the ship Alexander, which were underwritten by the defendant. It appeared that both the plaintiff and the defendant were members of three mutual insurance associationsnamely, the Newcastle General A 1 Assurance Association, the Tynemouth A 1 Assurance Association, and the Ocean Insurance Association. The declaration stated the fact of the policy of insurance having been made between the plaintiff and the defendant and other members of the association, and after setting out the policy alleged that it was mutually agreed that all the rules and regulations of the said association should be binding upon the assured and assurers, as if they were inserted in the policy and formed part thereof. The rules and regulations, so far as they were material to the plaintiff's claim, were as follows:-" That any member who shall prove to the committee of the association that his ship is lost will be entitled (at the expiration of two months from the date of the first quarterly settlement) to part payment of the same, but in no case to exceed 801. per cent. on the sum insured until a final account of the proceeds of the sale of the materials is furnished to the underwriters. That the sum to be paid by this association to any suffering member for any loss or damage shall, in the first instance, be ascertained and settled by the committee, and the suffering member, if he agrees to accept such sum in free satisfaction of his claim, shall be entitled to demand and sue for the same as soon as the amount to be paid has been so ascertained and settled, but * Ante, p. 457.

not before, which can only be claimed according to the customary mode of payment in use by the society." It then alleged the performance by the plaintiff of his contract, the loss of the ship, and that the defendant and the committee were to ascertain the loss and pay it, but that they had not done so. There were similar counts against the two other associations. The defendant's plea was, that the plaintiff had not complied with the rules of the association, which compelled members to refer matters of amount in dispute to arbitration, and his refusal to do so had caused the non-settlement of his claim. The plaintiff demurred to the plea on the ground that it was bad in law, and that a compliance with the regulations of the association was not a condition precedent to his bringing an action, which accrued on the policy on the loss of the vessel, and that the rules in question were inconsistent with the policy, and therefore void. On the other hand, the defendant contended that the contract with the conditions included was an absolute contract, and ought to prevail, unless contrary to law, which it was urged it was not. The Court of Exchequer gave judgment on the demurrer for the plaintiff, holding that the plea was bad, and that judgment having been reversed by the Exchequer Chamber, the present writ of error was brought before their Lordships, who heard the arguments, the learned Judges being in attendance. At the conclusion of the arguments, the Lord Chancellor put the following question to the learned Judges for their consideration-namely, whether, looking at the record in this case, judgment should be entered for the plaintiff in error or the defendant in error. The learned Judges, after having taken time to consider the question, differed in their opinions, the majority, however, being in favour of the affirmation of the judgment of the Court of Exchequer Chamber.

THE LORD CHANCELLOR, now, in giving judgment, said the writ of error in this case had been brought upon a decision of the Court of Exchequer Chamber in an action brought upon a policy of insurance which had been underwritten by the defendant. The only material plea was the fifth, setting forth one of the rules of the association, which was, that, if any difference should arise among the members, the member dissatisfied should select an arbitrator, and if the committee were not satisfied with the person appointed they should select another arbitrator, and these two should select a third, who was to determine the matters in dispute and the sum to be awarded, and that no action should be brought until such arbitration had taken place. The Court of Exchequer decided that the plea was bad, and was no answer to the action. That decision was reversed by the Court of Exchequer Chamber, and the latter judgment was now brought before their Lordships' House. It appeared to him merely a matter of the construction to be put upon the policy itself, for there was no doubt that persons could not by contract oust the Court of its ordinary jurisdiction. That point had been decided in many cases, but there was no principle of law which prevented parties from

entering into any contract that no right of action should accrue until after a reference had been made to an arbitrator. If he (the Lord Chancellor) covenanted with A. not to do a particular act, and it was agreed between them that any question which might arise should be decided by an arbitrator without bringing an action, then a plea to that effect would be no bar to an action; but if they agreed that J. S. was to award the amount of damages to be recoverable at law, then if such arbitration did not take place no action could be brought. Now, in the present case did any right of action accrue until the amount of damage had been ascertained by arbitration? He thought clearly not; the condition precedent to the right of a member bringing an action for the recovery of his insurance was that the amount of the sum was to be ascertained by arbitration, and by no other means. It had been urged that there were other matters than the amount of damages for the arbitrator to decide; but he did not think that altered the case at all, although the learned Judges had differed in their opinion. He was therefore of opinion that the judgment of the Court of Exchequer Chamber, in reversing the judgment of the Court of Exchequer, was correct, and he had therefore to move their Lordships that the judgment of the Court below be affirmed.

LORD CAMPBELL said he had heard the case very fully and ably argued at the bar of the House, and he had carefully read over the opinions of the learned Judges. He had taken no part in the decisions in the Courts below, and he came to the same opinion with his noble and learned friend on the woolsack, it appearing to him that upon principle and without overturning any authorities their Lordships ought to affirm the judgment of the Court below. Now, it appeared to him in the first place that the contract between the shipowner and the underwriter in the present case was quite clear-as clear as the English language could make it-that no action should be brought against the insurer until an arbitrator had disposed of any dispute which might arise between them. That was declared to be a condition precedent to the bringing of any action, and was no doubt the intention of the parties at the time. He (Lord Campbell) was of opinion that this embraced not only an assessment of damages, but any dispute which might arise between them. That being the intention of the parties, was the contract illegal? It was declared to be contrary to public policy. That was rather a dangerous ground to go upon. What pretence was there for saying that because this association wished to avoid being distressed by continual actions, and preferred referring disputes to a domestic and private tribunal among themselves, that they had no right to do so? That would be most inexpedient, and would be a violation of the liberty of the subject. He could see no ill consequences, and he saw great advantages, from the practice. Public policy, therefore, seemed to require that the contract should be declared valid. He knew that great obstacles had been thrown

by the Courts in the way of proceeding by arbitration, but with all respect to his learned predecessors, he would let their Lordships into the secret of their doing. There was no disguising the fact, which was that formerly the chief part of the Judges' salaries depended upon fees, and there was a great desire therefore to have as much business as possible brought into Westminster Hall. One description of procedure took causes into the Court of Queen's Bench, another into the Common Pleas, and a third into the Exchequer, but arbitration took them out altogether, and therefore robbed the Judges. In the present case, the arbitration not having taken place, the Courts were not ousted of their jurisdiction, for the cause of action did not accrue. While this case had been going on he was happy to say that the question had been substantially decided in the Court of Exchequer during last Hilary Term, in the case of Brown v. Overbury, reported in the 11th Exchequer Reports, page 715. That was an action on a horse-race. The plaintiff, who had contributed to the sweepstakes, said that his horse had won the race, and he brought his action against the stakeholder to recover the amount of the stakes; but it was a condition in the race that the stewards should decide who was entitled to the stakes. It turned out that the stewards had not decided, for they differed in their opinion. Then he attempted to show that his horse had won the race, but the learned Judge presiding at the trial held that he could not prove that, because, even if the horse had won, the action could not be brought until the question had been decided by the stewards. It was then taken before the Court of Exchequer, which decided that the ruling of the learned Judge was correct, and the nonsuit was confirmed. The present case was upon the same principle, and he considered the decision he had just mentioned as a strong authority in point, and calculated to remove any scruples which their Lordships might have in confirming the judgment of the Court of Exchequer Chamber, which reversed the judgment of the Court of Exchequer.

THE LORD CHANCELLOR then stated that Lord Brougham, who was absent from illness, had requested him to state that he entirely concurred in the opinion which had been just expressed by his noble and learned friend and himself.

The judgment of the Court of Exchequer Chamber was then affirmed with costs.

APPENDIX, No. 6.

SENDING BACK AN AWARD.

J. G. MORRIS v. R. MORRIS.

Queen's Bench, May, 1856.

WIGHTMAN, J.-I am of opinion that this rule ought to be discharged.

With respect to the first point, I think the terms "as aforesaid" in sect. 8 include all references provided for in the previous sections, and therefore that section applies to a reference by consent provided for in sect. 5, notwithstanding the intermediate sect. 6 begins a new head of arbitration, and sect. 7 has the words " as aforesaid." Therefore the Judge had power to send back the award to the arbitrator.

Secondly, it is said that the arbitrator misconducted himself in not giving notice of a meeting and hearing the parties. But the object of sending back the award was not that the parties should attend before him, but that he should put that right which on the face of it was wrong; and he has not done more. In the original award he ordered that the parties should pay the costs which he himself ascertained in equal moieties. In the supplemental award he leaves the costs to be taxed by the officer of the Court, which is what he ought to have done before. The supplemental award is the same in substance as the original, though more formal.

As to the other point, the submission provided expressly, that "in case of any motion to set aside the award," the Court might remit the matters referred; but that provision does not restrain the general power to send back the award under sect. 8 of the statute, and it may be considered mere surplusage.

ERLE, J., concurred.

CROMPTON, J.-The first question is of general importance; and on moving for the rule nisi to show cause, I was afraid that there was an important omission in the statute; but on looking into the sections, it is quite clear. I am satisfied that sect. 8 is not confined to references under sect. 6, but applies to all others previously treated of: therefore it applies to a submission by agreement of the parties.-Rule discharged.

* Lord Campbell, C. J, was absent.