When responsible for stakes.
By Rule 28 of the Rules of Racing the clerk of the course, who is generally the stakeholder, is responsible for the stakes if he allows a horse to start in respect of which the stakes have not been paid. This seems to be a liability in the nature of a guarantee of a wager, seeing that the liability for stakes is simply the liability on a wager.
Guarantee of a wager.
There seems no reason why an action should not be maintained in a contract by one person to guarantee the due performance of a wager contract by another. Such a contract could not of itself be void as a wager seeing that the statutes as we have seen only apply to the parties to the wager itself. Probably, it would have to be in writing to satisfy the Statute of Frauds as being a promise to answer for the default of another, but this is by no means certain seeing that it is not a default in paying a legal demand. If the contract be held to be within the Statute of Frauds the stakeholder ought to be required to sign an acceptance of the post, subject to the Rules of Racing, so that he may be subject to the liability provided by Rule 28.
Forfeit or penalty not enforceable.
As no action will lie on a wager, so no action can be brought to enforce a penalty for non-performance of a wager. In Irwin v. Osborne[[172]] the plaintiff and defendant agreed each to nominate a mare for a race, the party or parties nominating the winner to receive from the parties or party nominating the other mare the sum of £100; the party or parties who should make default in nominating a mare to pay a forfeit to the other side of £100. Defendants failed to cause their mare to run and plaintiff sued to recover £100 penalty.
Held, that it could not be recovered, as the agreement was a mere wager. “If the agreement be legal there is no obstacle to prevent the recovery of the penalty for non-performance, but if illegal the penalty can no more be recovered than damages for non-performance.”[[173]]
It has been shewn above, p. 36, that no action will lie to recover stakes from any of the competitors in a horse race, a sweepstakes being on the same footing as any other game for money. This decision would therefore show that what are known as “forfeits” in racing, i.e., sums payable in withdrawing a horse from the race, frequently half the stake (see Rule of Racing 105) are equally irrecoverable.
Deposits on bets.
It may here be convenient to consider the rights of the parties with respect to money deposited by one party with the other on bets made between the two.