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 out 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. Held 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.