Chapter VIII: Section 5: inflicts penalties on any person winning any sum of money by

any fraud, and on any person who should win over £10 from any person or persons at one time or sitting.

It will be observed that this statute carried the restrictions on private betting and gaming considerably further than the Statute of Charles II. It prescribed additional penalties for fraud; it made a great reduction in the test of excessive gaming by substituting £10 for £100 as the maximum sum which a person might lose.[17] Further than this, it made it penal to exceed the limit thus laid down, instead of merely making the money irrecoverable. It has been held that the offence under the statute was complete by the mere fact of winning the moneys whether it were paid over or not.[18]

[Sidenote: Betting at games alone within statute.]

It should be observed that the statute does not deal with wagering generally, but only with gambling and betting at games, sports, or pastimes. In _Applegarth_ v. _Colley_[19] it was decided that the games and pastimes aimed at by both statutes are the same.

Both these points have an important bearing on the law as it exists at the present day, as will be seen when we come to discuss the provisions of 5 & 6 William IV. Before dealing with the latter statute, it will be important to notice a few points which were decided on the effect of the two earlier statutes, otherwise the provisions of the Statute of William IV. will not be intelligible.

[Sidenote: Games within the statute.]

(1.) As to the games dealt with, the Statutes of Charles II. and of Anne are very general, speaking of “any games whatsoever.” At the same time certain games have in particular been expressly decided to be within the Acts.

[Sidenote: Horse-racing.]

Thus _horse-racing_ is specifically mentioned in the Act of Charles II., but not in that of Anne. However, in _Blaxton_ v. _Pye_[20] and in _Applegarth_ v. _Colley_,[21] this species of pastime was decided to be within the Statute of Anne, the “games” mentioned in which statute were the same as those mentioned in the Statute of Charles II. This subject will be treated more fully when we come to the Statute 8 & 9 Vict., c. 109. For a long time horse-racing was illegal, except under certain conditions[22], but was early in this reign legalised generally by 3 & 4 Vict., c. 35. But although the racing itself was made legal, that did not affect the provisions of the statute against wagering.

[Sidenote: Wagers not legalised by 3 & 4 Vict., c. 35.]

Thus in _Bentinck_ v. _Connop_[23] a race was to be run for stakes of £50 for each colt, to which the plaintiff and defendant were subscribers, the defendant subscribing for three colts. The plaintiff won the race, but the defendant disputing the result refused to pay his stakes. Plaintiff sued him to recover the amount he should have paid by the agreement. It was admitted that the race itself was not illegal as it did not infringe the Statute of George II., but _held_ that the fact of the race being legal did not make the contract enforceable—that the contract was within the Statute of Charles II., a contract to pay a sum of money exceeding £100 lost at horse-racing, and not paid down at the time; but that it would have been recoverable (? from the stakeholder) if the money had been deposited before the race. To the same effect was the decision in _Shillito_ v. _Theed_,[24] that the Statute of George II. had not repealed the provisions of the earlier statutes as to wagering.

_Dog matches_[25] mentioned in the Statute of Charles II. include coursing matches as well as dog fights.

_Cricket_[26] is a game within the statute, so that a match for £20 was illegal, even though not finished in one day. A bond given to secure payment of a bet on a cricket match was void.

_Foot-races_,[27] even though against time. Of course whereever any game is declared illegal of itself no sum of money could be recovered as being won thereat. Thus in _MacKinnell_ v. _Robinson_[28] it was held that money lent for the purpose of playing at hazard (which game, together with ace of hearts, pharaoh, and basset, were declared illegal by 12 Geo. II., c. 28) could not be recovered back, and that the statute applied to gaming at private as well as public tables.

_Cock-fighting_[29] seems to be illegal at Common Law, but no doubt it is a game within the statute which speaks of games generally.

[Sidenote: Statute only applies to bet before or at time of race, &c.]

It should be noted that the statute only speaks of betting on the sides of them that “do and shall” play.

In _Pugh_ v. _Jenkins_[30] it was held that these words did not apply to a wager between parties as to the accuracy of their information as to the results after the race was over.

The statute also left unaffected any wager in a game for a sum not over £10 and paid down at once, _e.g._, by deposit with a stakeholder.[31]

(2.) Another question which arose on these statutes was whether they avoided the contract itself or only the security. In _Robinson_ v. _Bland_[32] Lord MANSFIELD distinctly lays it down that the contract might be good but the security void, and in the same case it is pointed out that whereas the Statute of Charles II. expressly avoids the contract, that of Anne deals only with the security, and that probably all reference to the contract in the latter statute was designedly omitted. In _Macalister_ v. _Haden_[33] it was held that an action would lie on a wager for a sum under £10 on a race for over £50, races for under that sum being at that time illegal by the Statutes of George II. In _Barjean_ v. _Walmsley_[34] money lent for betting purposes was held to be recoverable, as the statute applied to the security only, and not to the contract. However, the Court of Exchequer in the case of _Applegarth_ v. _Colley_[35] seem to have inclined to a different view as to the effect of the statutes. It was argued by counsel in this case that the Statute of Anne had avoided the security only, and not the contract, but Baron ROLFE in delivering the judgment of the Court said that the Legislature had by the provisions of the Statute 5 & 6 William IV., c. 41, to which fuller reference will be made hereafter, virtually decided the question. “It is impossible,” he says, “to impute to the Legislature an intention so absurd as that the consideration should be good and capable of being enforced until some security is given for the amount, and then by the giving of the security the consideration should become bad.[36]

(3.) The Statute of Anne in making securities “void to all intents and purposes” worked great injustice in the case of innocent holders for value of bills and notes which had originally been given for gaming transactions. Thus, in _Shillito_ v. _Theed_[37] the defendant had accepted a bill of exchange for £185, drawn on him for the payment of a wager on a legal horse-race. It was argued that as the plaintiff was a _bonâ fide_ indorsee of the bill for value, it was not avoided in his hands. TINDAL, C. J., held that as the statute avoided the security to all intents and purposes, not even a _bonâ fide_ indorsee for value could sue. It would seem, however, that the statutes did not prevent an indorsee of a bill or note originally accepted or made in payment of a betting debt from suing the indorser on his indorsement, if such indorsement were in consideration of a valid debt. [Sidenote: _Bower_ v. _Brampton_.] Thus in _Bower_ v. _Brampton_[38] the plaintiff sued as indorsee of promissory notes given by defendant to one Church for money knowingly advanced to defendant to game with at dice, and Church indorsed them to the plaintiff for value without notice—_Held_ that he could not sue the defendant as maker of the notes, as that would be a means of evading the Act; but that he could sue Church on his indorsement. [Sidenote: _Edwards_ v. _Dick_.] Again, in _Edwards_ v. _Dick_[39] the plaintiff sued as indorsee of a bill of exchange drawn by the defendant on the acceptor in payment of a betting debt, but indorsed by the defendant to the plaintiff in payment of a valid debt. _Held_, that although no action would lie against the acceptor either by the drawer, or any one else claiming through him, still the defendant could not set up as against the plaintiff the gaming consideration as between himself and the acceptor.

_PART II._

[Sidenote: 5 & 6 Wm. IV., c. 41. Section 1.—Securities]

Such was the state of the law when the Statute 5 & 6, William IV., c. 41 was passed, which in effect provides by section 1 that so much of the Statutes of Charles II. and [Sidenote: deemed to be given for illegal consideration.] Anne which declared that any note, bill, or mortgage should be absolutely void should be repealed, but that any note, bill, or mortgage which were declared void by such statutes should be deemed to have been made, drawn, accepted, given, or executed for an illegal consideration.

[Sidenote: Section 2.—Acceptor can recover from drawer.]

By section 2 it is enacted that if the person who gives such note, bill, or mortgage should actually pay to the holder of such security the money secured thereby, such payment shall be taken to have been made for and on account of the person to whom the security was originally given.

It should be noticed that the only alteration in the law made by this statute is that instead of avoiding the securities, given for gaming debts altogether, it declares that the consideration for which they are given shall be illegal, or in other words, it puts such securities on the same footing as those which are given for an illegal consideration.

We have to consider—

I. What transactions are within the statute.

II. The legal result of a cheque, bill, &c., being given for an illegal consideration.

III. The remedy of a person who has given such an instrument.

I. Transactions within the statute.

[Sidenote: Transactions within statute.]

(1.) The statute only applies to bets on games, which term, as has been explained under the Statute of Anne, includes horse races. It must be remembered that the decisions under the latter statute apply to the present statute, except so far as the present statute has expressly altered the provisions of the earlier statute.

[Sidenote: Bets after race not within statute.]

(2.) It was decided in _Pugh_ v. _Jenkins_[40] that the statute of Anne only applied to bets either before or during the game or race, the words being “do and shall play.” It often happens that, immediately after the horses have passed the post, people bet on the correctness of their judgment as to whether a horse has won or got a place. It would seem, therefore, that a note or cheque given in payment of such a bet would not be given for an illegal consideration, though, of course, as in _Fitch_ v. _Jones_[41], the consideration would be void. The difference between the two will be explained hereafter.

[Sidenote: Statute did not apply to stakes under £10 deposited.]

(3.) The Statute of Anne did not apply where the stakes for under £10 were deposited before the race by the competitors. This point was settled in the well-known case of [Sidenote: _Applegarth_ v. _Colley_.] _Applegarth_ v. _Colley_[42], to which some allusion has already been made, but which is specially important, not only as an authority on the construction of the earlier Statutes of Charles II. and Anne, but also showing the extent to which those statutes were incorporated into 5 & 6 William IV., c. 41. The plaintiff was a subscriber to a horse-race for which the stakes were £2 with £15 added; the whole sum subscribed amounted to less than £50. The plaintiff won the race and sued the defendant with whom the money had been deposited to recover the stakes. The defendant pleaded the above facts as a defence, and the plaintiff demurred. The first point raised by the plea was, that as the race was for under £50 it was illegal under the Statutes of George II.’s reign; but as all horse-racing had been held to be legalised by 3 & 4 Vict., c. 5, this plea could not be supported. But it was also argued that the plea disclosed a good defence, on the ground that it was a suit to recover a sum of money over £10 won by horse-racing, and so could not be maintained by virtue of the Statutes of Charles II. and Anne. Against this it was argued that the Statute of Anne only avoided the security given to repay a debt, and not the contract itself. The judgment of the Court, which was delivered by Baron ROLFE, established the following propositions:—

(_a._) That however the law may have stood under the earlier statutes with respect to the avoidance of the contract, the Legislature had virtually decided the question by passing the Statute 5 & 6 William IV., c. 41, it being “impossible to impute to the Legislature an intention so absurd as that the consideration should be good and capable of being enforced until some security is given for the amount, and that then the consideration should become bad.” That, therefore, since the passing of this statute, all _contracts for the payment of money_ won at play must be taken to be avoided.

(_b._) That in the present case the stakes having been deposited with a stakeholder before the race, there was no contract for the payment of money lost at play, within the meaning of the Statute of Anne: that statute must be read in conjunction with that of Charles II., and was intended to prevent gaming on credit, and not to interfere with playing for ready money.

(_c._) That plaintiff was not precluded from recovering by sections 2 and 5 (according to which the loser of £10 or upwards at any one time or sitting may recover it back, and the winner at any one time or sitting of over £10 is subject to heavy penalties) on the ground that by a fair construction of the statutes, the penalties inflicted on “the winner,” &c., only applied where there was a corresponding “loser” of over £10, and in this case the loss of each person was £2 only. It was, however, the Court added, unnecessary to decide that point, as the plaintiff was at any rate entitled to recover the £15, which had been subscribed by a stranger by way of prize to the winner; and the defendant’s plea was bad as having covered too much.

It will be seen that the decision leaves untouched the question as to the right to recover where the stakes amount to £10 each; but it would seem that this question could now only be of importance where a bill or note had been given to the winner for the amount, and the winner sues on that instrument; otherwise any such case would now fall under the Statute 8 & 9 Vict. c. 109 (as to which _see post_).

[Sidenote: _Thorpe_ v. _Coleman_.]

In _Thorpe_ v. _Coleman_[43] an action was brought to recover £10, a wager on the Derby. It was sought, in argument for the plaintiff, to upset the decision in _Applegarth_ v. _Colley_ that the statute applied to the contract as well as to the security. TINDAL, C. J., in giving judgment, said that as to the sums of £10 or upwards the contract was clearly not enforceable, seeing that section 2 of the Act of Anne enabled the loser, who had paid the sum of £10, right to recover it by action. He expressly reserved the question, as to whether the statutes affected bets under £10, that is whether the contracts themselves were void as well as the securities given for payment. But to enable a person to recover what could immediately be recovered back from him would only encourage circuity of action.

It seems, therefore, that the statutes did not apply, provided (1) that the stakes were deposited before the event came off, (2) and that they were not more than £10 each. This view of the matter was adopted in _Emery_ v. _Richards_,[44] which was an action to recover a stake of 10s. from a stakeholder deposited to abide the event of a wager upon a foot-race. It was held that neither party could revoke the stakeholder’s authority, as it was a valid wager. “It was not gaming on ticket, because here the money was parted with, nor is it excessive gaming within the Act,” it being for a sum under £10.

It must not be forgotten that under the present state of the law (as will appear hereafter) any wager would be void as an agreement, and the stake could be recovered from the stakeholder by the depositor. But the point of importance under the Statute 5 & 6 William IV., c. 41, is whether a wager when forming the consideration for a bill of exchange would be an illegal consideration and so a defective title.

[Sidenote: Cheque for gaming debts incurred abroad.]

It does not appear to have been decided how far a cheque or promissory note given for a gaming debt incurred abroad can be sued upon in this country, provided they be not void or illegal in the country where they are incurred. It would seem clear that any such cheque would not be given for an illegal consideration within the Statute of William IV. The Statute of Anne, on which that statute is founded, containing as it does penal provisions, could only have reference to gaming in this country. The case of _Quarrier_ v. _Coulston_[45] seems at first sight an authority for the suggestion that an action on such a cheque could be maintained. In that case, however, the greater part of the sum for which the I O U was given was for money lent for gaming at the public Baden gaming tables, the presumption being that such gaming was legal: while the small balance was made up of money won at cards in sums of less than £10 at each sitting; so that the transaction would not have been illegal under the Statute of Anne. On principle it would seem that the _lex loci contractus_ would govern the matter, _i.e._, the place where the gaming debt was incurred. But later on in this work, p. 68, it is suggested that the words of section 18 of 8 & 9 Vict., c. 109, “no action shall be brought,” etc., introduce the _lex fori_. If an action on a wager made abroad cannot be maintained it is difficult to see how an action could be brought on a cheque given in respect of such wager.

[Sidenote: Loans for gaming purposes.]

(5.) The Statute of Anne avoided all securities for money knowingly lent for gaming or betting or advanced at the time and place of such gaming to any person so gaming or betting, or that should during such gaming or betting so play or bet. The following propositions would seem to explain the law as to money lent for gaming purposes.

(_a._) As already explained the statute avoids the contract as well as
the security.

(_b._) It only applies to money lent for gaming or betting on games
and horse races.

(_c._) Therefore money lent to a person knowing that he is going to
apply it in such ways cannot be recovered; this seems to be recognised
in _ex parte Pyke_.[46] The statute makes it illegal.

(_d._) The words of the statute seem to establish an irrebuttable
presumption that money advanced during play (including, of course,
during a race meeting) to any one who at the same sitting or meeting
(the words “during such play” seem to point to this) should take part
in such games or betting was knowingly advanced for that purpose.

(_e._) The statute does not apply to money advanced to pay debts
already incurred.

[Sidenote: Money lent for paying a gaming debt.]

In _ex parte Pyke_[47] a question arose as to the right to recover money lent to enable the borrower to pay off a gaming debt. A employed B as his agent to back horses for him, which horses lost. B at A’s request paid the bets in the settlement at Tattersall’s, taking A’s promissory notes for the amount. A became bankrupt and B claimed to prove in the bankruptcy, not upon the notes, but for the money thus advanced. The registrar allowed the proof, and the trustees appealed. The Statutes of Anne and William IV. apply not only to money won by gaming, but to securities given to repay “any money knowingly lent or advanced for such gaming or betting as aforesaid, or lent or advanced at the time and place of such play, to any person or persons so gaming or betting as aforesaid.” It was argued for the trustee that this was a debt for an illegal consideration within the above quoted words, as according to _Applegarth_ v. _Colley_ the statute applied to the contract, and not only to the security, also that on the authority of _Higginson_ v. _Simpson_ the whole transaction was in the nature of a wager. The Court held that as the money had been advanced after the bets had been made, it could be recovered: but that it would have been different had it been lent with a view to gaming.

(_f._) The statute does not apply to money lent for gaming abroad[48].

(_g._) Of course money advanced to enable a person to play any
unlawful game as hazard, as in _McKinnell_ v. _Robinson_[49] or for
unlawful gaming within 17 & 18 Vict., c. 38, s. 4, cannot be
recovered[50].

[Sidenote: Test of illegality.]

It is sometimes difficult to determine whether a transaction, to some extent mixed up with an illegal transaction, is so inseparable from it as to be within the statute.

[Sidenote: _Simpson_ v. _Bloss_.]

In _Simpson_ v. _Bloss_[51] it was laid down that the real test whether a demand connected with an illegal transaction is capable of being enforced at law, was, whether plaintiff requires any aid from the illegal transaction to establish his case. The plaintiff laid an illegal wager with B in which the defendant assumed a part. The plaintiff won. Plaintiff, expecting that B would pay by a certain time, advanced to defendant his share of the winnings to which he was entitled by his agreement by plaintiff. B became insolvent and never paid the bet.

_Held_ that as plaintiff could not establish his case without the aid of the illegal wager, he could not recover.

[Sidenote: Liability of partners in illegal firm to account.]

In _Sharp_ v. _Taylor_[52] the Court drew a distinction between enforcing an illegal contract, and enforcing a subsidiary contract arising therefrom. They held that although a partnership might have been formed to carry out an illegal object which the Court would not aid in effecting, yet one partner who has received moneys which have been realised in the illegal business, cannot set up the illegality in answer to a claim by his co-partner for an account.

But this case was subject to some unfavourable criticism by the late Master of the Rolls in the case of _Sykes_ v. _Beadon_.[53] This was a case of a society not registered under the Companies Act, which the Master of the Rolls held was illegal as infringing that Act, though his decision on that point was overruled by the Court of Appeal in _Smith_ v. _Anderson_.[54]

His lordship also was of opinion that it was illegal as infringing the Lottery Acts. The object of the suit was to have the trusts of the society administered by the Court. But his lordship held that as the society was illegal, it was impossible that its objects could be carried out by the Court. Even supposing a suit were framed for the object of putting an end to the society and dividing the assets, he thought it very doubtful whether the reasoning in _Sharp_ v. _Taylor_ was correct, that because an illegal transaction is closed, that therefore a Court of Equity is to interfere in dividing the proceeds of the illegal transaction.

In the case of _Beeston_ v. _Beeston_.[55] Plaintiff had paid money to defendant to bet with on their joint account, plaintiff to receive a share of the winnings. Defendant won, and gave plaintiff a cheque in payment of his share. The cheque was dishonoured, and plaintiff sued defendant on it. It was urged for the defendant that it was a contract by way of gaming, and that the cheque was given to secure the moneys won thereby, and was therefore a void security, both under 8 & 9 Vict., c. 109, and 5 & 6 William IV., c. 41. The Court held that the plea was bad and the plaintiff was entitled to recover on the ground that the consideration for the cheque was entirely distinct from the wagering. _Sharp_ v. _Taylor_ was cited with approval as showing that one partner cannot set up the illegality of a transaction against a co-partner and thereby retain the whole of the profits arising from that transaction.

It was remarked by POLLOCK, B., that the two statutes quoted only applied to contracts and securities as between the parties to the wager.

This case will be referred to again when we come to deal with the rights of principal and agent;[56] and in the Chapter on Gaming Houses the question of illegal partnership is fully discussed (p. 162).

II. The consequences of an instrument being given for an illegal consideration.

[Sidenote: Law as to illegal consideration.]

[Sidenote: Bills and notes.]

The general rule is that if A accepts a bill drawn upon him by B, or gives him a promissory note, for an illegal consideration, the instrument no doubt is entirely void as between A and B, so that the latter cannot sue the former upon it; still if B transfers the instrument by endorsement or otherwise to C, who takes without notice that it was originally given for an illegal consideration, and gives value for it, C may sue all the prior parties and recover upon it. The chief difference that such illegality makes to C is, that a presumption is raised that C is the agent for the original holder, _i.e._, that the indorsement to him is presumed to be merely a means of evading the law and enforcing the originally illegal contract.[57] [Sidenote: Burden of proof is on transferee.] Consequently the rule is that the burden of proof lies on the transferee of showing that he took the instrument _bonâ fide_, _i.e._, without notice of the illegality, and that he gave value for it. Moreover, the illegality would affect the interests of a transferee if at the time of the transfer the bill were overdue. Before the late Bill of Exchange Act, it was commonly said that an indorsee of an [Sidenote: Overdue bill.] overdue bill took it subject to all the equities attaching to the bill. Thus, if a bill were obtained from the acceptor by fraud or undue influence, or given for an illegal consideration, those were equities between the original parties which would prevent the instruments being enforced as between them; but would not affect a _bonâ fide_ transferee for value. The fact, however, of a bill being overdue would be sufficient notice of the infirmity to prevent his being a _bonâ fide_ holder. [Sidenote: 45 & 46 Vict., c. 61.] The new Bill of Exchange Act[58] leaves the law practically unchanged, excepting in phraseology. [Sidenote: “Holder in due course.”] For “_bonâ fide_ holder” is substituted the expression “holder in due course.”

By section 29, the holder in due course is defined to be (1) a person who takes a bill not overdue and without notice of dishonour, if any; (2) and takes it in good faith and for value, and at the time the bill was negotiated to him he had no notice of any defect of title of the person who negotiated it.

The expression “defect of title,” which occurs in this section, is substituted for the older and more cumbrous one of “equity attaching,” &c. By section 29, the title of a person who negotiates the bill is “defective” when he obtains the bill or acceptance thereof by fraud duress (“force or fear” in Scotland), or other unlawful means, or for an illegal consideration (which includes a gaming debt).

[Sidenote: Defect of title shifts burden of proof.]

By section 30, the holder is presumed to be a holder in due course until the contrary is proved; but in that event the burden of proving that value has been given for the bill and in good faith, is shifted on to the holder. See _Tatham_ v. _Hasler_.[59]

[Sidenote: Overdue bill.]

By section 36, an overdue bill is negotiated subject to all defects of title affecting it.

The result of these enactments, stated in the language of the law at the present day, seems to be shortly as follows:—

(1.) A bill or note accepted or made for a gaming debt (such as is
dealt with by the Statute of Anne) is subject to a defect in title.

(2.) If such instrument be overdue, any transfer is made subject to
such defect.

(3.) The holder must in all cases, to entitle himself to sue when once
the illegality has been proved, show that he took the bill or note
_bonâ fide_ and for value.

[Sidenote: Absence of consideration not a defect.]

As will be seen by reference to any work on Bills of Exchange, mere absence of consideration does not constitute a defect of title: consequently the indorsee for value of an overdue accommodation bill can recover on the bill from the acceptor.

[Sidenote: Nor is a void consideration.]

In _Fitch_ v. _Jones_[60] the question was raised as to whether a consideration not illegal but merely void by Act of Parliament constituted an “equity.” It was an action on a promissory note by the indorsee against the maker. Defendant pleaded that the note was given by him to one C in payment of a debt on the amount of hop duty in 1854, the bet being made since the passing of 8 & 9 Vict., c. 109. It was not an illegal consideration within 5 & 6 William IV., as the bet was not on a game or pastime. A question was raised at the trial as to whether the plaintiff had given value for the note when endorsed to him. The judge directed the jury that the onus was on the defendant of proving that no value was given. On this ruling the substantial question in the case was raised before the Court, viz., whether the voidness of the consideration had the same effect as illegality, in throwing the burden on to the indorsee (_i.e._, the plaintiff) of showing that he took the note for value and without notice. The Court held that the consideration was merely void by 8 & 9 Vict., c. 109, and not illegal; and that this had not the effect of raising the presumption that the plaintiff took the note without value.

In _Lilley_ v. _Rankin_[61] the same ruling was applied to cheques given in payment in respect of gambling transactions in stocks.

Questions have sometimes arisen upon what amounts to notice of the illegality, which, as has been seen, a holder of a bill is sometimes called upon to disprove. On this subject reference should be made to works on Bills of Exchange. It seems that there need be no express or precise notice, but that any circumstance of suspicion which ought to have put the holder upon enquiry is sufficient. [Sidenote: What notice is sufficient.] Thus, in _Soulby_ v. _Portarlington_,[62] defendant was acceptor of a bill for £1,000, payable to one Aldridge, who was keeper of a gaming house, for money lost at play. It was endorsed to one Brooke, who discounted it with Soulby & Co., wine merchants, the plaintiffs in the action, with whom Brooke, a retail wine dealer, had dealings. The plaintiffs advanced £700 on the bill, agreeing to deliver £300 in wine. Soulby commenced an action in Ireland on the note. The defendant instituted a suit in the Court of Chancery in England to restrain the plaintiffs from proceeding with the action, on the ground that it was given for a gambling debt. _Held_ that the facts were such as to put the plaintiffs on enquiry as to what the origin of the bill was, especially as it was not denied by the plaintiffs in their affidavits that they knew that Aldridge was the keeper of a gambling house. That the Court had clearly jurisdiction to restrain the plaintiffs (who were resident in England) from proceeding with their action in Ireland, and also to order the bill to be delivered up to be cancelled.

[Sidenote: _Hawker_ v. _Hallewell_, 3 Findley. 3 Sm. & G.]

The case of _Hawker_ v. _Hallewell_[63] is a good illustration of cases where the transferee will not be held to have taken with notice, and also of cases where the transferor by his conduct estops himself from alleging the illegality of the original consideration. [Sidenote: Assignee of bond.] In _Hawker_ v. _Hallewell_[63] the plaintiff gave a bond in 1841 to one Jenkins to secure repayment of a betting debt; at least, this was assumed for the purposes of argument, though the evidence did pot prove it. Jenkins assigned the bond and a policy of assurance to a bank. Plaintiff, in June, 1848, made a proposal to the bank that the bond and policy should be given up, and that the existing debt, together with a further advance, should be secured by mortgage on some reversionary property of the plaintiff. The plaintiff alleged that he had given notice to the bank that the bond was given for a gaming debt. The plaintiff, in 1853, assigned all his property to trustees for the benefit of his creditors, and now filed a bill to administer the trusts. The Chief Clerk disallowed the claim of the bank. The plaintiff contended that the bond was void under 9 Anne, c. 14, which had not been repealed by 5 & 6 William IV., so far as regards bonds. 8 & 9 Vict., c. 109, which repealed so much of the Statute of Anne as was not repealed by 5 & 6 William IV., was not retrospective. The Vice-Chancellor decided on the facts that the bank had taken the bond without notice of the original consideration. He also held that, although the operative part of the Statute of William IV. only applied to negotiable securities, yet the recitals included bonds and securities of every kind; so that an obligee was within the equity of the statute, and that, on the principle of Equity follows the Law, a _bonâ fide_ assignee of a bond for valuable consideration would be treated in the same way as a _bonâ fide_ holder of a bill of exchange. But there was a further ground on which his honour decided in favour of the [Sidenote: Estoppel of obligor.] bank—that the plaintiff by his proposal in 1848 had held out to the bank that the bond was a valid security and that on the principle of _Pickard_ v. _Seears_[64] he could not be heard to set up its invalidity. This latter point seems to be the same as that on which _Edwards_ v. _Dick_[65] was decided, viz., the ordinary principle of estoppel—that if one person by his acts or representations induces another person to believe in the existence of a certain state of facts, and acting on such belief to enter into a contract with him, he cannot be heard to say that those facts do not exist.

[Sidenote: Pleading illegality.]

Of course, the burden of proving the illegality of the consideration lies on the person who sets it up, on the principle that he who alleges the affirmative must prove it. This was clearly recognised by the Court in _Fitch_ v. _Jones_.[66] By the Rules of Court, 1883, facts showing illegality either by Statute or Common Law must be specially pleaded. It seems, too, at any rate under the old system of pleading, that it was not sufficient for defendant to plead a fact showing illegality, but he must also aver that plaintiff gave no value for the bill, although the illegality once established would raise a presumption to that effect.[67]

[Sidenote: Admission in pleadings enough to shift burden of proof.]

It seems that in order to throw the burden of proof on to the shoulders of an indorsee, it was not sufficient that the illegality should be admitted on the pleadings; it must be proved in evidence. Thus in _Edmunds_ v. _Grove_[68] in an action by the indorsee against the maker of a note. _Plea_, that the note was made for a gaming debt, and indorsed to plaintiff without consideration and with notice. To this plaintiff replied denying the notice and absence of consideration without denying the illegality. _Held_, that although the pleadings by not putting in issue the illegality admitted it, still that had not the effect of throwing the burden of proof on to the plaintiff that he took without notice and for good consideration. Presumptions or inferences of fact could only be drawn by the jury from facts proved before them. The issues only, and not the pleadings, were before the jury. But now by the Bill of Exchange Act, s. 30 (2) it is sufficient that the illegality should be _admitted_ or _proved_.

[Sidenote: The exact nature of the consideration should be stated.]

It is always advisable, particularly where a plea of illegality is set up, to state fully the circumstances under which the contract or security is affected with illegality. Thus in _Bolton_ v. _Coghlan_[69] plaintiff sued as indorsee of a note made by defendant. The latter pleaded that it was made for money lost at play.

The evidence showed that defendant lost money at play to one Aldridge, and accepted a bill for the amount drawn by Aldridge. Aldridge indorsed to Knight. It was then agreed between defendant and Aldridge that defendant should in substitution for the bill give Knight his note of hand for the amount Knight indorsed to plaintiff.

_Held_ that as the plea implied that the note was originally given for a gaming debt, whereas it was really only a substituted agreement, the defendant should not be allowed to take plaintiff by surprise and go into evidence of the subsequent agreement.

But under the Rules of Court the judge at the trial has power to allow amendments in the pleadings upon terms as to costs or otherwise.[70]

[Sidenote: Action against indorser.]

The statute only affects the liability of the acceptor of a bill or maker of a note given for a gaming debt. It does not prevent the indorsee suing the indorser where the indorsement was, as between them, for a legal consideration: the statute leaves the law, as settled in _Edwards_ v. _Dick_,[71] untouched.

[Sidenote: Deeds for illegal consideration.]

(2.) Another consequence of the consideration being declared illegal is, that although the absence of consideration does not affect a deed, an illegal consideration avoids it. It seems, too, from _Hawker_ v. _Hallewell_,[72] that a bond is within the equity of the Statute of William IV. For the general authorities on the subject of Bonds and Deeds given for an illegal consideration, the reader should refer to Smith’s Leading cases under _Collins_ v. _Blantern_.

[Sidenote: Contracts divisible and indivisible.]

(3.) Again, if part of the consideration for which an instrument is given be illegal, the whole is vitiated.

But here a distinction must be drawn between contracts that are divisible and those that are indivisible.

[Sidenote: _Hay_ v. _Ayling_.]

_Hay_ v. _Ayling_[73] is an example of an indivisible contract. In 1848 the defendant owed one A £100 on a bet on a horse-race. A was also indebted to the plaintiff. A by arrangement drew a bill on the defendant for the amount which the defendant accepted and was indorsed by A to plaintiff. The bill was dishonoured and the plaintiff at defendant’s request gave him further time and took from him a renewed acceptance, knowing at that time that the original acceptance was given for a gaming debt. _Held_ (1) That the fact of there being an additional consideration for the bill sued upon (_i.e._ the giving of time) would not be an answer to the plea of illegality, as illegality in any part of the consideration is sufficient to avoid the contract. (2) That the plaintiff having notice of the illegality could not recover as a _bonâ fide_ holder. (3) That the bills were avoided not by 8 & 9 Vict., c. 109, s. 18 (which statute, as we shall see hereafter, only avoids wagering contracts without making them illegal), but by 5 & 6 William IV., c. 41. It must at the same time be admitted that this view of the matter was not adopted in _Bubb_ v. _Yelverton_.[74] [Sidenote: _Bubb_ v. _Yelverton_.] This was a summons in an administration suit to determine the legality of a claim on a bond given by the Marquis of Hastings. Having got into racing difficulties, and being unable to pay his debts, his creditors threatened to bring the matter before the Jockey Club and have the Marquis posted at Tattersall’s as a defaulter. To avoid this the Marquis arranged to secure the payment of certain sums to his creditors by bonds with sureties. Lord ROMILLY decided in favour of the claims, on the ground that the consideration for the bonds was not so much the existence of a betting debt, but the forbearance of the creditors to bring the matter before the Jockey Club. It is, however, submitted that the bonds were void as having been given partially for an illegal consideration, viz., a series of gaming debts. [Sidenote: Contract divisible.] On the other hand, as an instance of a divisible contract, [Sidenote: _Clayton_ v. _Dilley_.] in _Clayton_ v. _Dilley_[75] the defendant authorised plaintiff to bet for him at the Epsom races. Plaintiff made two bets of £100 each, which were illegal under the Statute of Anne, and another of £5, which was admitted to be legal; all of them were lost, and paid by the plaintiff, who sued to recover from defendant. The Court held that he could recover the £5, but not the 200. It is obvious the commissions to make the different bets were separable.

So in _Lyne_ v. _Siesfield_[76] a broker sued his client for money paid to his use, to which defendant pleaded that the money was paid in respect of differences on certain contracts by way of gaming relating to the public funds and railway shares. _Held_, that as the plea was bad in parts, and had been united in one, the whole was bad.

[Sidenote: Remedy of person who has given bond or note, &c.]

III. It seems that a person who has given a bond, bill, or note to secure payment of a gambling debt, can bring an action in the Chancery Division to have the security delivered up to be cancelled, and also under the whole practice could obtain an injunction against suing at law to recover upon it.[77] But since the Judicature Act,[78] no proceeding in the High Court can be restrained by injunction, though probably this does not affect an injunction against suing in any other court. In some of the cases referred to, the action restrained was brought in an Irish Court; in such a case probably an injunction would lie even since the Judicature Act. In the case of the acceptor of a bill or maker of a note being compelled to pay the amount to a _bonâ fide_ holder, [Sidenote: