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 winner 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) either 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 before 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 would 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.