Actual transfer not affected.
It seems clear that the Act only avoids the contract for purchase and sale, it does not affect a transfer executed in pursuance of such contract. In Mortimer v. MacCallan[[279]] the action was brought for the price of government stocks, sold and actually transferred to defendant in pursuance of a contract void under s. 8 of Barnard’s Act, 7 Geo. II., c. 8, the plaintiff not having the stocks in his possession at the time of the contract. It was held that the action was maintainable, as it was based on the transfer and not on the contract: at p. 640 “it was not a contract to sell, but a sale; not a contract to transfer, but a transfer:” at page 643, “Although the original contract of sale should be illegal on the part of the seller, yet the transfer is a legal act for a legal purpose ... a promise to pay in consideration of a transfer actually made, is neither prohibited by the words nor within the intent of the statute.” As suggested above, this is probably the real explanation of Barclay v. Pearce, p. 120.
Indemnity for calls.
In Loring v. Davis[[280]] a question arose as to the right of the plaintiff, as vendor of bank shares, to indemnity against calls. It was found by Chitty, J., as a fact, that the defendant, while knowing of his right to repudiate the transaction under Leeman’s Act, authorised his brokers to complete it on settling day; that the brokers in accepting the transfers from the plaintiff’s brokers thereby made the defendant equitable owner of the shares, and therefore liable to indemnify the plaintiff.
REVIEW OF THE LAW RELATING TO WAGER-CONTRACTS.
The present seems a favourable opportunity for a short review of the state of our law on the subject of wagering.
There are several ways in which the matter may be treated by the Legislature. It may declare the practice illegal in the sense of punishable, and endeavour to stamp it out by the machinery of the criminal law. This was the course adopted by the Statute of Anne, which made it penal to win more than £10 at one time or sitting by betting or gaming. Again, Barnard’s Act made it a criminal act to gamble in the funds, or even to settle differences on transactions of that nature. This species of legislation seems open to objection. Such a law must be uncertain in operation, as the offence is difficult to prove; and what is, perhaps, worse, it is still more difficult to disprove, and so capable of being turned into an instrument of extortion or revenge. But there are alternatives of a less violent character. It is possible to make wagering transactions illegal, not in the sense of criminal, but as contrary to public policy; the result of which would be, as it has been endeavoured to explain in an earlier part of this work, not only that the contracts themselves would be unenforceable, but that they would vitiate, at any rate as between the parties to the wager, every instrument or security, whether under seal or not; they would taint every contract or transaction arising out of or connected with the original wager. Thus the turf commission agent would not be able to recover what he had paid on his principal’s behalf if he allowed himself to be employed in a transaction contrary to the policy or the law.
In the Statute of Anne, and in Barnard’s Act, another means was resorted to of restricting the practice, viz., they gave the person who had lost and paid over a certain sum, a right of action to recover it within a given period. This might be a more efficacious method of repression than any other, as it is difficult to see how bookmakers could conduct a successful business, if in addition to the chances of never being paid, they could not call the money they had in their pockets their own. But the wisdom of such a species of legislation seems very questionable; as being in favour of dishonest persons it eventually operates to the disadvantage of persons who are ready to discharge their debts of honour. Besides, it hits the practice of betting in its least objectionable point. The payment of a bet implies that a man has not “plunged” beyond his means, particularly where the contract cannot be enforced against him. The object of the law is to discourage excessive gaming on credit, whereby persons might incur liabilities which their means can never enable them to meet.
There is yet another alternative course, which is summed up in the attitude which our law, in its present condition, assumes towards betting. In technical language, it declares wager-contracts void without making them illegal; it regards them as things not to be encouraged, but not absolutely forbidden, maintaining a neutral position as between the parties without being positively hostile. It will probably have become evident from the foregoing pages that the English law on the subject is in a somewhat peculiar state. In the first place its condition is decidedly piecemeal. To know the law in full it is necessary to refer to four different statutes, the dates of which, from first to last, extend over a period of about two hundred years. The Statutes of Charles II. and Anne must be studied before the effect and meaning of the Statute of William IV. can be made intelligible. But the latter statute, at any rate in its present application, deals only with cheques and securities given for betting debts, and that, too, only where the bet is made on a horse race, or some other game or pastime. Such securities it declares to be given for an illegal consideration. The contracts themselves are the subject matter of another statute passed a few years afterwards, which by a broad and sweeping enactment, very little in the style of English statute law, makes all wagers, of any sort whatever, not illegal, but void and unenforceable. It seems an anomaly that while all bets of themselves are simply void, yet when once a cheque is given in discharge or payment thereof, we are compelled to distinguish between bets on games and bets not on games; the former, directly the cheque is signed, becomes illegal, while a similar transformation is not effected in the case of the latter. The law at any rate seems capable of greater uniformity in this respect.
Another peculiarity of the law lies in this—that while wagers themselves cannot be made the subject of an action, yet in many cases they can be practically enforced by the joint exercise of legal and non-legal sanctions. This is specially the case with regard to betting on the turf, a large quantity of which is carried on, not directly between principals, but through the medium of betting agents. The agent makes the bet in his own name, and, so far as the other party is concerned, is the principal. If the bet is lost, the agent is, of course, under no legal obligation to pay. But these turf agents are members of what may be called a profession, and the dealings between the members are regulated by the strictest etiquette, a breach of which might entail serious consequences. It is well known that where an agent makes a bet, it is he who, by the rules of the turf, is responsible for payment. Some of the consequences of default were dwelt upon in the case of Read v. Anderson; but suffice it to say that a defaulter is practically turned out of his profession. So that payment is enforced against the agent just as effectually as it could be made the ground of an action at law. He must, if he can, obtain indemnity from his principal.