Reed v. Washington Fire & Marine Insurance, 138 Mass. 572

Reed v. Washington Fire & Marine Insurance

138 Mass. 572 | Mass. | 1885

W. Allen, J.

It is well settled in this Commonwealth, that an agreement to refer to arbitration will not be enforced in equity, and will not be sustained as a bar to an action at law or a suit in equity. Rowe v. Williams, 97 Mass. 163. Wood v. Humphrey, 114 Mass. 185. Noyes v. Marsh, 123 Mass. 286. Vass v. Wales, 129 Mass. 38. Evans v. Clapp, 123 Mass. 165. White v. Middlesex Railroad, 135 Mass. 216.

The reason generally given is, that such an agreement affects the remedy, and, if enforced, would oust the courts of their jurisdiction. Another reason is, that a submission to arbitration is a power, and revocable at any time before it is fully executed by an award made. A party will not be compelled to enter into a submission which he can forthwith revoke; and the bringing of an action amounts to a revocation. Neither of these reasons seems to apply to an action upon a promise to pay an award. Such a promise is conditional upon the making of an award, and the arbitration is a condition precedent to the right of action.

There is no doubt that an appraisal of value, or an award of the amount of damages, can be made a condition precedent to a right of action. In such a case, the agreement is not to refer a cause of action, but that a cause of action shall arise upon the appraisal or award, which is preliminary to, and in aid and a *576condition of, the right of action. Hood v. Hartshorn, 100 Mass. 117, was a case of that kind. Chief Justice Chapman said: “ The present case comes within the principle stated by Coleridge, J., in Avery v. Scott, 8 Exch. 500, that it is not unlawful for parties to agree to impose a condition precedent with respect to the mode of settling the amount of damages, or the time of paying it, or any matters of that kind that do not go to the root of the action.” The judgment of Coleridge, J., in the Exchequer Chamber, in Avery v. Scott, was affirmed in Scott v. Avery, 5 H. L. Cas. 811; and the question in such cases has been one of the construction of contracts, — whether the agreement to refer in the particular contract under consideration is a condition precedent to a right of action upon the contract, or an agreement to refer a right arising under other provisions of the contract.

In this case, the policy provides that, in case of loss, a statement shall be rendered to the company, and that the company, within sixty days after such statement shall be furnished, shall either pay the amount for which it is liable or replace the property. The furnishing of the statement is the condition upon which the company promises to pay the loss. Not connected with that is the provision, that, if any difference of opinion shall arise as to the amount of the loss, it is mutually agreed that the said loss shall be referred to arbitrators to be chosen, whose decision shall be final. It is possible for a person who has promised to pay a loss to agree to refer to arbitration questions arising in regard to the performance of that promise. The language of the provision of the policy under consideration aptly expresses that intention; and it cannot be held to constitute a condition precedent to a right of action for a loss, unless an agreement to refer a loss to arbitration of itself imports such a condition. The agreement is not incorporated with, but is distinct from, the promise to pay the loss, and from the provision, which is a condition of that promise, that a statement shall be furnished; it cannot take effect except with reference to a loss, which the company has promised to pay, — an existing cause of action; and it is simply an agreement to refer that matter to arbitration, without any agreement by the plaintiff not to sue. There is nothing to bring it within any of the cases in which a *577provision to refer has been held to be a condition, such as Scott v. Avery, ubi supra, Elliott v. Royal Exchange Assur. Co. L. R. 2 Ex. 237, Braunstein v. Accidental Death Ins. Co. 1 B. & S. 782, Scott v. Liverpool, 3 DeG. & J. 334, Tredwen v. Holman, 1 H. & C. 72, in England; and Hood v. Hartshorn, ubi supra, in this Commonwealth; — but is rather governed by such cases as Horton v. Sayer, 4 H. & N. 643, Roper v. Lendon, 1 El. & El. 825, Dawson v. Fitzgerald, 1 Ex. D. 257, Edwards v. Aberayron Ins. Society, 1 Q. B. D. 563, in England; and Nute v. Hamilton Ins. Co. 6 Gray, 174, Hall v. People's Ins. Co. 6 Gray, 185, and other cases, cited before, in this Commonwealth.

It is argued for the defendant, that the provision may have more effect to bar the plaintiff’s action if construed as a statute, than if regarded merely as a contract. If the Legislature prescribes and annexes to a particular right a special remedy, a party is confined to that remedy. Boynton v. Middlesex Ins. Co. 4 Met. 212. But this provision is not in form a legislative enactment. It is put forward by the Legislature as a contract to be entered into by the parties, and to derive its validity from their consent. It is their contract; as such, it does not deprive the plaintiff of his action and his trial by jury; it is not to be presumed that the Legislature intended, by prescribing the form of contract, and prohibiting any other, to give it effect in depriving a party of rights which, as a contract, it would not have.

The discretion of the court, in deciding whether the witnesses to value were qualified to testify in regard to it, was properly exercised; and the evidence admitted was competent.

Exceptions overruled.