PART III.

8 & 9 Vict., c. 109.

Such was the state of the law at the commencement of the present reign, until it was attempted to deal with wagers by a broad and general enactment, which, however, left the provisions of the Act of William IV. untouched.

The Statute 8 & 9 Vict., c. 109, s. 18 provides “that all contracts or agreements, whether by parol or in writing, by way of gaming or wagering shall be null and void, and no suit shall be brought or maintained^[85] in any court of law or equity to recover any sum of money or valuable thing alleged to be won upon any wager or which should have been deposited in the hands of any person to abide the event on which any wager should have been made. Provided that this enactment shall not be deemed to apply to any subscription, contribution, or agreement to subscribe or contribute for or towards any plate, prize, or sum of money 29to be awarded to the winner or winners of any lawful game, sport or pastime.”

Section 15 of the Act repeals the Statute of Charles II., and so much of the Statute of Anne as was not altered by 5 & 6 William IV., c. 41, and so much of 18 George II., c. 34, as related to the Statute of Anne or as rendered any person liable to be indicted and punished for winning or losing at any one time at play or by betting, the sum of £10 or £20 within 24 hours.

General effect of statute.

It will be observed that this statute includes under one sweeping enactment all contracts by way of wagering, and therefore has a much wider application than the previous Statutes of Charles II., Anne and William IV., which, as has been before pointed out, apply only to wagers on games and pastimes. Further, the statute introduces a change in the attitude of the law towards transactions of this description in that they are in no sense declared illegal; and all the penal provisions of the earlier statutes are expressly repealed. It merely makes them void and incapable of legal enforcement, or, in the language of Lush, J., in the case of Haigh v. Town Council of Sheffield,^[86] a wager is made “a thing of a neutral character; not to be encouraged, but not to be absolutely forbidden; it leaves an ordinary betting debt a mere debt of honour, depriving it of legal obligation, but not making it illegal.” The wording of the statute seems moreover to be framed so as to cover the case which arose in Pugh v. Jenkins,^[87] where the parties made a bet on a race which had already been run, but the event was unknown to either, and it was held that the earlier statutes applied only to wagers before or at the time the gaming was going on.

It may be convenient in the present place to consider what is the precise operation of this statute on contracts within 5 & 6 William IV. That statute declared that securities for the payment of bets on games and pastimes (including horse-racing), as well as all contracts 30for the payment of the same, shall be deemed to be for an illegal consideration; at any rate, that is the effect given to the statute by Applegarth v. Colley. |? Combined effect of 5 & 6 Wm. IV. and 8 & 9 Vict.| It might well be questioned whether 8 & 9 Vict. c. 109, s. 18, leaves that statute unaffected (in which case all such contracts would still be illegal), or whether the wording of the Act is not sufficiently wide to embrace such contracts and make them merely void like other wagers, that is, in the language of Sir Montague Smith in Trimble v. Hill,^[88] to “abolish the distinction between legal and illegal wagers.” Of course the latter construction leaves the seeming anomaly of a contract being merely void when standing by itself, but illegal when forming the consideration for a bill of exchange or other security. It is, however, submitted that this is the true view of the matter. There is good reason for declaring such a consideration for a bill of exchange illegal, because there are certain well-known rules of law relating to bills of exchange given for illegal consideration, rules based on convenience, and designed for the protection of innocent holders; and it was, no doubt, thought advisable to put bills given for betting debts on the same footing. It is a strong argument in favour of this view that in nearly all the cases of actions in respect of betting transactions (where the bet was on a horse-race or other game) it seems to have been almost assumed that such gaming is only void under 8 & 9 Vict., c. 109: at the same time with the single exception of ex parte Pyke^[89] the point does not seem to have been raised; but in that case it was argued that the effect of the Statute 5 & 6 William IV. was, as interpreted by Applegarth v. Colley,^[90] to make bets on games, &c., illegal. The point, however, was not decided, as the Court held that the facts did not bring the case within the statute. There is at any rate no question that wager-contracts are avoided only, and not rendered illegal by virtue of 8 & 9 Vict., c. 109. |Wagers void, not illegal by 8 & 9 Vict.| It is not necessary to refer to every case which recognises that fact. The following are perhaps the cases 31which best illustrate the difference in the effects of illegal and void contracts.—Inchbald v. Cotterill,^[91] where a broker sued for work and labour done and money paid at defendant’s request, in and about the purchases and sales of shares in a Railway Company. Held, that even supposing the “money paid” could not be recovered, there was no answer to the count for work done: and as there was nothing illegal about paying money on gaming transactions (as there was under Barnard’s Act), the rest of the consideration was not tainted. In Thacker v. Hardy^[92] and Read v. Anderson,^[93] the agent was assumed entitled to indemnity from his principal in respect of gaming transactions entered into on his behalf, which he clearly would not be entitled to recover in respect of illegal contracts. So in Fitch v. Jones,^[94] where a bill was given for a betting debt not illegal within 5 & 6 William IV., it was held that a merely void consideration did not throw the onus on to the indorsee’s shoulders of proving that he was a bonâ fide holder for value.

Indian Law.

It may be advisable here to notice that the Indian Contract Act contains provisions of a very similar character. By Art. 30, “all agreements by way of wager are void; and no suit shall be brought to recover anything alleged to be won on any wager or entrusted to any person to abide the result of any game or other uncertain event.

“This section shall not be deemed to render unlawful a subscription or contribution or agreement for any subscription or contribution for any plate, prize, or sums of money of the value of 500 rupees or upwards, to be awarded to the winner of any horse-race.”

It is evident that nearly all the cases decided on the English Statute will apply to these provisions of the Indian Act.

The questions which have arisen as to the construction and effect of the Statute 8 & 9 Vict., c. 109, s. 18, may 32perhaps be grouped under the three following main headings.

I.—What are contracts by way of gaming within the statute.

II.—The effect of the declaration that “no action shall be brought,” &c.

III.—The proviso in favour of a subscription or contribution to a prize.

I.—Contracts by way of gaming.

I.—Under this heading the following topics are of importance.

Consensus ad idem.

(1) There must be a consensus ad idem by both sides to the agreement, and that consensus must relate to an agreement, which of itself constitutes a wager. It is not sufficient that one of the parties should have it in his mind to speculate or gamble, terms which are used metaphorically and are inclined to be misleading: it is essential that the other party should be privy to and assist in the intent to wager. It is of great importance to bear this in mind in dealings on the Stock Exchange, where a purchaser may simply buy for the purpose of selling again, receiving the difference in price in case of a rise. The vendor is probably entirely ignorant of the purchaser’s ultimate intentions. If this is so the contract cannot be in the nature of a wager, as is dearly laid down in Marten v. Gibbons^[95] and Thacker v. Hardy.^[96]

One must win, the other must lose.

(2.) It is essential to a wager-contract that “one party should win and another should lose upon a future uncertain event.... Some transactions, however, on which the parties may win or lose upon a future uncertain event, are not within 8 & 9 Vict., c. 109; for instance, the sale of next year’s apple crop, in which the parties may be losers or winners, but the essential element of a wager-contract is wanting.”^[97]

It is probable that the Lord Justice did not mean this to 33be an exhaustive definition of a wager, as it seems to omit one important requisite, viz., mutuality. |Mutuality necessary.| If a man promises to give his wife a new ball dress if the gold mine pays a 10 per cent. dividend for the current half-year, this would scarcely be a wager, as the wife would not stand to lose anything. That this is the ordinary understanding on the subject is clear from the fact that by the “Rules of Betting” it is no bet unless there is a possibility for each to lose as well as to win. Under the old law, when wagers were enforceable, one party could not have sued the other unless the other would have been able to sue him. In Blaxton v. Pye^[98] the plaintiff laid odds of 14 to 8 against a horse to the defendant. By the then law no greater sum than £10 could be recovered on a wager, so that the defendant could not have sued the plaintiff if the horse had won. The horse lost, but held that the plaintiff could not recover the £8 on the ground of want of mutuality.^[99]

(3.) It is, however, clear that not every contract which contains the element of mutual promises to pay is a wager. A builder agrees with an owner of land to build a house by a certain date, he to be paid £1,000 on completion; in default, he to pay £100 by way of penalty. This would not seem to be a wager. On the other hand, if A promises to pay B £100 if the house be finished by the time fixed, and B promises to pay £100 if it is not, both A and B being independent of the building contract, this would appear to be a wager. It is submitted that the true test is that in a wager the sole elements of the contract must be made up of the reciprocal promises to pay on the happening of given alternative contingencies.^[100] A promises to pay B on the happening of contingency x, B promises to pay A on the happening of contingency y; y, of course, may be negative, such as the non-happening of x. The difference between the two is illustrated by an ordinary bet on a horse race. A backs a horse with B; B is popularly said to “lay against” the horse, i.e., to back the negative contingency of the horse 34not winning. As a matter of fact, “the layer” backs “the field.”^[101] Each event or contingency must, of course, be uncertain, or, at all events, unknown to the parties, that is, it represents a chance, and where the chances are agreed to be uneven the inequality is represented by odds. It must not, however, be supposed that a wager necessarily embodies the backing of conflicting opinions; the parties back their respective chances or contingencies, not their opinions on them, e.g., a man backs a horse for a race at a long price: if the horse goes to a much shorter price, he will very likely hedge by backing the field against him, though feeling certain that he will win. (See Appendix C.)

It is not necessary that the event should be independent of the control of the parties, e.g., two persons agree to run a match for £5 a side.

This criticism certainly seems to suggest the distinction between the two cases above given of agreements with respect to the completion of the building. The first case contains more than mutual promises to pay on contingencies—it is a contract of personal service, an agreement to do something at the request of another. The second case contains no such element; the sole factors of the contract are the mutual promises to pay each other on the happening of their respective events. It is easy to apply this test to such ordinary wagers as bets on horse races, and to the less common cases of wagers on the rise or fall of stocks on difference bargains. (See more fully as to this the chapters on Stock Exchange Transactions.)

Substance rather than form of contract important.

(4.) In conjunction with the last proposition a rule may, perhaps, be stated as follows, that it is not the form, but the substance of the contract that is important. Thus, in Hill v. Fox^[102] the loser of several bets borrowed £2,000 from one of his creditors, and paid him the bets out of the money. The lender sued to recover the money lent. The Court held that if at the time of the advance there was an “agreement or stipulation” that the bets should be repaid 35out of the £2,000, then the transaction was merely a colourable evasion for obtaining a security for a betting debt; but that if the borrower were at liberty to do as he pleased with the money, even though the lender hoped that he would be repaid out of the money, then it would be a bonâ fide loan, which could be recovered. So in Rourke v. Short,^[103] the plaintiff was about to sell some rags to the defendant, when a dispute arose about the price of a former lot of rags, the plaintiff asserting them to have been of one price, and the defendant said they were sold for more. |Wagers under guise of sales.| They agreed to refer the dispute to M, a wine and spirit merchant, and that whichever party was wrong should pay M for a gallon of brandy, and that if the plaintiff was right the price of the present lot should be 6s. per cwt., but if the defendant was right the price was to be 3s. M decided that the plaintiff was right. Plaintiff tendered the rags to the defendant, but he refused to accept them at 6s., but offered 5s. The plaintiff sued to recover the higher price, and defendant pleaded that it was a wager within the statute. The Court held that the plea was good, as the contract was, both in form and substance, nothing but a wager; it was not like a case of determining the price by the mere ascertainment of the former price. It was not the value of the goods that was to be determined, but the correctness of the parties’ opinions. In the course of argument, Grizewood v. Blaine^[104] was quoted. In that case it was held that a contract nominally for the sale of shares, but in reality an agreement for the payment of differences was a wager. But in the present case Lord Campbell observed that the contract was in form a wager, and that it lay on the plaintiff to show that it was in substance something else.

With this case should be compared Crofton v. Colgan.^[105] There the agreement was that the defendant should take the plaintiff’s mare in exchange for his own; and that defendant should give plaintiff half the winnings of her first two races, or in case she should be sold before then, defendant should pay plaintiff one-third of what she should be sold for. 36Held that this was not a wager, but only a means of assessing the price of the mare in certain events.

Sale with contingencies.

It is not difficult to apply the decision in this case to a transaction which is by no means uncommon in respect of a race horse, viz.: a sale with contingencies, i.e., where the purchaser agrees to pay the seller a share of whatever the horse may win in any one or more engagements. Such a contract is in no way a wager.

Brogden v. Marriott, 3 Bing., N.C.

On the other hand, in Brogden v. Marriott,^[106] the agreement was for the purchase of a horse for £200, if he trotted 18 miles within a hour, and for a shilling if he failed. The Court held that this was simply a wager on a trotting match against time, and so void under the Statute of Anne.

Agreement with a tipster for a share of winnings.

In Higginson v. Simpson^[107] the plaintiff was what is known as a “tipster,” or a person who supplied other persons with information as to likely winners of races, and had supplied defendant with the name of a horse called Regal for the Grand National, and it was agreed between them that the plaintiff should have £2 on Regal, at 25 to 1 against that horse for that race, i.e., that if the defendant backed Regal and the horse won the plaintiff was to have £50, but if it lost plaintiff was to pay defendant £2. Defendant backed Regal, and it won; and plaintiff sued to recover £50. The Court held that it was necessary to look not only at the form of the contract, but also at the substance; that even if one element in the contract was the remuneration of the plaintiff for his personal skill, yet “the ultimate effect of the bargain was to be wholly dependent upon the occurring of an event over which neither party had any control.” But see Appendix A, where some observations on this case are suggested.

Stakes deposited on horse-races, games, &c.

(4.) There appears to be no difference between competing in horse-races or games for stakes deposited by the competitors, and betting on the competitors; both are equally agreements by way of wagering. Thus until the passing of the Statute 3 & 4 Vict., c. 35, horse-racing was subject to certain penal restrictions. Even after it had been legalised 37generally by that statute, it was held in Bentinck v. Connop^[108] that the only effect of the statute was to exempt it from the penal provisions of earlier statutes; it did not make wagers on horse-races recoverable: consequently where two or more persons agreed upon a horse-race for certain stakes (not deposited), it was held that such an agreement was a wager and nothing more; so that the winner could not recover the stakes from the loser. So in the more modern case of Diggle v. Higgs^[109] the Court construed an agreement between two persons for a walking match for £200 a side as a wager. We shall have occasion to revert to this case again when we come to treat of the difference between a wager and a contribution to a prize.

Distinction between “stakes” and “sum added.”

An important distinction was drawn in the case of Applegarth v. Colley,^[110] between stakes contributed by the competitors (which were then irrecoverable under certain circumstances) and a “sum added” by a third party as part of the prize to the winner. The latter it was held could be recovered by the winner. A race for a prize given by a third party seems to lack one of the elements of a wager suggested above, viz., that “one must win and the other must lose;” for while one party might be said to win the prize, the other cannot be said to lose it.

If then, as it is submitted, an agreement for an ordinary horse-race for stakes deposited or subscribed by the competitors themselves is in strict law a mere wager, it must be borne in mind that the law as to depositors and stakeholders, the determination of the authority of the latter, &c., is applicable to such cases. A full account of the cases on this subject is given post p. 60 et seq.

It must be remembered moreover that since the passing of 8 & 9 Vict. c. 109, s. 11, which avoids “all contracts by way of wagering,” the distinctions drawn in Applegarth v. Colley with regard to prepayment and the amount of the stakes will only hold good so far as it affects a cheque given in payment of the stakes. This has been explained above, Cap. I., Pt. 2.

Void nominations—could executors pay stakes?

38This view of the law has an important bearing on a question which was a great deal discussed not long ago as to the propriety of the rule (Rule 86 of the Rules of Racing) which provides that all entries become void on the death of the nominator or person in whose name the entry is made. It has been urged that executors ought to have the option of paying the stakes and so adopting the horse’s engagements (see the leading article in The Sporting Life, December 21, 1885). But even if the rule were altered to allow of this, it seems impossible to escape from the decision just referred to—that the payment of stakes in respect of a horse-race is nothing less than the payment of a wager between the competitors. |Or forfeits.| The difficulty would occur in the payment of “Forfeits,” which seem to be in the nature of a penalty for not keeping a horse in his engagements. As we shall point out hereafter a penalty payable on making default in a wager cannot legally be recovered, post p. 63. |Executors cannot pay betting debts.| It is perfectly clear that an executor must not pay the gaming debts of his testator. See Manning v. Purcell.^[111]

When we come to the law as to stakeholders, we have occasion to make one or two suggestions as to the rights or duties of executors where their testator has actually paid in respect of entries, stakes, &c.

If the rule were altered as suggested, it would be wise for turfites to give their executors full powers in their wills.

Rescission by wager.

(5.) Sometimes a valid contract is attempted to be rescinded by a wager, e.g., if A is indebted to B in a certain sum, and they agree to toss for “double or quits.” It seems clear that this being simply a wager would not be valid, and that A’s original liability would remain.

In Wilson v. Coleman^[112] plaintiff had contracted to take a lease of defendant’s house, having paid a deposit of £25. Defendant offered plaintiff £50 to rescind the agreement, which plaintiff refused. The parties then tossed whether the contract should be rescinded for £50 or £75. The defendant won, and plaintiff sued to recover £50. The Court interpreted the agreement as an absolute rescission for £50 39with £25 more if plaintiff won the toss. The two bargains were therefore separate, and the first part of the agreement was not vitiated by the second part being a wager. Otherwise the whole rescission would have been void.

Speculative sales or purchases.

(6.) Speculative sales, that is, of goods or merchandise not in the possession of the vendor at the time of the contract, are neither illegal at Common Law, nor are they wagers within the statute. But in the early part of this century a doctrine was propounded that they were illegal. Thus, in Bryan v. Lewis^[113] the plaintiff sued a broker for negligence in carrying out instructions for the sale of nutmegs. It appeared that the plaintiff was not the owner of the nutmegs at the time, but intended to go into the market and buy. Abbott, C. J., who had previously, in Lorymer v. Smith,^[114] said that such contracts were not to be encouraged, now laid it down that no action could be maintained on a contract to sell goods which he has not in possession at the time, but which he simply intends to go and purchase in the market, adding that “the law was not new.” The ground of this opinion seems to have been, that such contracts amounted to a wager on the price, and had a tendency to make prices unsteady; at any rate, this was the line of argument adopted in Hibblethwaite v. M’Morine,^[115] in 1839, when the same point came before the Court of Exchequer; but the Court unanimously overruled Bryan v. Lewis. |Engrossing.| There was an offence at Common Law, known as “Engrossing,” which meant buying up large quantities of goods with intent to sell them again, which seems to hinge upon the same principle as the speculative sales denounced by Abbott, C. J. But the law in this respect, which had long been a dead letter, was repealed by a statute, 7 & 8 Vict., c. 24.

Besides, as was said in Thacker v. Hardy,^[116] and Martin v. Gibbons,^[117] neither the sale of next year’s apple crop nor of the next haul of a fisherman’s net were wagers.

The selling of public stocks, not in the possession of the 40vendor, was made an offence by Barnard’s Act, but this was repealed by 23 & 24 Vict., c. 28. It was decided by Lindley, J., in Thacker v. Hardy^[118] that there was nothing contrary to public policy, as was contended, in making large purchases on the Stock Exchange by way of speculation, i.e., for the purpose of reselling at an advanced price. It is fortunate that already too elastic phrase “contrary to public policy” was not allowed to stretch to so unreasonable a length, as it is difficult precisely to estimate what the result would have been to the business world if such a contention had prevailed.

The law as now settled in England has been incorporated into the Indian Contract Act, Art. 88 of which provides that “a contract for the sale of goods to be delivered at a future day is binding though the goods are not in the possession of the vendor at the time of the contract, and though he has not at the time any expectation of acquiring them otherwise than by purchase.”

Contracts between principal and agent not wagers.

(7.) Questions frequently occur as to the rights as between principal and agent when the latter has been employed by the former to make a wager for him. We have then to consider—

(a.) The rights of the principal against the agent.

(b.) The rights of the agent against the principal.

The general result appears to be, that the contract between the principal and the agent, by which the latter undertakes to carry out wagering transactions on behalf of the former, does not itself partake of the nature of a wager.

Rights of principal against agent.

(a.) It seems that if an agent employed to bet for a principal receive money in respect of winnings he is liable to account to his principal for it. The obligation of the agent arises not by virtue of a contract by way of wagering, but out of an implied contract to pay over money received to his principal’s use; it is in fact a new and independent contract. There is, it is true, a decision of Stuart, V.C., to a contrary effect. In Beyer v. Adams^[119] the loser of a bet paid 41the money into the hands of the plaintiff’s betting agent, who had negotiated the bet for him. The agent died and the plaintiff sought to prove against his estate in respect of the sum the agent had received. His honour held that the claim could not be sustained. “The language of the statute was perfectly general as to the persons against whom an action was not to lie; and did not solely apply to actions against the loser of a wager. The cases quoted in support of the claim only decided that the receipt of money by the agent was a good consideration for a bill of exchange, as in Johnson v. Lansley. Those cases like Tenant v. Elliott which showed that an agent could not set up illegality against his principal only dealt with general principles, and not with the words of an express Act of Parliament.” It is no doubt a perfectly true distinction between that case and the earlier ones, and that the latter turned on the question of sufficiency of consideration for a bill of exchange, and the same was the case in Beeston v. Beeston, where Amphlett, B., expressly reserves the question “Whether the defendant could keep the money in his pocket if he won?”

Partners.

In Johnson v. Lansley^[120] the plaintiff and A were partners in betting transactions. A received the whole of the winnings, and endorsed to the plaintiff a bill accepted by the defendant in payment of plaintiff’s share. Defendant pleaded that the statute deprived the plaintiff of his remedy, but held that the consideration for the endorsement was money for which A was bound to account to plaintiff, and the statue did not relieve him from that liability.

Savage v. Madden.

Again, in Savage v. Madden^[121], where plaintiff sued defendant for money had and received to the use of the plaintiff, defendant pleaded that the money was due to plaintiff on wagers upon a horse-race. Baron Martin said: “If I were called upon to give a judgment on this plea, I should be disposed to say it was bad, as it does not allege that the money was won by the plaintiff from the defendant himself. I think the common form of an account stated would be all 42satisfied by the money claimed by the plaintiff having come into the hands of the defendant, a third person for the purpose of his paying it over to the plaintiff.”

It is quite clear that his lordship considers the obligation of an agent who has received money won on a wager on behalf of his principal, to pay over what he has received is in no way a wagering transaction in itself, though it may arise out of such. This seems in accordance with the view of Baron Pollock in Beeston v. Beeston^[122], that the statutes only apply to contracts as between the parties to the wager.

This view of the matter has lately been confirmed by the Court of Appeal in Bridger v. Savage^[123], so that Beyer v. Adams must be considered as overruled. Seeing, however, that in these cases the transactions were not illegal, they must not be considered as deciding a somewhat vexed question whether a principal agent or a partner can recover, and where the transactions are illegal, |Qy. if transaction illegal.| as for instance, under the Gaming House or Betting House Acts, we shall deal with this subject in the chapter on such establishments.

Actions of this description, that is, by principals against their agents for money received, have of late been numerous, as well as by agents against their principals to recover commission and reimbursements; but of this latter class of action we speak later on. Experience seems to show that the advantage is on the side of the agent, seeing that the plaintiff has to prove facts which are generally solely within the agent’s knowledge. |What principal must prove.| (1) The agreement between himself and the agent. Where this agreement is in writing, as where the parties have contracted on the footing of written conditions, the difficulty should not be great; but frequently the instructions are given verbally. (2) That the agent made the bet in his, the plaintiff’s, behalf. If he did not, of course no action could lie for money had and received. |Cohen v. Kittle.| In the case of Cohen v. Kittle^[124] this difficulty was felt; consequently an alternative claim was inserted in the pleadings for damages 43for breach of contract in neglecting to make the bet. The case was ultimately fought in the question whether such an action was maintainable. The Court held chiefly on the authority of Webster v. De Tastet^[125] that no such action would lie, seeing that even if the agent had made such a bet the plaintiff could not have enforced it legally against any third party.

It is, however, submitted with great deference that this decision is incorrect. It appears to confuse two distinct questions: (a) whether the action would lie; (b) proof of damage sustained. Betting contracts not being illegal there would seem to be no reason why the breach of an agreement to make a bet should not be a cause of action. Webster v. De Tastet was an action to recover commission on a policy contrary to the policy of the law. It, moreover, did not appear that there was any conventional forum by which such a policy could have been enforced. In most betting transactions the agent belongs to a club, the committee of which would enforce any bet that was made against a defaulter by the penalty of expulsion.^[126]

The Gaming Amendment Act.

It is noticeable that Lord Herschel’s Act, the Gaming Act Amendment Act, of which further mention will be made hereafter, while preventing an agent from recovering commission or reimbursement from his principal, does not contain a reciprocal restriction on the principal’s right to recover winnings from his agent; consequently the principal’s rights against his agent, as established by the cases above quoted, remain untouched. Seeing, however, that, by Lord Herschel’s Act, the agent cannot recover his commission in respect of his services, he would seem now to be in the position of a gratuitous agent, in which case no action would lie against him at the suit of his principal for neglecting to carry out his instructions unless, semble, he receives his commission in advance.

(3.) The plaintiff also has to show that the agent received the money in respect of his bet. This proposition scarcely 44requires authority. See, however, the dictum of Hawkins, J., in Cowan v. O’Connor;^[127] but it is sometimes a difficulty in the plaintiff’s way. No doubt it is not necessary to show that actual cash passed. |Payment by set off.| If the agent settled with the bookmakers by balancing accounts with him, this would no doubt be equivalent to payment.^[128]

Estoppel of agent.

The case of Moore v. Peachey^[129] will no doubt go some way to remove the plaintiff’s difficulty in this respect. Charles, J., held that the defendant having entered into an agency agreement, and from time to time rendered accounts to the plaintiff, showing bets to have been made and moneys received or paid on his behalf, was estopped from denying the truth of his representations.

It must, however, be admitted, for it is common knowledge, that the documents passing between the supposed principal and agent do not represent the real facts. In a majority of such cases the agent is a myth; he is in reality a bookmaker making a book with his different clients, that is if his clientèle is sufficiently large. If not, a common course of business (and this has frequently been proved in the Courts) is for him to lay his clients the odds at a point or two below the market odds, and “back the horse back” in a club at the longer odds. Of course, if this be professedly his business, he is amenable to the provisions of the Betting House Act (as to which see post). That is no doubt the reason why he affects to act as agent; but Moore v. Peachey (ubi sup.) says that he cannot afterwards turn round and say he was a principal.

Rights of agent against principal.

(b.) The next class of cases in which the application of the statute has come in question is where an agent has been employed to enter into wager-contracts on behalf of a principal; the bets are lost; the agent pays, and seeks to recover from the principal.

Upon this matter two distinct questions have arisen.

I. Whether an authority to bet implies an authority to pay the bet if lost.

45II. Granted such implied authority, can the principal revoke the authority to pay, after the event has been determined, and before payment has been made?

Does authority to bet imply authority to pay?

I. Upon this question none of the older authorities go very close to the mark. Thus in Oulds v. Harrison^[130] the defendant employed one Bennett to bet for him, and Bennett laid the bets in his own name on the defendant’s account. The bets were lost, and Bennett, without further authority from defendant, paid them, and drew a bill on defendant for the amounts, which was accepted by the defendant, and indorsed by Bennett to the plaintiff. Plaintiff sued defendant on the bill. For the defendant it was argued that the payment of the debts by Bennett was in his own wrong and not authorised by his agency. But the Court held that defendant by accepting the bill acknowledged that the payments had been made on his account, and that consequently there was a sufficient consideration for the bill. It must be observed that this case did not decide the point, viz., whether an authority to bet included an authority to pay the bets if lost; from a remark of Parke’s, B. (at page 577), “the defendant was not bound in law to repay the drawer,” it would seem that in his view it did not. Jessop v. Lutwyche^[131] turned on a pleading point: the plaintiff, a broker, sued to recover differences paid by him on the sale of certain stocks and shares on behalf of the plaintiff. Defendant simply pleaded the Statute 8 & 9 Vict., c. 109, and it was held that the plea was bad, as being consistent with the plaintiff’s having paid the money at defendant’s express request. The plea in Knight v. Chambers^[132] was overruled on the same grounds.

The case of Rosewarne v. Billing^[133] carried the point no further. This was another action by a broker to recover differences paid for his principal. The defendant pleaded the statute without traversing the averment that the money was paid at defendant’s request. The Court, following the former cases, held the plea bad; but Erle, C. J., in giving judgment, expressed his opinion that an authority to bet 46implied an authority to pay if the bets are lost; and semble that if a broker be compellable by the usage of the stock market to pay losses himself, the principal could not rescind the authority to pay. The older case of Clayton v. Dilley^[134] was decided in the Statute of Anne. The plaintiff, the defendant’s betting agent, sought to recover money he had paid for the defendant without express authority to do so. The bets were admittedly illegal by statute. It was held that plaintiff could not recover on the ground that there being no express direction to pay, it could not be implied in an illegal transaction. This case would therefore seem to have little importance at the present day, betting transactions being void and not illegal. The case of ex parte Godfrey^[135] seems to be the earliest direct decision on the point, where it was held by Bacon, V.C., that money paid by a broker on so-called gaming transactions entered into by him for a principal, was a debt for which a bankruptcy petition might be presented, as the principal knew that the broker was liable under the rules of the Stock Exchange to pay losses, a request to pay on behalf of the principal must be implied. From this decision it would seem that this authority to pay would not be implied unless the principal knew of the liability which the agent was incurring. In Bubb v. Yelverton^[136] (which is reported very shortly) Lord Romilly laid down in general terms that an authority to bet implied authority to pay; but in that case (in which Lord Charles Ker claimed payment out of the Marquis of Hastings’ estate for money paid on lost bets, he having been the Marquis’ agent to bet for him) there could have been no question as to knowledge on the part of the Marquis of the consequences that would result from the agent’s not paying.

The case of Thacker v. Hardy^[137] does not afford much assistance on the present point as to the authority to pay being implied from authority to bet, as according to the view taken of the facts by Lindley, L.J., which view was supported by the Court of Appeal, the transaction does not 47seem to have been in the nature of a wager. The case, however, being an action by an agent for indemnity against his principal, the knowledge of the latter as to the course of business the agent would have to pursue, is made one of the grounds of his liability to his agent.

In Oldham v. Ramsbotham^[138] the question was slightly touched upon in argument, but not noticed in the judgment.

In Lynch v. Godwin^[139] plaintiff at defendant’s instructions and in his presence laid £40 on a horse called Vril for the Ascot Stakes. The horse lost and plaintiff paid the bet. The Court of Appeal held that he could recover the money he had paid from the defendant. Per Jessel, M.R., “If you employ an agent to bet for you, you know that he must pay or be subject to unpleasant consequences. If you do not withdraw your request, it must continue; and if he pays, he pays at your request.” Lindley, L.J., also added a more general proposition that an authority to pay was implied in an authority to bet. It is clear that the agent in this case laid the bet in his own name.

From these remarks of the Master of the Rolls it would seem (1) That the implied authority of the agent to pay depends on the knowledge of the principal that the agent was himself liable legally or otherwise, which knowledge would probably be presumed in cases of betting through regular betting agents, as in both such cases it is well known that the agent is bound by usage to incur personal responsibility. |Is authority to pay revocable?| (2) That the principal might withdraw this implied authority to pay any time before the agent had paid the money over to the winner, and so prevent the agent’s paying on his account.

II. The general rule of law is that where an agent is invested with an authority coupled with an interest, that is, where the authority is given to the donee of such authority for a good consideration for the purpose of securing to him some benefit, such authority is irrevocable.^[140] Now it has of late been a much vexed question whether the express or 48implied authority of a betting agent to pay a bet if lost, where the agent has made the bet in his own name, can be revoked by the principal, or, in other words, whether such authority is so coupled with an interest as to be irrevocable.

Not long ago the very point came before the Courts, in Read v. Anderson,^[141] and this was the first occasion on which it underwent serious discussion. There were a few dicta on the subject—that by Earle, C.J., in Rosewarne v. Billing,^[142] and again the point was mooted in Marten v. Gibbons.^[143] In this case the defendant had, through the plaintiff, a stock broker, sold a future dividend on railway stock to a firm of jobbers. The dividend was eventually declared at a higher rate than that at which the defendant had sold it. Defendant being called upon to pay the difference refused, and revoked the authority of the plaintiff to pay. Plaintiff paid and sued to recover from defendant. Sales of future dividends were not enforceable by the rules of the Stock Exchange. Defendant contended that the authority of the plaintiff to pay had been revoked, but Blackburn, J., in giving judgment said: “If the contract was binding on the plaintiff it was impossible for the defendant to revoke it. If not enforceable and not revoked they would be liable. If not enforceable and revoked, I am inclined to agree that they would still be liable.” But in this case the plaintiffs had, as brokers, entered into a contract which, although not enforceable against them by expulsion according to the rules of the Stock Exchange, left them, in the opinion of the Court, under a legal liability to the jobbers. In a wagering transaction the case is different, as the agent is under no legal liability.

On the other side the dictum of the Master of the Rolls in Lynch v. Godwin seems to imply that the authority in a betting transaction can be revoked.

Read v. Anderson.

In Read v. Anderson^[144] the following were the material facts of the case.

The plaintiff was a turf commission agent, and a member 49of Tattersall’s subscription rooms. The defendant had been in the habit of employing plaintiff to bet for him, paying losses to him and receiving winnings from him. By a well-established usage known to defendant, such commission agent employed to back horses does so in his own name, and becomes responsible for payment if the bet is lost to him. The defendant by telegram instructed the plaintiff to back certain horses for him, which plaintiff did in his own name. The race was fixed for 2 o’clock, and at 3.5 plaintiff handed in at the office a telegram announcing that the horses had lost. Defendant the same evening repudiated the bets, and all liability under them, on the ground that the plaintiff ought to have informed him that he was “on” before the race was run. On the settling day plaintiff paid the bets in question to the winners; had he not done so he would have been liable as a defaulter under Rule 3 of Tattersall’s subscription room to be excluded from it, and also under Rule 50 of the Jockey Club would, on being reported by such committee as a defaulter, have been subject to various disqualifications under Rule 49 of the rules of racing as to entering and running horses. It does not appear from the report of the case that the defendant knew of the specific consequences that would ensue from the plaintiff’s making default in payment of the bets. On behalf of the defendant it was contended (1) That the plaintiff’s authority to bet was subject to an express condition that plaintiff should before the race inform defendant that he was “on.” (2) That anyhow such condition was implied by universal usage. (3) That the bets were wagering contracts that the plaintiff had no authority to pay them, or that if he had such authority was revoked. The judgment of Hawkins, J., proceeded on the following grounds: (1) He found as a fact that there was no such condition, either express or implied, as that contended for by defendant; also that the bets had bonâ fide been made in accordance with the authority. (2) That wagering contracts being only void, and not illegal by 8 & 9 Vict., c. 109, the loser of the bet might lawfully either pay himself, or request somebody 50else to pay for him. (3) That such request might be express or implied, and he found as a fact that defendant, in giving authority to make the bets, also gave authority to pay them if lost. (4) Found, as a fact, that defendant had not revoked this implied authority to pay. (5) Irrespective of the latter finding such authority was irrecoverable as being an authority which plaintiff had an interest in carrying out; as otherwise he would have incurred serious penalties as a defaulter. (6) That the plaintiff’s case might also be put on the following ground: That if one man employs another to do a legal act, which, in the ordinary course of things will involve the agent in obligations pecuniary or otherwise, a contract on the part of the employer to indemnify his agent is implied by law ... and it signifies nothing that such obligation is not enforceable in a Court of Justice. (7) His lordship distinctly reserved the question as to how far these incidents would apply where the agent bets, not in his own name, but in that of his principal.

Indemnity.

Perhaps the more logical and less artificial way of putting the rights of the agent is the alternative suggested by Hawkins, J.—his right to indemnity. The “authority coupled with an interest” seems rather too wide, seeing that the agent has an interest in making the bet directly the instructions are given; yet the judgments seem to recognise that the authority could have been withdrawn before the bet was made.

The case has lately been decided by the Court of Appeal.^[145] Bowen and Fry, L.JJ., affirming the decision of Hawkins, J., Brett, M.R., dissenting. The grounds upon which the Master of the Rolls bases his judgment are that, although an authority might imply an authority to pay, yet, as betting contracts were void, and as the only inconvenience to the agent consists in his being barred from pursuing a calling to which the law wholly objects, no promise could be implied that such authority should not be revoked. His lordship considered that as a matter of fact defendant had revoked plantiff’s authority to pay; thus 51differing on that point from Hawkins, J. Bowen, L.J., treats the whole question as an inference of fact. In his lordship’s opinion, the only inference of fact proper to be drawn was that if the agent carried out his contract, and involved himself in a difficulty, from which he could only escape by paying money, the defendant was to indemnify the plaintiff; further that the plaintiff had paid the bets by virtue of a contract between himself and his principal, that the latter should not revoke the original contract.

His lordship therefore treats the matter somewhat differently from Hawkins, J., for it will be observed that in the Court below, Hawkins, J., treats the implied authority to pay as an inference of fact; which was no doubt amply justified by the previous dealings between the parties, while he deals with the question of revocation of authority as a matter of law.

However, perhaps the result of the authorities may be shortly expressed in the following way:—(1) Authority to pay is implied in authority to bet (a) where the agent lays the bet in his own name, (b) and where to the knowledge of the defendant non-payment of the bet would entail serious inconvenience to the agent.

(2.) That under such circumstances the authority to pay is irrevocable directly the bet has been made.

But it would seem that the cases do not expressly decide how the law would stand in two cases. (1) Where the agent lays the bet, not in his own name, but in that of his principal, thus incurring no personal responsibility. (2) In cases where the principal instructs an agent who is not a professional betting man or not (at any rate to the knowledge of the principal) in any other way connected with the turf so as to incur such penalties for default as the plaintiff in Read v. Anderson would have incurred. Would the risk of mere social obloquy give the agent such an interest in paying the bet, as to make the authority to pay irrevocable? or supposing the agent belonged to a club, a fact which was unknown to the principal, by the rules of which the committee were empowered to expel any of its members who 52failed to discharge debts of honour. It will be observed that in nearly all the cases alluded to above that the principal’s knowledge, actual or implied, of the agent’s responsibility, was the ground of inferring an authority to pay from the authority bet. |Agent’s authority revocable before bet made.| Of course this question of revocation only arises after the bet has been made, when the responsibility of the agent has attached. There is no doubt, as remarked by Hawkins, J., in Read v. Anderson, that the agent’s authority might have been revoked before the bet was made.

In actions against the agent as in Bridges v. Savage,^[146] the defence of wagering and gaming is often raised, i.e., that the person to whom the instructions were given had acted not as agent but as a party to the wager. In the former case it was raised by the principal, who was sued for indemnity; in the latter by the agent, who was called upon to account for winnings. To avoid such difficulties in future it would be wise both for persons who employ commission agents, and for the latter who execute commissions, to have the terms of their bargain definitely in writing. “Please back for me,” “Taken for you,” seem to form a contract of agency on which no such question could arise.

What agent must prove.

Of course the agent must prove that the payment made to the winner of the bet was an authorised payment. In none of the cases as between principal and agent has any dispute arisen either as to whether the bet remained valid to the end, or whether the horse really lost or won. It is however, by no means impossible that such questions might be put in issue. Supposing after the bet was made the nominator of the horse, in respect of which the bet was made, died, so that (at any rate according to the new Rules of Betting) the bet would be off, or supposing defendant had instructed plaintiff to back horse A; horse B is placed first by the judge and A second, but B is disqualified afterwards for reasons which would cause the bets to go with the stakes.^[147] It is obvious that if the agent paid on this as for losses he could not recover 53from his principal. The real point of difficulty is on what evidence the Court would act. It is submitted (1) That the employment of an agent to make bets in a betting market implies an authority to bet according to the rules and usages of such market, and that the Court would look at the Rules of Betting or other document proved to regulate such transactions. (2) That in all bets the question whether a horse is the winner or the loser is impliedly to be determined by the Rules and Conditions under which the particular race is run. We shall hereafter, page 74, deal more fully with the term “winner,” but it will be noticed all the cases thereunder were decided on a construction of the Rules and Conditions.^[148]

Gaming Amendment Act, 1892.

But the law respecting the rights of the agent against his principal has lately been materially altered by the Gaming Amendment Act, 1892, 55 Vict., c. 9. This Act provides that “any promise express or implied to pay any person any sum of money paid by him under, or in respect of any contract or agreement rendered null and void by the Act 8 & 9, Vict., c. 109, or to pay any sum of money by way of commission fee, reward or otherwise in respect of any such contract, or of any services relating thereto or in connection therewith shall be null and void, and no action shall be brought to recover such sum of money.” Of course the cases already dealt with will still apply to transactions which took effect before this statute came into operation. But as to dealings between principal and agent to which the act applies, Read v. Anderson can no longer have any application. As has been pointed out above, the principal’s right of action against his agent to recover winnings remains untouched.

Agent cannot recover from third party.

In Britten v. Cook^[149] the plaintiff made bets on behalf of his principal with defendant, which bets he won. Plaintiff not having received the money from defendant, settled with his principal for the amount, because he would have been subjected to disagreeable consequences if he did not, and sued the defendant for the amount. Held that there 54being no express request by defendant to plaintiff to pay on his behalf, and no implied request, seeing plaintiff was not defendant’s agent, the action would not lie.

No action shall be brought, &c.

II. The next class of cases to consider are those which deal with the interpretation of that part of section 18 of the Act in question, which provides that “no action shall be brought or maintained in any Court of Law or Equity, for recovering any sum of money or valuable thing alleged to be won upon any wager, or which shall have been deposited in the hands of any person to abide the event on which any wager shall have been made.”

Right to recover from stakeholder.

Nearly all the questions which have arisen on this part of the section relate to the right of a party to a wager to recover his stakes from a stakeholder with whom both parties have deposited their stakes. Such questions are of course entirely distinct from the right of the winner to recover the whole stakes from the stakeholder, as they usually occur when one party desires to repudiate the wager, and brings his action before the stakeholder has paid over the money to the winner.

Cases before the statute illegal wagers.

Before the statute 8 & 9 Vict., c. 109, some wagers were legal, some illegal. With respect to illegal wagers it seems never to have been questioned, but that one party could at any time before the money was paid over to the winner revoke the authority of the stakeholder, and demand back his stakes. All the cases recognise the distinction between recovering stakes from a stakeholder and recovering on the wager itself.^[150] And in Hastelow v. Jackson it seems to have been considered that where one of the parties to the wager considering himself to be the winner demanded the whole of the stakes from the stakeholder, whereas the other party had really been decided to be the winner, such demand was a sufficient revocation of the stakeholder’s authority to pay his stake over to the winner. But this decision was doubted in Mearing v. Hellings.^[151]

Legal wagers.

55But with respect to wagers which were legal the decisions were not uniform. Thus in Eltham v. Kingsman^[152] it was held that where two parties to a wager had deposited two watches to abide the event of a wager, which was for the purposes of the case assumed to be a legal wager, either of the parties could, while the contract was executory, revoke the authority of the stakeholder and recover his watch in trover. The Court compared the authority of a stakeholder to that of an arbitrator which was clearly countermandable before he had given his decision. On the other hand, in the later case of Emery v. Richards,^[153] where the plaintiff sued a stakeholder to recover his deposit on a legal foot-race (the sum deposited being under £10). Held that as the contract was not illegal under the Statutes of Charles II. and Anne, neither party could retract without the consent of the other.

All such questions as to the right to recover a deposit from a stakeholder have, since the passing of the Statute 8 & 9 Vict., c. 109, turned out on the construction of the words “no action shall be brought,” &c. |Statute only applies to actions by winner.| There is a long series of decisions to the effect that this provision only applies to actions brought by the winner of a wager either against a stakeholder or against the loser to recover his winnings, and does not prevent either party from revoking the authority of the stakeholder before the money is paid over to the winner, and suing to recover his stakes.

In Varney v. Hickman,^[154] plaintiff and one Isaacs agreed to bet £20 on a race to be run between their respective horses, the stakes being deposited with defendant. Before the race the plaintiff declined the bet and demanded back his deposit. On behalf of defendant it was contended that it was an action within the meaning of the section. Maule, J., in giving judgment, discussed the effect of the part of the section. “The first part of the section,” he says, “declares the contract to be null and void; the second prevents the 56winner from bringing an action to recover the amount of the bet from the loser; the third prevents the winner from suing the stakeholder. It certainly is true that the second branch is involved in the first, i.e., if the section had stopped at the end of the first branch it would have followed that no action could be brought to enforce a contract so declared to be void. But I apprehend there is nothing unusual in an Act of Parliament stating a legal consequence in this way. Then the third branch of the clause, it is said, will be idle and insensible unless there be given to it the further effect of prohibiting the parties from recovering their deposits from the stakeholder upon the repudiation of the illegal contract.... But I think if the second branch of the clause be looked at, it is more consistent with the whole to treat the third as an exposition only of the first.... Although perhaps the third clause might have been omitted as well as the second, yet, the second being inserted, the third became necessary also. Looking, therefore, at the whole section, critically and grammatically, I am of opinion that it does not apply to an action like this, where a party seeks to recover his deposit from a stakeholder, upon a repudiation of the wager. Upon higher grounds also, I think that is the true construction of the Act. This cannot be considered as an action brought for recovering a sum of money alleged to be won upon a wager; nor do I think it is an action brought to recover a sum deposited in the hands of the defendant to abide the event of a wager. As soon as the defendant received notice from the plaintiff that he declined to abide by the wager, the money ceased to be money deposited in the hands of the former to abide the event, and became money of the plaintiff in his hands without any good reason for detaining it.”

In Martin v. Hewson,^[155] where money had been deposited to abide the event of a cock-fight, it was held that the words “no action shall be brought,” &c., did not apply where the original object of the deposit has been revoked by the depositor; and that (assuming cock-fighting to be illegal) 57either depositor could before the event, revoke the stakeholder’s authority and recover his stake.

Notice necessary to determine stakeholder’s authority.

In Gatty v. Field^[156] it was held that it was necessary to serve the stakeholder with a notice to determine his agency before bringing the action; this would seem to follow from the remarks of Maule, J., in Varney v. Hickman that the effect of the notice was to change the character of the deposit. So in Savage v. Madder,^[157] to which allusion has been made above on another point; to an action for money had and received the defendant pleaded (inter al.): “That the money was deposited in the hands of the defendant to abide the event on which the wager was made and is claimed by the plaintiff as the winner of the said wager, and the plaintiff did not repudiate the said wager or demand back his said money before the event of the said wager.” The Court were unanimously of opinion that this was a good plea; but from the form the plea assumed the case cannot be said to decide that one depositor can revoke the stakeholder’s authority; indeed an observation of Martin, B. (at p. 180), would seem to imply that section 18 prohibited all actions against the stakeholder at all. It only shows that, at any rate where the wager has not been repudiated, the money retains its character of money deposited to abide the event. The plea, moreover, seems framed upon the assumption that the revocation must take place before the event and not merely before the money is paid over, as was also suggested in Martin v. Hewson.

Relation of stakeholder to depositors.

The great difficulty in these cases seems to have arisen from the want of a proper understanding of the real relation in which a stakeholder stands to persons who deposit money in his hands. This question was much discussed in Hampden v. Walsh.^[158] Plaintiff and Wallace deposited £500 each with defendant, as stakeholder, on an agreement that if Wallace should by a certain date prove to the satisfaction of the defendant the truth of some scientific proposition, Wallace should receive the two sums deposited. Defendant decided in Wallace’s favor. Plaintiff objected to the decision, and 58before the money was paid over to Wallace demanded repayment of his deposit from defendant. In spite of this notice defendant paid the whole to Wallace. Cockburn, C. J., in delivering judgment, alludes to this particular point, which had evidently been dealt with in argument: “We cannot concur in what is said in ‘Chitty on Contracts,’ 8th edition, p. 574, that ‘a stakeholder is the agent of both parties, or rather their trustee.’ It may be true that he is the trustee of both parties in a certain sense, so that, if the event comes off and the authority to pay over the money by the depositor be not revoked, he may be bound to pay it over. But primarily he is the agent of the depositor, and can deal with the money deposited so long as his authority subsists. We should look upon the defendant merely as the agent of the plaintiff and as no longer justified in paying over the money when once his authority had been countermanded.” The Court held plaintiff entitled to recover, and the case seems to go one step further than previous cases on the statute in showing that the stakeholder’s authority may be countermanded after, as well as before, the event has came off, as in Hastelow v. Jackson.^[159]

The same view seems to have been taken of the matter by the Irish Courts.^[160]

These decisions afterwards were supported, first by the Court of Exchequer Chambers, and next by the Privy Council. In Diggle v. Higgs,^[161] plaintiff and A agreed to walk a match for £200 a side, that sum to be deposited by each with defendant. A was declared winner; but before the money was paid over plaintiff gave notice to defendant not to pay to A. Defendant disregarded the notice and plaintiff sued to recover his stakes. The Court were unanimous in upholding the authority of the previous decisions. Cockburn, C. J., however, who had in Hampden v. Walsh hinted a doubt as to the correctness of the authorities, here expressly intimates, that if the matter were res integra, he 59would have thought that the words of the statute precluded an action to recover even a deposit; but that he was unwilling to disturb the law as settled.

Bramwell, L. J., touching on the meaning of the words “no action shall be brought,” thinks that they are wholly superfluous and might have been left out. It will be remembered that Maule, J., in Varney v. Hickman, looked upon them as a statement of legal consequence, not strictly necessary, but intended by way of explanation of the results of the general enactment. It seems, however, not improbable that the words were inserted to prevent any question arising as to the right of the winner to recover from the stakeholder on a count for money received to his use—a point which would have presented more difficulty than an action by the winner against the loser, and which might have been made a means of evading the Act, by doing through the interposition of a stakeholder what could not be done directly. It being thought advisable to provide for the one case, the other more obvious provision would be inserted for the sake of completeness.

It will be unnecessary to refer to Trimble v. Hill,^[162] further than to say that the same point was decided in the same way.^[163]

It seems, therefore, to be clearly settled law, subject only to reversal by the House of Lords, that a stakeholder holds each stake as agent for the depositor and that a depositor can recall his stake at any time before it is paid over to the winner, whether before or after the event has been decided. |Qy. Where horse disqualified.| It was, however, held in two cases^[164] that where the owner entered a horse that was afterwards disqualified he could not recover his stakes on the ground that he would be playing a game of heads I win, tails you lose. But it is very doubtful whether these decisions would be supported at the present day considering the bias of the more recent cases.

60His authority may be determined in the same way as that of an ordinary agent—

Determination of stakeholder’s authority.

(1.) By express notice of revocation, as in all the cases quoted above.

(2.) Where the objects for which the deposit was made have, to the knowledge of the stakeholder, become impossible of performance. Thus in Carr v. Martinson^[165] where stakes had been deposited with defendant to abide the event of a horse-race between the plaintiff and one C, the race to be decided by a person named as judge, C on the day appointed did not appear and A’s horse walked over the course, and was decided by the judge to be the winner. Plaintiff demanded the whole of the stakes from the defendant, which defendant refused to pay except with the consent of C.

Held, that as soon as the race became impossible to the knowledge of the defendant, he held the stake eo instanti as money had and received to the use of the defendant, the defendant’s authority to pay the winner being thereby revoked; and that although plaintiff demanded the whole of the stakes as winner, yet that was a sufficient demand of his own stake, which defendant ought to have handed over. Per Lord Campbell, C. J., a demand was unnecessary in this case at all.

Death of principal.

(3.) Probably by the death of one of the depositors. That is the general rule in ordinary transactions between principal and agent, that the authority of the agent is revoked by the principal’s death. This point occurred, but was not taken in Manning v. Purcell.^[166] Testator had deposited with two stakeholders a sum of money to abide the result of bets made by himself. It appeared from the evidence that a bet is always “off” on the death of one of the parties. On testator’s death the stakeholders repaid the deposit to his administratrix. One question raised in the case was whether this deposit passed under a gift in the will of all testator’s “money.” The Court held that it did not, as although, according to Varney v. Hickman, testator had 61power to revoke the stakeholders’ authority, he had not in his lifetime exercised this right: therefore the deposit was in no sense his moneys, though since his death it had become part of his assets. The point was not taken that the principal’s death of itself revoked the stakeholders’ authority, though that result seems to have been arrived at by means of the custom among betting men. But, as Lord Justice Bruce seems to imply, that if testator had before his death given notice to the stakeholders to return the deposit, it might then have been considered his money, it is not easy to see why the same result should not follow from a revocation by operation of law.

It will be remembered that it has been suggested above (p. 36) that the deposit of stakes by the competitors in a race is the same thing legally as the deposit in respect of an ordinary bet. If it be true, therefore, that the death of a depositor revokes the authority of the stakeholder with respect to that particular stake, |Right of executors against stakeholders.| it would seem that where a competitor in a race happens to die between the time of paying his stake or forfeit and the time when the whole is paid to the winner strictly speaking and from a legal point of view the stakeholder should repay them to his representatives, seeing that by Rule 156 of the Rules of Racing stakes and forfeits are part of the fund payable to the winner. The same would apply to entrance money where, according to Rule 160, it is payable to the winner as part of the stakes. But, of course, entrance money would not be part of the stakes where, as is usual, it is paid into the race fund.

Bankruptcy.

(4.) As a general rule the authority of an agent (i.e., a bare authority not coupled with an interest) is revoked by the bankruptcy^[167] of the principal. Although there seems to be no express decision on the point, it seems probable that the same rule would apply in the case of a stakeholder where either of the depositors became bankrupt before the money was paid over to the winner. As the stakeholder is, according to Hampden v. Walsh,^[168] merely the agent for each 62depositor, the safest plan for him to adopt on receiving notice of a depositor’s bankruptcy would be to consider his authority as to that stake revoked, and repay it to the trustee in bankruptcy; or perhaps he would be safe in paying it to the bankrupt himself, if the trustee had not intervened to claim it.

Stakeholder cannot sue for stakes.

As the stakeholder is merely the agent for the depositors, he cannot maintain an action for the stakes. Thus, in Charlton v. Hill^[169] the Clerk of the Course of a race meeting, who was sued by the plaintiff for the stakes won by him in one race, attempted to set off against that claim a sum due from plaintiff in respect of the stakes of another race. Held, that he could not do so as no action could have been maintained by the defendant seeing that the plaintiff could at any time recover the stakes back again.

Competitors can choose their own stakeholder.

It is, moreover, competent to the competitors to choose their own stakeholder or to select a substitute for the one nominated by the rules of the race. Thus, in Dines v. Wolf^[170] by the rules of the race the stakes should have been paid to the Treasurer of the Australian Jockey Club, but plaintiff insisted on their being retained by the defendant. Held, therefore, that plaintiff could not make defendant liable as he had acquiesced in the change.

Liability of steward for default of stakeholder.

A question has occasionally been raised whether a steward who nominates a stakeholder can be made liable for the latter’s insolvency or default. It is difficult to see how he could be without express agreement, or perhaps unless he wilfully appointed a man unfit for the post.

Liability of stakeholder.

The stakeholder should be very careful before he pays the stakes to the winner to ascertain that the winner has been so declared by a competent authority, seeing that if he pays and it turns out that the judge, umpire, or stewards have not acted in accordance with his or their authority, he may be liable to the other subscribers. See Smith v. Sadler.^[171]

When responsible for stakes.

By Rule 28 of the Rules of Racing the clerk of the course, who is generally the stakeholder, is responsible for the stakes 63if he allows a horse to start in respect of which the stakes have not been paid. This seems to be a liability in the nature of a guarantee of a wager, seeing that the liability for stakes is simply the liability on a wager.

Guarantee of a wager.

There seems no reason why an action should not be maintained in a contract by one person to guarantee the due performance of a wager contract by another. Such a contract could not of itself be void as a wager seeing that the statutes as we have seen only apply to the parties to the wager itself. Probably, it would have to be in writing to satisfy the Statute of Frauds as being a promise to answer for the default of another, but this is by no means certain seeing that it is not a default in paying a legal demand. If the contract be held to be within the Statute of Frauds the stakeholder ought to be required to sign an acceptance of the post, subject to the Rules of Racing, so that he may be subject to the liability provided by Rule 28.

Forfeit or penalty not enforceable.

As no action will lie on a wager, so no action can be brought to enforce a penalty for non-performance of a wager. In Irwin v. Osborne^[172] the plaintiff and defendant agreed each to nominate a mare for a race, the party or parties nominating the winner to receive from the parties or party nominating the other mare the sum of £100; the party or parties who should make default in nominating a mare to pay a forfeit to the other side of £100. Defendants failed to cause their mare to run and plaintiff sued to recover £100 penalty.

Held, that it could not be recovered, as the agreement was a mere wager. “If the agreement be legal there is no obstacle to prevent the recovery of the penalty for non-performance, but if illegal the penalty can no more be recovered than damages for non-performance.”^[173]

It has been shewn above, p. 36, that no action will lie to recover stakes from any of the competitors in a horse race, a sweepstakes being on the same footing as any other game for money. This decision would therefore show that what 64are known as “forfeits” in racing, i.e., sums payable in withdrawing a horse from the race, frequently half the stake (see Rule of Racing 105) are equally irrecoverable.

Deposits on bets.

It may here be convenient to consider the rights of the parties with respect to money deposited by one party with the other on bets made between the two.

In Manning v. Purcell,^[174] persons who had made wagers with the testator had deposited with him the sums they had staked. Some of these bets were lost to the testator in his life time, and after his death his testatrix paid the winners both the amounts they had deposited and the amounts they had won. Some of the bets were undecided at the time of testator’s death, and in respect of these the executrix repaid the depositors the amount of their deposits.

It was proved that by the custom among betting men bets are off on the death of one of the parties. It was held that in respect of bets decided against testator in his life time, the executrix was not justified in paying either the sum won or the deposit; but that as to the bets which had not been decided, she was justified in repaying the deposits. Knight Bruce, L. J., put the case on the ground that the contract being illegal, the executrix was justified in determining the bets before they came off. It is difficult to justify the first part of this decision relating to the deposits on the bets which had been decided in testator’s life time. A makes a ready money bet with a book maker at 5 to 1, depositing the £1 with him. A’s horse wins; A of course cannot recover the £5, but why not the £1? The truth seems to be that the deposit is made as a security for what A might lose to B on the bet, an event which became impossible. The fallacy seems to be treating the betting contract as illegal; no doubt if A had lost the bet he could not have recovered the deposit (see, however, p. 66).

In Reggio v. Stevens,^[175] the plaintiff had deposited sums of money with the defendants in respect of stock exchange transactions which he intended to open at the defendant’s office. These transactions being for differences 65were held by the Court to be wagering contracts (see post on the Chapter on Stock Exchange). The plaintiff, as he was by the agreement entitled to do, gave notice to close the transactions, which showed a balance in his favour, at the same time demanding the winnings and repayment of his deposit.

It was contended under the authority of Manning v. Purcell, that inasmuch as the notice to close the transaction was in effect determined the wager, the deposit could be recovered. The Court held that inasmuch as the money had been deposited in respect, not of one, but of a series of transactions, the case came under the second part of Manning v. Purcell, and that the deposit could be recovered.

By sect. 5 of the Act of 1853: “Any money or valuable thing received by any such person as aforesaid, as a deposit on any bet, or as or for the consideration for any such assurance, undertaking, promise, or agreement as aforesaid, shall be deemed to have been received to or for the use of the person from whom the same was received, |Deposit with keeper of betting house.| and such money or valuable thing or the value thereof may be recovered accordingly with full costs of suit.” It is obvious that the section is hardly intelligible without reference to the other sections of the Act, which will be found set out in the Chapter on Betting Houses. In Doggett v. Catterns,^[176] the defendant was in the habit of standing by a tree in Hyde Park, making bets with other persons. The plaintiff deposited a sum of money with the defendant in respect of one of these bets, which sum plaintiff now sued to recover. The majority of the Court held that the “person aforesaid,” in section 5, alluded to the persons specified in section 4, i.e., the owner or occupier of the place, &c., or person acting on his behalf, or having the care or management of the business. That the section did not include any “person using the same,” and that as the defendant could not be said to be the owner or occupier of any place in Hyde Park, the section did not apply.

It will, however, be noticed that the section speaks of a deposit (1) on any bet, (2) as or for the consideration for any 66assurance as aforesaid. Now the assurance spoken of in the previous section refers only to an agreement to pay on the contingency of a horse-race or other sport. It would seem, therefore, that while the penal provisions of section 4 are confined to deposits on bets on horse-races, &c., |Does s. 5 apply to bets in stocks and shares?| the right of action given by section 5 to recover deposits on any bet applies to bets of every kind, and therefore to wagering transactions, &c., on stocks and shares. It is to transactions of the latter kind that this question would have a practical application. In the outside Stock Exchange places, commonly known as “bucket shops,” bargains for differences (which are really wagers) are well known. (See post, the Chapter on Stock Exchange).

Another point which would seem somewhat doubtful under the section is, supposing a deposit be made within the section, i.e., with the owner or occupier, &c., of the place kept for the unlawful purpose, and the bet is determined against the depositor, can he still recover this as a deposit on the bet, |After bet lost to depositor.| even though the money ceases to retain its character as a deposit, and has been appropriated to the payment of a lost bet? It would seem that he could. The Act was passed to discourage and penalize establishments of a specified kind. Besides, it would seem that even before the Act, according to Manning v. Purcell (ubi sup.) money deposited on a bet can in all cases be recovered before the event, so that for this purpose the Act was unnecessary.

At all events, before an action can be brought under this section at all, the following circumstances must combine: (1) Receipt of money on deposit (2) by the owner or occupier (or his agent or manager in the betting business) (3) of a place, etc., kept or used for the purposes mentioned in sections 1 and 3. As to this and “place” and “user,” see the Chapter on Betting Houses; but (4) it is at p. 190 pointed out that the receipt under section 4 need not be in the house or place.

Foreign law.

The insertion of the clause commencing with the words, “no action shall be brought,” may, perhaps, have a practical significance in one case, where an action is brought in 67England on a wager-contract made in a foreign country where such contracts are enforceable.

It will be sufficient for present purposes to state a few general rules which prevail in a case of what is called a conflict of laws:—

(1.) Where a contract contemplates any particular country as the place of performance, the contract is governed by the law of that country, the lex loci solutionis; e.g., the liability of the acceptor and indorser of a bill of exchange, drawn and accepted in France, but accepted payable in England, must be decided according to the law of England.^[177]

Robinson v. Bland^[178] is an example of a bill accepted for gaming debts contracted abroad. Plaintiff sued on an acceptance given in France, payable in England, for money lost at play in France. The acceptor died before action brought. It appeared that the debt could only have been enforced in France by the marshals in a court of honour and not in the ordinary courts, and the only process ultimately available was personal attachment, which in the present case would have been impossible as the debtor was dead. So as the debt could not have been enforced in France, no action would lie here. According to English law the bill was void by the Statute of Anne.

(2.) Where no special place of performance is named, the lex loci contractus prevails, that is, the law of the place where the contract is made; or in the case of an executed contract, where the transaction is carried out; e.g., money advanced in France for the purposes of gaming is a transaction governed by French law.^[179]

In Quarrier v. Coulston,^[180] a bill was filed by the personal representative of a deceased person to have an I O U given to defendant by deceased delivered up to be cancelled, on the ground that it was given in respect of money won from 68deceased at cards, or lent to him for gaming purposes, while travelling on the Continent at Baden-Baden and other places in Germany. Judgment was given for the defendants, on the ground that it did not appear that the games were unlawful by the laws of the country where the money was won.

(3.) The formalities necessary for a contract must be decided by the law of the place where the contract is made.

(4.) Questions of procedure are decided according to the law of the forum where the case is tried.

In Leroux v. Brown,^[181] it was decided the words in the 4th section of the Statute of Frauds, which provide that “no action shall be brought” upon certain contracts therein specified unless there be some memorandum of them in writing, refer to procedure only, and do not affect the substance of the contract; consequently, where an action was brought in England on a verbal contract entered into in France, where no writing was required, but which by the 4th section of the Statute of Frauds ought to have been in writing in England, it was held that as the Statute of Frauds referred to procedure only, the law of England must prevail where the action was brought, and that the rule above stated as to the formalities did not apply.

Qy. Effect words in 8 & 9 Vict., c. 109.

It may be, therefore, that the same words used in 8 & 9 Vict., c. 109, section 18, would have the same effect, viz., in preventing an action being brought in English Courts on a wager-contract entered into abroad in a country where they are legally enforceable.^[182] This, of course, would not apply to money lent for gaming purposes,^[183] which depends on 5 & 6 William IV. and not on 8 & 9 Vict., c. 109. (See ante p. 14.)

The “Proviso.”

III. We now come to the last part of the section, commonly called the “Proviso,” which says that “this enactment shall not be deemed to apply to any subscription or contribution, or agreement to subscribe or contribute for or towards any 69plate, prize, or sum of money to be awarded to the winner or winners of any lawful game, sport, pastime, or exercise.”

There are three series of questions on this proviso.

I. As to what is “a subscription or contribution to a prize”?

II. As to when a person is “the winner” within the statute?

III. What are lawful games, sports, &c.?

Subscription or contribution.

I. What is the meaning of a subscription or contribution to a prize?

In many of the cases the line is very fine between such subscription and a deposit of sweepstakes. In Batty v. Marriott,^[184] a foot-race was agreed upon between plaintiff and A for £10 a side, and each deposited £10 with the defendant as stakeholder. A was declared winner, but plaintiff disputed the decision and demanded back his stakes. The Court held that the provisions of 16 Car. II. and 9 Anne relating to the question, were repealed by 8 & 9 Vict., c. 109; and that although the contract was in the nature of a wager, still the Act laid down no rule with respect to the number of subscribers necessary to form “a subscription to a prize.” It made no difference between the case of two or fifty. They all intimated that their decision went farther than the Legislature intended to go—consequently, as a foot-race is a lawful game, and as one party who has paid money on a legal contract cannot recall it without the consent of the others, they held that the plaintiff could not recover his stake.

If this case were good law, it would follow that the real test to be applied is, whether or not the money were deposited before the event came off in the hands of a stakeholder.

But the decision was not regarded with much favour in the later case of Parsons v. Alexander.^[185] Plaintiff sued on an account stated for money which had been won at billiards. Defendant having, to start with, a few shillings in his pocket played the plaintiff for a certain sum and lost. They then played again for “double or quits,” and defendant was again unsuccessful. This was repeated until the defendant 70lost to the plaintiff about £65, for which he gave an I O U. The Court, while intimating doubts as to the correctness of Batty v. Marriott, distinguished the case before them on the ground that the parties had played entirely on credit, and had not, as in Batty v. Marriott, deposited the stakes before the event came off.

Per Erle, J.: “The distinction is between gaming and cases where a person either pays down a contribution to a stake, or holds himself forth as having contributed.” Per Crampton, J.: “This was an agreement, if you win, I pay you; if you lose, you pay me.”

This distinction suggested by the Court of cases where the money is actually deposited by the parties who play, and cases where it is not, seems also to have occurred to Maule, J., in Johnson v. Lansley:^[186] “The 18th section seems to treat the money which is in a man’s pocket at the time as the reasonable limit to which he may lawfully gamble.” So, too, under the older statutes of Charles II. and Anne, as interpreted by Applegarth v. Colley, there was no objection to gaming so long as the stakes were prepaid.

Some of the Court said that but for Batty v. Marriott, they would have thought the proviso was confined to subscriptions by outside parties to a prize, and not to deposits by the players themselves. In Brown v. Overbury,^[187] the plaintiff was a subscriber to a race. The stewards could not agree as to the winner. Plaintiff claimed that his horse had won, and brought an action against the stakeholder to recover the stakes, thereby submitting the decision of the race to the jury. At the trial it was contended that he was, at all events, entitled to recover his own contribution. It was not even argued that this case was within the “proviso” as a contribution to a prize. The Court held that as it had not been shown that it had become impossible to obtain the decision of the stewards, he could not call on the stakeholder to return his contribution.

In Irwin v. Osborne,^[188] plaintiff agreed with the defendants 71that a match should be run between a mare, the property of M, and a mare the property of the plaintiff; that the party who nominated the winner should receive from the party or parties nominating the other mare the sum of £100; and that if either party who nominated a mare should make default in causing such mare to run, he or they should pay the other party £100. The defendants made such default, and plaintiff sued for £100. The Court held that this was not within the proviso of the statute; there was “no subscription; no contribution; no deposit. This action has been brought, not for a contribution, but to recover a penalty.... For the amount is not made up by a contribution or money deposited, and the winner had to depend on his good fortune in nominating the successful horse.... The contract depended on an accidental circumstance, not on the running of a race.”

Per Crampton, J.: “If it be an ordinary wager it is unlawful; all betting is disallowed, but an exception is made on what I may call a particular species of wagering, namely, a number of persons making a fund, the whole of which is to become the property of the successful party.”

It is clear that in this case the test of prepayment of stakes was adopted by the Court, following Batty v. Marriott.