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 Sometimes a valid contract is attempted to be rescinded by a wager, e.g., if A is indebted to B in a certain sum, and they agree to toss for “double or quits.”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 The parties then tossed whether the contract should be rescinded for £50 or £75.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 with £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 vendor, 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.