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 implied 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 of 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 else 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.