"I think the plaintiff is entitled to judgment. I agree that there is no great doubt as to the law, nor did I ever think there was, even before the decision in Scott v. Avery. In the argument of that case (the arbitration clause in which was framed by Mr. Justice Cresswell), Mr. Manisty and myself were counsel for the defendants. We scarcely cited a case, but laid down a proposition which was almost immediately adopted by the judges below, and by the House of Lords. That proposition was, that if two persons, whether in the same or in a different deed from that which creates the liability, agree to refer the matter, upon which the liability arises, to arbitration, that agreement does not take away the right of action. But if the original agreement is not simply to pay a sum of money, but that a sum of money shall be paid if something else happens, and that something else is that a third person shall settle the amount, then no cause of action arises until the third person has so assessed the sum. ... This is plain common sense, and is what I understand the House of Lords to have decided in Scott v. Avery."

He then proceeds to construe the policy in the case before him, and concludes with these words:

"Now it is impossible to say that this is merely a substitute for adjustment between the parties; for, under these words, the arbitrator would have power, not merely to adjust the amount that shall be paid, but to determine whether the plaintiff shall have any payment at all, or whether, by reason of non-payment of premiums or of fraud, he has forfeited his right to recover. I think, therefore, that this is a collateral agreement to refer to arbitration, and not an agreement that only the adjusted loss shall be paid."

It will be observed that the objection brought by Baron Bramwell, against the clause in this case, is the same that was urged against that in Scott v. Avery; viz., that the arbitrator is clothed with power to decide much more than the amount of a debt: he is permitted to decide on the existence of the debt.

The cases in this country are rather numerous than interesting. There has been very little discussion of the authorities, and probably the liberal statutory provisions for reference, together, perhaps, with a national preference for the "domestic forum" have eliminated from the subject most of its difficulties. In Maryland,1 it has been held, that an arbitration clause by which "any disputes relating to a loss" on a policy of insurance were to be referred, was bad, as ousting the courts. But this was in 1825, and whether

1 Allegre v. Md. Ins. Co., 6 H. & J. 408.

the principle of Scott v. Avery would now be held to apply as in Elliott v. Royal Exchange Assurance Co., it is impossible to say: this may be said, that the clauses in the English and the Maryland policy seem to be of equal breadth. In Pennsylvania, the case of Gray v. Wilson 1 was very much the same as that just cited from the Maryland Reports; but the subsequent cases were very different. In Monongahela Nav. Co. v. Fenlon,2 there was an agreement which contained the following clause: "It is also mutually agreed between the parties to these presents, that in any dispute which may arise between the contractor and the company, the decision of the engineer shall be obligatory and conclusive, without further recourse or appeal." The defendants requested the court to charge the jury that the estimate of the engineer was conclusive. The court refused. The case went up on this point. The Supreme Court reversed the decision of the court below. This decision seems to bring the case within the principle of those in which it is held, that if A. agrees to pay C. what B. shall adjudge to be due him, C. has no action until the judgment of B. is given. Scott v. Avery, therefore, applies; but the words of the clause are those of an agreement to refer future disputes to arbitration.

In Snodgrass v. Gavit,3 where the agreement to refer was very nearly the same as in the above, Woodward, J., said,

"Where parties stipulate that disputes, whether actual or prospective, shall be submitted to the arbitrament of a particular individual or tribunal, they are bound by their contract, and cannot seek redress elsewhere. Such were the cases cited in the argument."

It should not be overlooked that Kill v. Hollister was cited for the consideration of the court, and that Kill v. Hollister might in brief be stated as follows: "Where parties stipulate that disputes, whether actual or prospective, shall be submitted to the arbitrament of a particular individual or tribunal, they are not bound by their contract, and they can seek redress elsewhere." The general result of the Pennsylvania cases seems to be that agreements to refer are valid, notwithstanding the earlier authorities. In New York, the question has never been decided; but as a submission to arbitrators has been held by the Supreme Court of that State, to be revocable, on the ground that it is against public policy to exclude

1 4 Watts, 39.

3 28 Penn. St. 221.

2 4 S. & W. 205.

4 Smith v. Compton, 20 Barb. 262.

a covenant is, that as the damages are not to be ascertained by evidence, nominal damages only can be got."

And in Tattersall v. Groote, he expressed much doubt whether an action for damages would lie. But Lord Campbell, in Livingstone v. Ralli,2 held that such an action was maintainable, and on these grounds:

"It certainly seems that in Tattersall v. Groote, Lord Eldon expressed much doubt; but neither in that case nor in any other, was there a decision that an action could not be maintained on such an agreement; and, ever since I have known Westminster Hall at least, the opinion of the profession has been that, though such a prospective agreement of reference could not bar an action in the courts of law, yet an action was maintainable for the breach of it. There seems at one time to have prevailed in our courts a horror of a domestic forum, which I can neither sympathize with nor account for; but the legislature has recently, in the Common Law Procedure Act, 1854 (17 & 18 Vict. c. 125), sect. 11, made a provision in such cases, not that the agreement to refer shall be pleadable in bar, but that the court may stop the action. This shows the opinion of the legislature that such agreements are not contrary to public policy. For these reasons I entertain no doubt that the action lies."

And the difficulty raised by Lord Eldon, that only nominal damages would be recoverable, on account of the impossibility of proving what actual damage had been sustained, seems to be disposed of, at least so far as one class of cases is concerned, by Randel v. Ches. & Del. Canal Co.3

In this case, which was that of a contractor's agreement with a canal company, it was stipulated that a competent engineer, to be selected by the defendant canal company should inspect the work done by the plaintiff, and that the latter should be paid according to this estimate. The estimate was not made. An action for damages was brought. The action was sustained, on the ground that there had been a breach of "a prospective agreement to submit future differences," and the jury subsequently gave substantial damages.

Reaching now the last branch of our inquiry, viz., the ques tion whether equity will enforce the specific performance of a contract to refer to arbitration, we think it may be said with certainty that a bill for that purpose will not be granted.

1 2 B. & P. 131.

25 Ellis & Bl. 132.

8 1 Harr. (Del.) 234

Agar v. Macklew,1 decided in 1825 by Sir John Leach was a bill for specific performance of an agreement that A. should have the right to buy certain real estate, for such sum as should be fixed by two persons, to be chosen by the parties, and in case these persons, called "surveyors " in the agreement, should differ as to the value of the premises, then the question was to be referred to an umpire, such umpire to be chosen by the surveyors. There was a further stipulation that the umpirage should be binding. The bill stated the defendant had refused to appoint a surveyor, though the plaintiff had appointed one. The court treated this as a bill for specific performance of an agreement to refer to arbitrators, and refused to grant the decree prayed for. And the same law has been adopted in this country.2

To return to the question already proposed, what reception would a plea like that cited above from Elliott v. Royal Exchange Assurance Co. meet in the courts of any State in this country, where the point is not already adjudicated? Would such a court, adopting the principle of Scott v. Avery, apply it with the liberality we have witnessed in England, and permit it to include practically all arbitration clauses, or would they adopt some other view? It seems to us, that a decision such as this might well be reached; the old rule, that courts of law are not to be ousted of their jurisdiction by agreements of individuals, was founded upon reasons which have plainly lost their force. Those reasons were, first, the infringement of the dignity of the legally constitued tribunals; and, second, a supposed impolicy in permitting people to contract themselves out of the protection of the law. The dignity of the courts is not any longer supposed to be infringed by these erections of a domestic forum; while, at the same time, individuals are in modern times supposed to be much the best judges of their own interests, and to be competent to decide whether they wish to submit themselves to, or withdraw themselves from, the jurisdiction of courts. There is no better evidence of this than the numerous statutes passed simply for the purpose of facilitating references. But, if the reason of the rule has ceased, why should not the rule be allowed to die also? Because, it is said, the authorities are clear that the rule is in force. The latest cases,

1 2 Sim. & Stu. 418.

2 Copper v. Wells, Saxt. 10 N. J. Semble to the same effect by Lord Eldon, in Tattersall v. Groote, 2 B. & P. 131.