the agreement is of little value unless it can be used as a bar to an action in the courts on the claim which it was agreed to arbitrate; and it is its validity in this respect which will be here considered. § 1720. Arbitration may be made a condition precedent in England. In England the parties apparently may make all rights under a contract conditional on arbitration, by using language appropriate for the purpose. 56 The principle has thus been stated: "If there is a covenant to pay the amount of the loss, accompanied by a collateral provision that the amount shall be ascertained by arbitration, such arbitration is not a condition precedent to the maintenance of an action on the covenant; but if the parties have covenanted that the liability is only to arise after the amount has been adjusted by arbitration, then such adjustment is a condition precedent to the right to recover." But when there is a repudiation going to the substance of the whole contract it has been held the repudiating party when sued and seeking to justify the repudiation cannot insist on the enforcement of a subordinate term of the contract making arbitration a condition precedent to liability." 58 11 57 ship Co., 99 Fed. 787, 102 Fed. 926, 43 C. C. A. 57. 56 The leading case is Scott v. Avery, 5 H. L. C. 811. 57 Viney v. Bignold, 20 Q. B. D. 172. See also Elliott v. Royal Ex. Ass., L. R. 2 Exch. 237; Dawson v. Fitzgerald, 1 Ex. D. 257; Collins v. Locke, 4 A. C. 674; Babbage v. Coulburn, 9 Q. B. D. 235; Caledonian Ins. Co. v. Gilmour, [1893] A. C. 85; Trainor v. Phoenix Fire Ins. Co., 65 L. T. 825; Manchester Ship Canal Co. v. Pearson, [1900] 2 Q. B. 606; Spurrier v. LaCloche, [1902] A. C. 446; Woodall v. Pearl Assurance Co., [1919] 1 K. B. 593. Cf. Edwards v. Aberayron Ins. Soc., 1 Q. B. D. 563. 58 In Jureidini v. National British, etc., Ins. Co., [1915] A. C. 499, an action was brought on a policy of fire insurance "which provided (1) that if the claim were fraudulent or if the loss were occasioned by the wilful act or with the connivance of the insured all benefit under the policy should be forfeited, and (2) that if any difference arose as to the amount of any loss such difference should, independently of all other questions, be referred to arbitration, and that it should be a condition precedent to any right of action upon the policy that the award of the arbitrator or umpire of the amount of the loss if disputed should be first obtained. The insurance company repudiated the claim in toto on the ground of fraud and arson." It was held "that the repudiation of the claim on a ground going to the root of the contract precluded the company from pleading the arbitration clause as a bar to an action to enforce the claim." The distinction so taken, however, is unsound. A person who repudiates a contract wrongfully can not sue upon it himself, but if he is sued upon it he can be held liable only according to the terms of the contract. If, therefore, an arbitration clause amounts to a condition precedent to the defendant's promise to pay any insurance money, and such conditions are lawful, the defendant can be held liable only if that condition is performed, prevented, or waived. 59 § 1721. Decisions in the United States. In many of the United States a doctrine similar to that adopted by the English courts seems to prevail,00 and in this 59 Cf. Woodall v. Pearl Assurance Co., [1919] 1 K. B. 593. 60 Hamilton v. Home Ins. Co., 137 U. S. 370, 34 L. Ed. 708, 11 S. Ct. 133; Crossley v. Connecticut Ins. Co., 27 Fed. 30; Kahnweiler v. Phenix Ins.. Co., 67 Fed. 483, 14 C. C. A. 485, rev'g 57 Fed. 562; Connecticut Fire Ins. Co. v. Hamilton, 59 Fed. 258, 8 C. C. A. 114; Mutual Fire Ins. Co. v. Alvord, 61 Fed. 752, 9 C. C. A. 623; Old Saucelito Co. v. Commercial Assn. Co., 66 Cal. 253, 5 Pac. 232; Adams v. South British Ins. Co., 70 Cal. 198, 11 Pac. 627; Carroll v. Girard Ins. Co., 72 Cal. 297, 13 Pac. 863; Davisson v. East Whittier Land &c. Co., 153 Cal. 81, 96 Pac. 88; Denver, etc., R. Co. v. Riley, 7 Col. 494, 4 Pac. 785; Denver, etc., Co. v. Stout, 8 Col. 61, 5 Pac. 627; Union Pacific Co. v. Anderson, 11 Col. 293, 18 Pac. 24; Hanover Fire Ins. Co. v. Lewis, 28 Fla. 209, 10 So. 297; Liverpool Ins. Co. v. Creighton, 51 Ga. 95; Southern Ins. Co. v. Turnley, 100 Ga. 296, 27 S. E. 975; Birmingham Ins. Co. v. Pulver, 126 Ill. 329, 338, 18 N. E. 804, 9 Am. St. Rep. 598; Lesure Lumber Co. v. Mutual Fire Ins. Co., 101 Iowa, 514, 70 N. W. 761; Zalesky v. Home Ins. Co., 102 Iowa, 613, 71 N. W. 566; Read v. State Ins. Co., 103 Iowa, 307, 72 N. W. 665, 64 Am. St. Rep. 180; Dee v. Key City Fire Ins. Co., 104 Iowa, 167, 73 N. W. 594; Fisher v. Merchants' Ins. Co., 95 Me. 486, 50 Atl. 282, 85 Am. St. Rep. 428; Chippewa Lumber Co. v. Phenix Ins. Co., 80 Mich. 116, 44 N. W. 1055; Guthat v. Gow, 95 Mich. 527, 55 N. W. 442; Boots v. Steinberg, 100 Mich. 134, 58 N. W. 657; Weggner v. Greenstine, 114 Mich. 310, 72 N. W. 170; Gasser v. Sun Fire Office, 42 Minn. 315, 44 N. W. 252; Mosness v. GermanAmerican Ins. Co., 50 Minn. 341, 52 N. W. 932; Levine v. Lancashire Ins. Co., 66 Minn. 138, 68 N. W. 855; Mecartney v. Guardian Trust Co., 274 Mo. 224, 202 S. W. 1131; Wolff v. Liverpool Ins. Co., 50 N. J. L. 453, 14 Atl. 561; Anderson v. Odd Fellows Hall, 86 N. J. L. 271, 90 Atl. 1007; President, etc., Delaware & H. C. Co. v. Penn. Coal Co., 50 N. Y. 250; Uhrig v. Williamsburg Ins. Co., 106 N. Y. 362, 4 N. E. 745; Seward v. Rochester, 109 N. Y. 164, 16 N. E. 348; National Contracting Co. v. Hudson River Water Power Co., 170 N. Y. 439, 63 N. E. 450; Keeffe v. National Soc., 4 N. Y. App. Div. 392, 38 N. Y. S. 854; Spink v. Coöperative Fire Ins. Co., 25 N. Y. App. Div. 484, 49 N. Y. S. 730; Van Note v. Cook, 55 N. Y. App. Div. 55, 66 N. Y. S. 1003; Pioneer Mfg. Co. v. Phoenix Assn. Co., 106 N. C. 28, 10 S. E. 1057 (see, however, connection should be considered the numerous cases where the certificate of an architect or engineer is made a condition precedent to any right to recover for building or other work.61 In many States, however, the distinction is taken between an agreement to arbitrate the whole question of liability which is held ineffectual even though expressed in the form of a condition precedent, and an agreement which merely provides for the determination of a particular fact as for the valuation of a loss or injury.62 Pioneer Mfg. Co. v. Phoenix Assn. Co., 110 N. C. 176, 14 S. E. 731, 28 Am. St. Rep. 673; Pretzfelder v. Merchants' Ins. Co., 116 N. C. 491, 21 S. E. 302); Monongahela Nav. Co. v. Fenlon, 4 W. & S. 205; Reynolds v. Caldwell, 51 Pa. 298; Gowen v. Pierson, 166 Pa. 258, 31 Atl. 83; Chandley v. Borough of Cambridge Springs, 200 Pa. 230, 232, 49 Atl. 772; Jones v. Enoree Power Co., 92 S. C. 263, 75 S. E. 452, Ann. Cas. 1914 B. 293; Scottish Ins. Co. v. Clancy, 71 Tex. 5, 8 S. W. 630; American Ins. Co. v. Bass, 90 Tex. 380, 382, 38 S. W. 1119; [cf. Queiroli v. Whitesides (Tex. Civ. App.), 206 S. W. 122]; VanHorne v. Watrous, 10 Wash. 525, 39 Pac. 136; Zindorf Co. v. Western Co., 27 Wash. 31, 67 Pac. 374; Herring-Hall-Marvin Safe Co. v. Purcell Safe Co., 81 Wash. 592, 142 Pac. 1153, 86 Wash. 694, 150 Pac. 1162; Calhoun v. Pederson, 85 Wash. 630, 149 Pac. 25 (cf. Winsor v. German Soc., 31 Wash. 365, 72 Pac. 66); Lawson v. Williamson Coal & Coke Co., 61 W. Va. 669, 57 S. E. 258; Chapman v. Rockford Ins. Co., 89 Wis. 572, 62 N. W. 422, 28 L. R. A. 405. See also Randall v. Phoenix Ins. Co., 10 Mont. 362, 25 Pac. 960; Kahn v. Traders' Ins. Co., 4 Wyo. 419, 34 Pac. 1059, 62 Am. St. Rep. 47. In a number of these cases, however, the court also laid stress on the fact that the agreement for arbitration related not to the whole question of liability under the contract, but merely to the amount of damages. 61 See supra, §§ 794-798, and especially Keachie ບ. Starkweather Drainage Dist. (Wis.), 170 N. W. 236. 62 Dickson Mfg. Co. v. American Locomotive Co., 119 Fed. 488; Jefferson Fire Ins. Co. v. Bierce, 183 Fed. 588; United States Asphalt Co. v. Trinidad Lake Petroleum Co., 222 Fed. 1006; Aktieselskabet &c. Kompagniet v. Rederiaktiebolaget Atlanten, 232 Fed. 403, 250 Fed. 935, 163 C. C. A. 185 (cert. granted 248 U. S. 553, 39 S. Ct. 8); The Eros, 241 Fed. 186, 251 Fed. 45, 163 C. C. A. 295; Western Assoc. Co. v. Hall, 112 Ala. 318, 20 So. 447, 120 Ala. 547, 24 So. 936; Headley v. Etna Ins. Co. (Ala.), 80 So. 466; Bauer v. Samson Lodge, 102 Ind. 262, 1 N. E. 571; Supreme Council v. Garrigus, 104 Ind. 133, 3 N. E. 818, 54 Am. Rep. 298; Louisville, etc., Ry. Co. v. Donnegan, 111 Ind. 179, 12 N. E. 153; Supreme Council v. Forsinger, 125 Ind. 52, 25 N. E. 129, 9 L. R. A. 501, 21 Am. St. Rep. 196; McCoy v. Able, 131 Ind. 417, 30 N. E. 528, 31 N. E. 453; Ison v. Wright, 21 Ky. L. Rep. 1368, 55 S. W. 202; Robinson v. Georges Ins. Co., 17 Me. 131, 35 Am. Dec. 239; Stephenson v. Piscataqua Ins. Co., 54 Me. 55 (but see Fisher v. Merchants' Ins. Co., 95 Me. 486, 50 Atl. 282, 85 Am. St. Rep. 428; White v. Middlesex R. Co., 135 Mass. 216; Miles v. Schmidt, 168 Mass. 339, 47 N. E. 115 (cf. Lamson Co. v. Prudential Ins. Co., 171 Mass. 433, 50 N. E. 943, and see also Marsch v. Southern New Eng. R. Corp., 230 Mass. 483, Whatever disagreement between the decisions there may be it is at least generally held that a stipulation in form collateral to refer all matters in dispute under a contract to arbitrators is no bar to an action at law for breach of the contract.6 63 Even though the provision for arbitration be in the form of a condition precedent, and the validity of the condition be recognized, it may be excused by waiver or prevention, like any other condition.64 120 N. E. 120); Phoenix Ins. Co. v. Zlotky, 66 Neb. 584, 92 N. W. 736; Hartford Ins. Co. v. Hon, 66 Neb. 555, 92 N. W. 746, 103 Am. St. Rep. 725; Leach v. Republic Ins. Co., 58 N. H. 245; Wyckoff v. Woarms, 118 N. Y. App. Div. 699, 103 N. Y. S. 650; Baltimore, etc., R. Co. v. Stankard, 56 Ohio St. 224, 46 N. E. 577, 49 L. R. A. 381, 60 Am. St. Rep. 745; Myers v. Jenkins, 63 Ohio St. 101, 57 N. E. 1089, 81 Am. St. Rep. 613; Ball v. Doud, 26 Oreg. 14, 37 Pac. 70; Gray v. Wilson, 4 Watts, 39; Commercial Union Assoc. v. Hocking, 115 Pa. 407, 8 Atl. 589, 2 Am. St. Rep. 562; Yost v. Dwelling House Ins. Co., 179 Pa. 381, 36 Atl. 317; Penn Plate Glass Co. v. Spring Garden Ins. Co., 189 Pa. 255, 42 Atl. 138; Needy v. German-American Ins. Co., 197 Pa. 460, 47 Atl. 739; Pepin v. Societe St. Jean Baptiste, 23 R. I. 81, 49 Atl. 387, 91 Am. St. Rep. 620; Daniher v. Grand Lodge, 10 Utah, 110, 37 Pac. 245; Kinney v. Baltimore, etc., Assoc., 35 W. Va. 385, 14 S. E. 8, 15 L. R. A. 142 (conf. Baer's Sons Grocer Co. v. Cutting Fruit Packing Co., 42 W. Va. 359, 26 S. E. 191). See also Edwards v. Aberayron Ins. Soc., 1 Q. B. D. 563, and the Michigan, Minnesota, and New York decisions cited in the preceding note. 63 Memphis Trust Co. v. BrownKetchum Iron Works, 166 Fed. 398, 93 C. C. A. 162, cert. denied 214 U. S. 515, 53 L. Ed. 1064, 29 S. Ct. 697; Lawrence v. White, 131 Ga. 840, 63 S. E. 631, 19 L. R. A. (N. S.) 966, 15 Ann. Cas. 1097; Crilly v. Philip Rinn Co., 135 In Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 113 N. E. 646, 649, the court said: "The stipulation as to arbitration is not made a condition precedent to a right to recover upon the contract. It is distinct and severable from the agreement to pay a pro rata share of the amount received by the defendant. The phrase of the contract in this respect is markedly different, for example, from that of the standard form of insurance. St. 1907, c. 576, § 59 (page 886); Second Society of Universalists v. Royal Ins. Co., 221 Mass. 518, 525, 526, 109 N. E. 384. It is in legal effect like those found in Reed v. Washington Insurance Co., 138 Mass. 572; Norcross Bros. v. Vose, 199 Mass. 81, 94, 85 N. E. 468; and Derby Desk Co. v. Connors Bros. Const. Co., 204 Mass. 461, 467, 90 N. E. 543. See Hanley v. Etna Ins. Co., 215 Mass. 425, 429, 102 N. E. 641. The contract in this respect is plainly distinguishable from those before the court in Hood v. Hartshorn, 100 Mass. 117, 1 Am. Rep. 89, and Old Colony St. Ry. v. Brockton & Plymouth St. Ry., 218 Mass. 84, 105 N. E. 866." But see Pacaud v. Waite, 218 Ill. 138, 75 N. E. 779, 2 L. R. A. (N. S.) 672; Deibeikis v. Link-Belt Co., 261 Ill. 454, 104 N. E. 211, Ann. Cas. 1915 A. 241. C4 Tubbs v. Delillo, 19 Cal. App. 612, $1722. Technical character of distinctions. The lines of distinction drawn by the decisions are not very clear and turn often upon matters of form rather than of substance, which is objectionable where the question is one of policy. In New York it is said that a distinction is to be made "between the provisions of a contract providing that before a right of action shall accrue certain facts shall be determined, or amounts or values ascertained, and an independent covenant or agreement to provide for the adjustment and settlement of all disputes and differences by arbitration to the exclusion of the courts;" 65 and in a concurring opinion in the same case from which this quotation is taken it is said of an attempt to bestow exclusive jurisdiction on private arbitrators that whether it "takes the form of a condition precedent or a covenant, it is equally ineffective." Probably these expressions as nearly represent the prevailing American judicial opinion, as any that could be selected. § 1723. Illustration of difficulty in applying distinctions. These cases may be put as illustrations of the practical difficulty of applying such a test and as indicating that the test is little more than a matter of pure form: 1. In return for a promise of A to build according to specifications, B promises to pay what C thinks just, not exceeding $10,000, taking into account not only the value of the work, but any default of either party in the performance of the contract. It seems hard to believe that a court would or should hold such a contract so illegal as to preclude all recovery upon it, and if any recovery is to be had upon it, clearly C's decision which involves not only a valuation of the work, but a decision 127 Pac. 514; Crilly v. Philip Rinn Co., 135 Ill. App. 198; Lamson Consolidated Store Service Co. v. Prudential F. Ins. Co., 171 Mass. 433, 50 N. E. 943; Brocklehurst & Potter Co. v. Marsch, 225 Mass. 3, 113 N. E. 646; Grant v. Pratt, 110 N. Y. App. Div. 867, 97 N. Y. S. 29, 186 N. Y. 611, 79 N. E. 1106; Symms Powers Co. v. Kennedy, 33 S. Dak. 355, 146 N. W. 570. 65 Meacham v. Jamestown &c. R., 211 N. Y. 346, 105 N. E. 653, Ann. Cas. 1915 C. 851, citing President, etc., Delaware & Hudson Canal Co. v. Pennsylvania Coal Co., 50 N. Y. 250; Seward v. Rochester, 109 N. Y. 164, 16 N. E. 348; Sweet v. Morrison, 116 N. Y. 19, 22 N. E. 276; National Contracting Co. v. Hudson River Power Co., 170 N. Y. 439, 63 N. E. 450, 192 N. Y. 209, 84 N. E. 965. |