to be named by them in case they should disagree. The defendant, the valuer appointed on behalf of the plaintiff, the incoming rector, through ignorance of the true principle for the valuation of ecclesiastical dilapidations, valued so favorably to the other party that his valuation was accepted, and consequently the matter never went to the umpire. As Mr. Justice Williams observed in the course of the argument (), "the substance of the thing is, that there is no submission until the matter goes to the umpire." In no sense can that case be an 39] authority on the *present occasion. Upon the second point, therefore, I am of opinion that my Lord was right in nonsuiting the plaintiff.

BRETT, J. The plaintiff was nonsuited upon two grounds. It was agreed at the trial that he was properly nonsuited, if the ruling of the Chief Justice was right on either ground. It seems to me that the same result must have followed if no such agreement had been come to at all. The first ground of nonsuit was upon the construction of the contract. It was conceded that, if the construction put upon it by my Lord was right, viz., that the subject of the contract was fruit of "fair average quality generally," the plaintiff was properly nonsuited. On the other hand, it was conceded by the defendant, that, if that construction was wrong, and the contract was for fruit of the growth of 1869, the nonsuit ought to be set aside. I must confess that, taking the contract and the evidence as it stood, I entertain considerable doubt. My impression is that there were no sufficient materials before the Court at the trial to enable either my Lord or the jury to say what was the true mercantile meaning of the contract. If it had been shown that there was in the trade a known and recognized average quality of Black Smyrna raisins, the construction which my Lord put upon the contract at the trial would undoubtedly have been correct; but I incline to think that, if there was no such recognized and acknowledged general average quality, the proper construction of the contract would be that it meant "fair average quality of 1869 growth." There was, however, no evidence one way or the other. But I think it is quite unnecessary for us to determine what is the true construction of the contract, because I

think the Lord Chief Justice was clearly right upon the second point. The ruling upon that was, not that the defendant was in the strict sense of the term an arbitrator, but that he was a person filling a position which brought him within an exception well known to the law of England, viz., that a person who is appointed and is acting as an arbitrator to determine a matter in difference between two or more persons does not enter into an implied promise to bring to the performance of the duty intrusted to him a due and reasonable amount of skill and knowledge. The question is merely one of *implied [40 undetraking; and the law says there is none such. Was, then, the defendant within that exception? I apprehend that every person falls within it who has taken upon himself to determine a disputed matter between two persons who have agreed to be concluded by his opinion. The parties had so agreed here: and that opinion could not be called for until the fact was in dispute. The defendant, therefore, was a person who was appointed conclusively to determine a disputed fact. One requisite of an arbitration is thus given in Russell on Arbitration, 4th ed. 38:"The parties must manifestly intend to be concluded by the decision of the person called in, in order to clothe him with the authority of an arbitrator." It is said that the present defendant is not a person in that position, because he was something else besides an arbitrator; he was the broker who negotiated the contract between the parties. I cannot see why his freedom from liability as arbitrator should be taken away from him because he had undertaken another duty, as broker to make the contract. In the latter capacity, I agree that he would be bound to exercise ordinary care and skill; but, when he became the person who was to determine the dispute as to the quality of the raisins, he was clearly brought within the exception. Jenkins v. Betham (1) was relied on for the plaintiff. That case, however, only goes to show that the defendant might have been liable for want of due care and skill as broker in making the contract. Williams, J., there points out that the duty of the umpire must be called into action before there was any submission at all. It was of the defendant's conduct as valuer that the plaintiff complained. Just as here, if the defendant had shown a want of due and reasonable care and

(1) 15 C. B., 168; 24 L. J. (C.P.), 94.

skill in making the contract, he might have been liable for that; but not to the present action. The following was cited from Russell on Arbitration, 3d ed. 42 (4th ed. 38), for the purpose of showing that this defendant was not an arbitrator,-"It is not in every case where two parties intend to be concluded by the decision of a third party that the third person is an arbitrator." That may or may not be true; and I will not stop to inquire whether the authorities cited bear out the position. It is not necessary to decide it. Upon the whole, I am satisfied 41] that the ruling of the Chief Justice upon the second point was right, and that this rule must be discharged.

BOVILL, C.J. Neither party required any question to be left to the jury. It was treated by both as a question of construction upon the terms of the contract itself. I consulted my Brother Willes upon both points; and, acting upon his advice, I stopped the case.

As to the first point, it is to be observed that the subject of the contract is "Black Smyrna raisins:" then follow stipulations as to what the raisins were to be, their mode of packing, &c., each being separated by a dash, the effect of which is to make each stipulation a separate sentence,- or as if each had been written in a separate line. In the first place, they are to be "1869 growth:" next, they are to be "fair average quality in opinion of selling broker." What is the meaning of that? The plaintiff contends that they were to be of fair average quality and also of the growth of 1869. Those are not the words of the contract. Are they the meaning? Do the two expressions mean the same thing? The whole case proceeded upon the assumption that the two are different. The plaintiff's case was, that the whole of the shipments of 1869 were of inferior quality to those of former years; and that, in truth, "fair average quality generally" was different from "fair average of 1869 growth." Several witnesses stated that the raisins tendered in fulfilment of the contract were not of fair average quality generally. That being so, and the words used being "fair average quality," it seemed to me that they ought not to be read as if the words "of 1869 growth" had been inserted after the words "fair average quality." There would, it was urged, be a difficulty in ascertaining the fair average

quality of the growth of 1869 at the date of the contract; and that the buyer ought to be able to ascertain the quality of the fruit at the time of the contract, or at all events at the time of the delivery or tender. But, if the parties had intended to stipulate that the quality should be of the average of the particular year's growth, they might easily have done so, as is usual in corn contracts. I retain the opinion I expressed at the trial. I think the words "fair average quality "apply to "Black Smyrna raisins," the *subject of the contract, and [42 not to "1869 growth," which is in a separate sentence.

Upon the other question, viz. whether an action can be maintained against the broker, who is admitted to have acted bonâ fide, I see no reason to dissent from the conclusion arrived at by my learned Brothers. The selling broker was the person selected by both buyer and seller to determine whether or not the raisins tendered were of fair average quality. It by no means follows that, when two persons submit a matter in difference to the arbitrament of a third, they agree to take a person of the greatest amount of skill or intelligence. No matter what may be the degree of skill he possesses, the decision of the person selected is final and conclusive; and he is not liable to an action if he makes a mistake. Here, it is want of skill only that is suggested. The defendant was in the nature of an arbitrator chosen by the parties, whose decision is final. Upon general principles, no action lies against him. There is no implied contract on his part, except that he will act honestly and bonâ fide.

Attorneys for plaintiff: Thomas & Hollams.
Attorneys for defendant: Stibbard & Beck.

Where the parties agree that a third person shall determine whether goods to be delivered comply with the terms of a contract the decision of such third person on the question is final and con

Rule discharged.

clusive. Clinton v. Brown, 41 Barb., 226; Delafield v. James, 27 How., 357, 18 Abb. Prac., 221; see also Prentiss v. Farnham, 22 Barb., 519.

1871

Phosphate of Lime Co. v. Green.

Nov. 11, 1871.

43] *THE PHOSPHATE OF LIME COMPANY, LIMITED V. GREEN and another.

Law Reports, 7 Common Pleas, 43.

Public Company - Power and Authority of Directors - Ratification by Shareholders of an Act ultrà Vires of the Directors.

A company was established for the working of two mines, with a nominal capital of 300,000%., divided into 12,000 shares of 251. each. Difficulties arising as to the title to one of the mines, and the defendants, who had negotiated the purchases for the company, and were to receive 10,000l. from the vendor of each mine, and had received the 10,000%. upon the completion of the purchase of the other mine, having bought 400 shares in the market and not being prepared to take them up, applied to the company for assistance, and the latter advanced them 65007. upon the defendants undertaking to return it in the event of the purchase of the second mine not being completed within three months. The shares were taken up, but the contract for the purchase of the mine ultimately went off. The directors then called upon the defendants to return the 6500%., and, after much negotiation, it was arranged that the defendants should transfer to the company the 400 shares (107. paid up), in satisfaction and discharge of the claim of the company against them. This transaction took place in August, 1866; and in March, 1867, at a meeting of the shareholders it was agreed that the company should go into liquidation, and its business be transferred to a new company with a diminished capital and 10%. shares, the directors of the new company being the directors of the old one, and the shareholders in the old company being holders of share for share in the new one. A report of the directors was read, showing the reasons for the liquidation and transfer, and that the diminution of the capital was owing partly to the abandonment of the purchase of the second mine and partly to" shares forfeited for non-payment of calls." At this meeting an account was handed to each shareholder present, in which the sum of 4000l. was set down as the price of " shares cancelled;" and the account of the defendants in the company's ledger was credited with 40007., " as per shares forfeited account."

By the articles of association of the company the directors were prohibited from purchasing their own shares; but they had power to compromise debts due to them, and to forfeit shares for non-payment of calls:

Held, that, assuming that the compromise with the defendants by the acceptance and cancellation of the 400 shares was ultrà vires of the directors, the subsequent conduct of the shareholders in assenting to the transfer of the old to the new company, with knowledge or the opportunity and means of knowing, if they thought proper to inquire, that such transfer was in part founded upon such cancellation, was a ratification and acquiescence in what the directors had done, and sustained a plea of accord and satisfaction to an action brought in 1870 against the defendants in the name of the old company for the recovery of the 65007. advance.

To show assent and acquiescence in such a case, it is not necessary (or possible) to prove the acquiescence of each individual shareholder. It is enough to show circumstances which are reasonably calculated to satisfy the Court or a jury that