Ex. CH.]

that those who drew the rules intended that there should in all the inquiries be a judicial investigation before a tribunal, which is therefore a judicial tribunal. These rules do not seem to me to confine the inquiry and decision of which they treat to the amount to be paid, leaving the liability to pay to be established before the ordinary courts, or merely to postpone the liability to pay until the amount to be paid has been determined by the directors or an arbitrator; they do not affect the time of payment in respect of a loss; they do not therefore alter the implied contract to indemnify directly a loss arises; they leave that contract to be independent, they deal no more with that than with any other stipulation in the contract of insurance; but they are, as it seems to me, intended to create a tribunal to hear and determine every question which may arise in respect of a policy made with the society, and to determine everything finally and compulsorily, so as to prevent any application to the ordinary

courts.

Then arises the question, what is the law? I agree with Martin, B. in Horton v. Sayers (4 H. & N. 650), that if the decision in Scott v. Avery in the House of Lords is to be interpreted according to the opinion expressed therein of Lord Campbell, the former cases are overruled, and the doctrine previously maintained with regard to ousting the jurisdiction of the ordinary courts is exploded. But I do not think it is possible to say that the decision of the House of Lords did overrule the former decisions. Baron Martin thought it did. He so stated in Horton v. Sayers, and so in terms ruled in Tredwen v. Holman (1 H. & C. 72). The facts in Scott v. Avery, as interpreted, did not make it necessary to decide more than this, that there may be a valid and binding contract that no action shall be maintained until the amount of damage, if any, has been ascertained in a specified mode. "It appears to me perfectly clear," said the Lord Chancellor, "that the language used indicates this to have been the intention of the parties that, supposing there was a difference between the person who had suffered loss or damage, and the committee, as to what amount he should recover, that was to be ascertained in a particular mode, and that until that mode had been adopted, and the amount ascertained according to that mode, no right of action should exist. In other words, that the right of action should be not for what a jury should say was the amount of the loss, but for what the persons designated in that particular form of agreement should so say." This ruling, as it seems to me, in no way conflicts with the right in either party to litigate before a court of law or equity any other question than the amount of damages which might arise under or in respect of the contract. The terms of the rules in that case were not the same as in this. They were, first, "that the sum to be paid to any suffering member for any loss or damage shall in the first instance be ascertained and settled by the committee." And then "that no member who refuses, &c., shall be entitled to maintain any action at law or suit in equity on his policy until the matters in dispute shall have been referred, &c., and then only for such sum as the said arbitrators shall award, and the obtaining the decision of such arbitrators on the mattera and claims in dispute is hereby declared to be a condition VOL. III, N. S.

[Ex. CH.

precedent to the right of any member to maintain any such action or suit." These terms seem rather to assume than to forbid the possibility of an action or suit upon questions other than the amount. There is no dispute as to the principle, says Coleridge J. in the Exchequer Chamber, 8 Ex. 500. "Both sides admit that it is not unlawful for parties to agree to impose a condition precedent with respect to the mode of settling the amount of damage, or the time of paying it, or any matters of that kind which do not go to the root of the action. On the other hand it is conceded that any agreement which is to prevent the suffering party from coming into a court of law, or in other words which ousts the courts of their jurisdiction cannot be supported." And in order to found or support the judgment the large terms in that case were by reference confined so as to be applied to a reference of the amount only and not of the liability. In Horton v. Sayer (4 H. & N. 643), the stipulations in the lease were "that if at any time during the said term, or at or after the expiration thereof, any difference should arise touching or concerning any covenant, &c., all and every the matters in difference should be finally settled by arbitrators, and every such award should be binding and conclusive, and that the parties should not commence or prosecute any action or suit, or seek any remedy either in law or equity, for relief in the premises without first submitting to such arbitration as aforesaid all matters in difference, &c." It is obvious that in those stipulations the arbitration was not confined to settling an amount of damages, but was general. "In this case," says Pollock C.B., "the deed discloses nothing more than an agreement generally to refer all disputes to arbitration, and that does not prevent the plaintiff from maintaining this action." And Bramwell B. says, "I think Scott v. Avery was rightly decided, though perhaps I may have some bias in consequence of having been counsel for the plaintiff. The principle of that decision is very intelligible. If a man covenants to do a particular act, and also covenants that if any dispute shall arise in respect thereof, it shall be referred to arbitration, that is the case with reference to which the courts have used the unfortunate expression that their jurisdiction is ousted by the agreement of the parties. On the other hand, if a man covenants to do a particular act, and that in the event of his not doing it the other party shall be entitled to receive such a sum of money as they shall agree upon, or if they cannot agree such an amount. as shall be determined by an arbitrator, there is no debt which can be sued for until the arbitrator has ascertained what sum is to be paid." He then decides in favour of the plaintiff, because "there is a distinct, and unqualified covenant by the defendant that he will do a particular act, and also a covenant that if any difference shall arise it shall be referred to arbitration." It is impossible, as it seems to me, to have a more clear statement that Scott v. Avery did not overrule the former decisions, and the case is an authority that the distinction is between an agreement to refer a particular point as a condition precedent to an action, and to refer all matters in dispute so to have no action. In Roper v. Lendon (1 E. & E. 825), the 10th condition in a fire policy was, "the amount of every loss will be paid immediately after the same shall have been

as

M

Ex. CH.]

established to the satisfaction of the directors." The 15th condition was, "in case any difference or dispute shall arise between the insured and the company touching any loss, &c., or otherwise in respect of any insurance, such difference shall be submitted, &c., and the award shall be conclusive and binding on all parties." The 6th plea relied on the 15th condition; Mr. Lush arguing for the defendants admitted that the 6th plea was bad. This of itself is high authority. Lord Campbell giving judgment said, "the 6th plea is clearly bad. The agreement to refer contained in the 15th condition is merely collateral to the agreement to pay. The courts will not, therefore, treat the agreement to refer as ousting their jurisdiction until there has been a reference. The distinction between the present case and cases like Scott v. Avery is plainly pointed out in the judgment there delivered in the House of Lords: "The present case does not fall within that decision, &c." And Hill J.: "The 6th plea is bad. The case is clearly not within the decision in Scott v. Avery. Here the agreement to refer is collateral to the agreement to pay. There the agreement was to pay only such a sum as the arbitrators should award." This seems to me a conclusive statement by or with the assent of Lord Campbell, on whose judgment in the House of Lords reliance was placed for the proposition that the doctrine as to ousting the jurisdiction of the courts is abrogated, that Scott v. Avery did not overrule that doctrine, that it still exists, and that the test is whether the agreement to refer applies only to the ascertaining a particular fact, or to the decision of every dispute which may arise. In Cooke v. Cooke (L. Rep. 4 Eq. 77), Sir W. Page Wood, at p. 85, thus discusses Scott v. Avery: "These observations of Lord St. Leonards have been commented on by the present Lord Chancellor in Scott v. Corporation of Liverpool, which fell within the principle of Scott v. Avery, a simple case where a contractor had agreed that he should be paid only what the engineer should certify, and it was held that there was no right of action until the certificate was made. But the Lord Chancellor distinguishes that simple class of cases from the other, where a distinct right, such as a debt or an obligation to account, has arisen, and the parties have agreed upon a particular private tribunal, which shall adjust the right for them. Speaking of the latter class of cases the Lord Chancellor says, 'A right of action has accrued, and it would be against the policy of the law to give effect to an agreement that such a right should not be enforced through the medium of the ordinary tribunals."" But the case of Tredwen v. Holman (1 H. & C. 72) is said to be contrary to these views. The stipulation in the policy was "and all other cases of dispute of whatever nature shall be referred in like manner, and no action at law shall be brought until the arbitrators have given their decision.' The court decided in favour of the defendants. Martin, B. in delivering the judgment said, "The case of Scott v. Avery decided that the insurer and the underwriter may contract that no right of action (to be enforced in a court of law) shall accrue until an arbitrator has decided not merely as to the amount of damages to be recovered, but upon any dispute that may arise upon the policy. The agreement is clear and unambiguous, and the parties probably meant to act upon Scott v.

[Ex. CH.

Avery, and exclude the jurisdiction of the courts to law except for the purpose of enforcing the award of be made by the arbitrator." This judgment seems to me to be founded upon the view entertained by Martin, B. that the judgment in the House of Lords in Scott v. Avery, which was contrary to the opinion given by him in that case,' overruled all the previous decisions on the subject. "It seems to me," he said, in Horton v. Sayers (4 H. & N. 650) "that Scott v. Avery has overruled all the previous decisions on the subject." As I cannot accede to this view I venture to say that Tredwen v. Holman cannot be supported. The true limitation of Scott v Avery seems to me to be that which was expressed in it, and which, as I have pointed out, has so often been expressed about it, that if parties to a contract agree to a stipulation in it which imposes as a condition precedent to the maintenance of a suit or action for a breach of it, settling by arbitration the amount of damage or the time of paying it, or any matters of that kind which do not go to the root of the action, i.e., which do not prevent any action at all from being maintained, such stipulation prevents any action being maintained until the particular fact has been settled by arbitration; but a stipulation in a contract which in terms would submit every dispute arising on the contract to arbitration, and so would prevent the suffering or complaining party from maintaining any suit or action at all in respect of any breach of the contract, does not prevent an action from being maintained; it gives at most a right of action for not submitting to arbitration and for damages probably nominal. And the rule is founded on public policy. It in no way prevents parties from referring to arbitration disputes which have arisen, but it does prevent them from establishing as it were before they dispute a private tribunal which may from ignor. ance do what the invented tribunal here did, viz., act in contravention and insist on acting in contravention of the most elementary principle of the administration of justice.

In this case, upon a careful consideration of such of the rules in the articles of associa tion as are in my opinion parts of the written contract of insurance, I come to the conclusion that there is nothing to postpone the attaching of the implied liability to indemnify for a loss to any time subsequent to the loss, that the stipulations as to arbitration by the committee or meetings would, if carried out according to their terms, prevent the assured under any policy of the society from maintaining any suit or action at all in the ordinary courts of the country in respect of any dispute arising on the policy; and therefore that such stipulations do not prevent the plaintiff from maintaining this action.

I am consequently of opinion that the judgment of the Court of Queen's Bench should not be supported, and that judgment should be given for the plaintiff.

KELLY, C.B.-I agree in opinion with Mr. Justice Brett, and chiefly upon the grounds upon which he has delivered that opinion.

It seems to me impossible to deny that inasmuch as by the contract between the parties the defendants have agreed that an insurance has been effected, and as they now admit that a total loss has been sustained, the plaintiff is entitled to recover_the amount of that loss. If there be no policy and no insurance, for what can they pretend that they

have received the different premiums and the contribution of the plaintiff to losses sustained by other members? This reduces the case to the single question whether the 39th and some other articles are a bar to the action on the ground that the decision of the directors is final and conclusive. If it be so, it can only be because the parties have contracted that there should be no remedy by action upon any claim upon any policy of insurance, and this would be not only to oust the courts of their jurisdiction to entertain an action upon a policy of insurance, but looking to the terms of the 39th article would be to hold that no action at all is maintainable under any circumstances by a member against the company. For we find that the directors "have full power (inter alia) to release any contract or agreement respecting any matter in which the society may be interested, and to decide all claims and demands upon the society by the members thereof, and all controversies and matters arising between the society and the members of the society, concerning insurances or claims upon or liabilities by or to the society: and the decision of the directors shall be final and conclusive, and no members of the society shall be allowed to bring any action suit or proceeding or other remedy against the society or the members thereof for any claims or demands upon or in respect of the society or the members thereof except as therein provided.' And no provision is to be found qualifying this part of the articles. If this provision be of legal validity, the effect would be that had the decision been in favour of the plaintiff that he was entitled to recover the sums insured, he could have maintained no action to enforce it.

The case of Scott v. Avery has been quoted, and undoubtedly there is much in the language of Lord Campbell in his judgment which, taken by itself, might seem to show, as Baron Martin (I think incorrectly) held, that it put an end to the doctrine against the ousting of the jurisdiction of the courts. But when we look to the facts of the case, and to the more cautious and I think accurate language of the Lord Chancellor, the decision may well be construed to amount to no more than that where

the recovery upon a policy of insurance is made expressly dependent upon the amount of the loss having been ascertained by arbitration or upon the performance of some other legal condition, and when other subjects of controversy are also to be submitted to arbitration, no action lies until the amount of the loss is so ascertained, or that the condition upon which the action may be brought has been performed. The language also of the judges, on whichever side their opinions were pronounced, is uniformly to the effect that the jurisdiction of the courts cannot be ousted by the contract of the parties, though the maintaining of the action may be made conditional upon the amount of loss or damage being previously ascertained, or upon some other conditions not applicable to the present case. I must add

that the resistance of the defendants to this demand appears to me so extremely unconscientious and unjust, that, speaking for myself, I should not hesitate to hold under the leave reserved for that purpose, if it be held that the plaintiff cannot recover upon the policy, that a count for money had and received should be introduced, under which he may recover the amount of premiums paid in

[Q.B. DIV.

respect of this policy, and possibly his contribution to the losses incurred by the society.

Here no question arose about the amount of the loss, nor was it ever required or proposed by the society or directors before whom the case was brought that the amount should be referred, but they decided at once, and without raising or suggesting any other question, that there was no loss at all by the perils of the sea.

As to the point upon the Stamp Act, it is well disposed of by my brother Blackburn, and indeed appears to have been abandoned.

Judgment for plaintiff, the appellant. Solicitors for plaintiff, Paterson, Snow and Bur

Dec. 14, 1875; Jan. 11 and Feb. 23, 1876.
KOPITOFF v. WILSON.

Shipping-Contract of carriage-Implied warranty
of fitness of ship for voyage.
In whatever way a contract for the conveyance of
merchandise be made, if there is no agreement to the
contrary, the shipowner is by the nature of the
contract impliedly and necessarily held to warrant
that the ship is good and in a condition to per-
form the voyage then about to be undertaken, that
is to say, that she is seaworthy or fit to meet and
undergo the perils of the sea and other incidental
risks to which she must of necessity to exposed in
the course of the voyage.

Plaintiff delivered iron armour plates to be carried by the defendant's ship, and they were stowed on board by the defendant's servants. During rough weather one of the plates broke loose, and went through the ship's side, thereby causing her loss. In an action to recover the value of the plates, the jury were told that a shipowner warrants the fitness of his ship when she sails, and not merely that he will honestly and bona fide endeavour to make her fit; and the two questions left to them were, whether the vessel at the time of sailing was in a state, as regards the stowing and receiving of these plates, reasonably fit to encounter the ordinary perils that might be expected on a voyage at that season; and whether, if she was not in a fit state, the loss was occasioned by her unfitness.

Held, that this was a proper direction concerning the liability of a shipowner, even though not holding himself out as a common carrier. THIS was an action tried before Blackburn, J. at Guildhall during the Sittings after Hilary Term, 1875.

The plaintiff sought to recover for the loss of certain armour plates and bolts delivered by him, to be carried on board the defendant's ship Walamo, from Hull to Cronstadt.

At the trial the verdict was directed for the plaintiff, leave being reserved to the defendants to move to enter a nonsuit.

The defendants accordingly obtained a rule nisi for this purpose, on the ground that the defendant was relieved from liability by the terms of the bill of lading. The rule also called upon the plaintiff to show cause why a new trial should not be had,

on the ground that the learned judge misdirected the jury by laying down that there was an absolute obligation on the shipowner to make his ship seaworthy as regards the stowage, and that he would be liable if, in consequence of the nonperformance of that obligation, the goods should be lost.

Dec. 14 and Jan. 11.-Cohen, Q.C. (with him Butt, Q.C. and Mathew) showed cause.

Thesiger, Q.C. (with him Sir H. James and Webster) supported the rule.

The pleadings, facts, and arguments sufficiently appear in the judgment of the court.

The following authorities were cited and discussed:

Lyons v. Mells, 5 East, 428;

Gibson v. Small, 4 H. L. Cas. 353;

Stanton v. Richardson, ante, vol. 1, p. 449; vol. 2, p. 228; L. Rep. 7 C. P. 421; and 9 C. P. 390; Readhead v. Midland Railway Company, L. Rep. 4 Q. B. 381; 20 L. T. Rep. N. S. 628; Worms v. Storey, 11 Ex. 427;

Davis v. Garratt, 6 Bing. 716;

Thompson v. Hopper, 6 E. & B. 172, 937; E. B. & E. 1038;

Lloyd v. General Iron Screw Collier Company, 3 H. & C. 284;

Dixon v. Sadler, 5 M. & W. 405;

The Freedom, ante, vol. 1, p. 28; L. Rep. 3 P. C. 594; Notara v. Henderson, ante, vol. 1, p. 278; L. Rep. 7 Q. B. 225;

Laurie v. Douglas, 15 M. & W. 746;

Phillips v. Clark, 2 C. B., N. S., 168;
Montoya v. London Assurance Company, 6 Ex. 451;
Redman v. Wilson, 14 M. & W. 476;
Abbot on Shipping (3rd edit.), p. 229;

Maude and Pollock on Merchant Shipping (3rd edit.), p. 263;

Emerigon, Traité des Assurances, s. 4, pp. 372-375; Roccus, Not. 19, pp. 57, 69;

Molloy, book ii. c. 2, s. 10;

Wellwood's Sea Laws, t. 7, p. 22;

Troplong, Contrat de Louage, book i. p. 335;
Parsons on Shipping, p. 171.

Cur. adv. vult.

Feb. 23.-The judgment of the court (Blackburn, Quain, and Field, JJ.) was delivered by

FIELD, J.-This is an action in which the plaintiff seeks to recover damages for the loss of a large number of iron armour plates and bolts which were lost on board the defendants' ship Walamo, on a voyage from Hull to Cronstadt. The cause was tried before Blackburn, J. at Guildhall at the Sittings after Hilary Term 1875.

The declaration contained several counts, and amongst them was a count alleging that the defendants had warranted that the ship should be seaworthy and reasonably fit to carry the goods in question, and alleged that by reason of a breach of such warranty the goods were lost. There was also a count upon the bill of lading, alleging a promise to deliver, with the exception of certain perils, &c., and a loss not within any of the exceptions. The defendants denied the warranty, and also alleged that the cause of loss was within some of the exceptions.

On the trial it appeared that the plaintiff, who was an agent of the Russian Government, had entered into a contract with the defendants, who were shipowners at Hull, by which the defendants undertook to ship for Cronstadt from time to time large quantities of armour plates, which the plaintiff was having manufactured in this country, at agreed rates of freight, varying according to the season of the year. The

LQ.B. DIV.

other terms of the contract are not material to the points raised before us.

Three armour plates, of great weight, from eighteen to fifteen tons weight each, were delivered by the plaintiff to the defendants for shipment, and were by them shipped on the 15th Sept. in the defendants' own steamship Walamo, under a bill of lading containing many exceptions. The defendants themselves, by their own servants, stowed the ship. The armour plates were by them placed on the top of a quantity of railway iron, and then secured there by wooden shores. There was a conflict of testimony as to whether this was or was not a proper mode of stowing them. It was not disputed that the steamship was in herself a good ship, but it was contended, on behalf of the plaintiff, that the mode of stowing these plates adopted by the defendants made her unseaworthy on this voyage. On getting out to sea she encountered bad weather, the wind being high and the sea rough, and she rolled heavily. There was conflicting evidence as to the degree of this bad weather, and the cause of this rolling; the plaintiff contending that the wind and sea were no more than at that season was to be expected, and that the rolling was owing to the improper stowage of the vessel; the defendants contending that there was an unusual storm, which would have made any ship, however well stowed, roll. After the ship had been out at sea for some hours one of the armour plates broke loose, and went through the side of the ship, which in consequence went down in deep water, and was totally lost, with all her cargo on board.

The plaintiff's contention was, that the breaking loose of the plate was because it was improperly stowed and secured; the defendants' that it was a direct consequence of the roughness of the sea, which was a peril excepted in the bill of lading. These contentions raised questions of fact for the jury. Leave was reserved at the close of the case to enter a nonsuit, if the exceptions in the circumstances. the bill of lading protected the defendants under

The case was thus left to the jury. The learned judge told the jury as a matter of law, and not as a question for them, that a shipowner warrants the fitness of his ship when she sails, and not merely that he will honestly and bonâ fide endeavour to make her fit; and after explaining to the jury what reasonably fit meant with reference to a North Sea voyage, and the other facts in the case, left the following questions to the jury:

First, was the vessel at the time of her sailing in a state, as regards the stowing and securing of these plates, reasonably fit to encounter the ordinary perils that might be expected on a voyage at that season from Hull to Cronstadt?

Secondly, if she was not in a fit state, was the loss that happened caused by that unfitness?

These questions were put in writing, and handed to the jury, and on that paper the judge put in writing what he had previously stated in his summing up, that they were "to understand (in answering this second question) that though the disaster would not have happened had there not been considerable sea, yet it is to be considered as caused by the unfitness, if they (the jury) think that the plates would not have got