Court Opinion

ID: 6235122
Source: CourtListenerOpinion
Date Created: 2022-02-17 20:30:45.840372+00
Date Added: 2024-06-11T08:58:01.388479
License: Public Domain

Mr. Justice Sharswood
delivered the opinion of the court, January 6 th 1876.
There can be no doubt that if this case stood upon a general arbitration clause in the policy alone, it would fall within the principle settled by this court, conformably to all the previous English authorities, in Gray v. Wilson, 4 Watts 41 ; Snodgrass v. Gavit, 4 Casey 224, and Lauman v. Young, 7 Id. 310; that it is not in the power of the parties to a contract to oust the courts of their jurisdiction.
The cases in which the certificate or approbation of any particular person — as the engineer of a railroad company — to the amount of a claim, is made a condition precedent to an action, rest upon entirely different principles. He is not created a judge or arbitrator of law and facts, but simply an appraiser of work done : Monongahela Nav. Co. v. Fenton, 4 W. & S. 205; Lauman v. Young, 7 Casey 306. In all these cases there is an actual reference, founded upon consideration, and therefore irrevocable. That which is before us, is a mere agreement to refer to arbitrators to be chosen at a future time.
Such an agreement, like any other agreement of reference, is revocable, though the party may subject himself to an action of damages for the revocation. It is not in the power of parties thus to oust the courts of their general jurisdiction, any more than they have to add to a personal covenant, that they are not to be responsible for a breach of it: Furnivall v. Coombes, 5 Mann. & G. 736. The Supreme Court of the United States have recognised the soundness of this general principle in Insurance Co. v. Morse, 20 Wallace 445, in which they held that an agreement by a foreign insurance company, in conformity with a state statute, that if sued in a state court they would not remove the suit into the Federal court, was invalid.
The contention, however, here is, that the special provision added in this policy to the arbitration clause, distinguishes this case from those cited. It declares that “no action, suit, or proceedings at law or in equity, shall be maintained on this policy, unless the amount of loss or dispute as aforesaid shall have been first thus ascertained.”
If, however, it was not in the power of the parties to oust the courts of their general jurisdiction, by such an agreement, that clause does not help them. Had a general arbitration clause been valid, it would have been a condition precedent to an action of itself; the provision in question is but the expression of that which was implied.
We are not to be understood as holding that this provision of the policy, which is special, not general, is entirely without effect. By its terms it was confined to “any difference or dispute that should arise between the insured and the company, touching the *481amount of any loss or damage.” But then it was incumbent on the defendants below, in order to avail themselves of it, to show that a dispute had arisen touching the amount of the loss. In other words, they must show that they admitted the validity of the policy, and their liability under it, and that the only question was as to the extent of the loss.
An examination of the case of Scott v. Avery, 5 House of Lords Cases 827, so much relied on by the defendants in error, will show that a majority of the opinions there went upon the ground that -it was a special, not a general arbitration, which was intended. The power to oust the courts of their general jurisdiction was expressly repudiated. Nothing of the kind appeared on the trial here; on the contrary, it rather seemed, from an offer of evidence made by the plaintiff, objected to by the defendants, and rejected, that one ground of defence was, that there had been a breach of one of the conditions .of the policy, by the non-endorsement of another insurance, which avoided the contract altogether.
Parties may agree that when the dispute is of the character of an account involving the examination of books, and the value of a large number of things, and the' extent of the damage, it shall be determined by three men as appraisers in effect — a much more appropriate tribunal for such a controversy than a jury.
Judgment reversed and procedendo awarded.