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.
II. 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 implied 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 seem 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.