Scottish Court of Session Decisions

At advising on 3rd November 1939,—

LORD JUSTICE-CLERK (Aitchison).—In this case the question is whether a member of a football pool who stakes money upon his forecast of the results of football matches is entitled to invoke the aid of the Court to recover his winnings from the promoter of the pool, or whether an action for this purpose is excluded as being laid upon a transaction which is sponsio ludicra and unenforceable by the law of Scotland. Owing to the widespread ramifications of this kind of transaction the question is of general importance. In order to decide it, it was essential to ascertain what was the contract between the member and the promoter. Proof was led before the Lord Ordinary, directed and restricted to this issue. The Lord Ordinary has now held the transaction to be sponsio ludicra, but, taking the view that the defender was merely a stakeholder in the transaction, he has held upon his reading of the authorities that the action may be maintained. The defender reclaims. [After the narrative quoted supra his Lordship continued]—

It was not disputed that an action for recovery of a gaming debt is not maintainable against the party in the gaming contract with whom the bet or wager is made, and it is now settled that it makes no difference to the application of the rule that there does not exist any dispute as to who is the winner of the bet or wager, or as to the amount of his winnings. An admitted gaming debt is irrecoverable by an action at law—Robertson v. Balfour . The rule of the common law is that the Court will not lend its aid to enforce a transaction of this nature, not because the transaction is illegal or involves a contravention of the criminal law, for betting per se is not illegal, but because it is not every covenant and agreement that the Court will take under its protection, as where the engagement is not of a kind to merit the countenance of law. "Courts of Justice … were instituted to enforce the rights of parties arising from serious transactions, and can pay no regard sponsionibus ludicris"—Wordsworth v. Pettigrew . But it was maintained that the rule is subject to an exception where the action is not one brought upon the wagering contract and directed against the loser, but is laid upon a collateral or subsidiary contract of mandate or agency, express or implied, whereby a stakeholder, not being the loser, undertakes to pay to the winner the stakes held by him for behoof of the winner under the gaming contract. It was contended, therefore, for the pursuer that the present action fell within this category, that it was not an action against the loser of a bet for recovery of the bet, but was an action, founded upon agency, for recovery of the stakes held by the defender as agent on behalf of the pursuer as a party to a gaming transaction. It is necessary, therefore, to consider carefully what was the true nature of the contract, and between whom it was made.

In Attorney-General v. Luncheon and Sports Club, Limited, the Crown sought to recover from a limited company, which was the proprietor of a club, a certain sum in name of betting duty which is imposed on every bet made with a bookmaker in terms of the Finance Act, 1926, section 15. Upon the club premises betting on horse races was transacted through the instrumentality of two totalisators owned by the company and worked by the company's servants. According to the headnote, any member of the club desiring to use these machines for the purpose of backing horses, on becoming a pool member, was supplied with credit vouchers of varying amounts. Under the rules of the pool 10 per cent of the gross amount of the stakes on each race was retained by the company, and the balance was divided among the backers of the winning horse in the proportion of their stakes. The winnings for each week were paid by the company from its own funds irrespective of any possible loss owing to dishonour of the vouchers. The rules provided that the club acted simply as a distributing agent. It was admitted that the company was a bookmaker, and that the transactions in question were bets within the meaning of the Finance Act, 1926. It was held by the House of Lords, affirming the Court of Appeal, that the bets were made not with the company, but by the members of the pool inter se,and that the claim of the Crown failed. The ratio of the judgment is stated in the speech of Lord Buckmaster in the following passage (at p. 405):

"What is the contract each member makes with the respondents ? It is nothing but this; in consideration of your providing me with the use of the machine, placing at my disposal the clerical assistance, undertaking to pay me if I win the money other members have promised me to pay and guaranteeing the amount, you shall have 10 per cent of my stake. In this I can see no trace of gaming or wagering with the respondents. To them the rise and fall of odds, the success or failure of a horse and all the hopes and hazards of the turf are completely immaterial. They can never lose except to the extent of discredited vouchers, and loss due to that act of dishonesty is itself independent of the race. Rowlatt, J., and the Master of the Rolls, who alone decided in favour of the appellant, base their judgment on the view that the club are principals, but, even if this view were right, it does not follow they are principals in making bets. A bet is something staked to be lost or won on the result of a doubtful issue, but no doubtful issue affects the respondents—they neither win nor lose on any such chance. Nor does it seem to me that the test applied by both these learned judges ‘that the winners look to the club and the club to the losers’ is a critical test of whether or no they made a bet. To guarantee the honesty of a gambler, though it may be taking a risk, is not making a bet. I cannot find that there is anything to throw doubt on the accuracy of the statement that the respondents were distributing agents who guaranteed the honesty of all the people who used the machine and took 10 per cent for their trouble and risk."

Lord Sumner agreed, and concurring opinions were delivered by Lord Dunedin, Lord Blanesburgh and Lord Warrington.

The effect of this judgment was considered in the High Court of Justiciary in several cases, and in particular in Strathern v. Albion Greyhounds (Glasgow), Limited, by a bench of Seven Judges, where the question was whether persons occupying and managing a totalisator were guilty of a contravention of the Betting Act, 1853, sections 1 and 3. By a majority of five to two it was held that there was a contravention, and four of the judges who formed the majority expressed themselves as unable to agree with the opinions and reasoning of the learned judges in the Luncheon and Sports Club. They were, of course, free to do so, as the High Court of Justiciary is a supreme Judicature, and decisions of the House of Lords are not binding upon it. None the less, sitting in the Court of Session, I have no doubt that the decision is binding upon us, and we must follow its guidance in so far as it is relevant to the present question.

Applying the ratio of the Luncheon and Sports Club, it must in the present case be accepted that, as there was no doubtful issue to affect the defender, in respect that he could neither win nor lose on any chance, he did not make, for himself at any rate, any bet with the pursuer. On the reasoning of the House of Lords no escape from this conclusion seems possible. If, therefore, it were enough to exclude a plea of sponsio ludicrato show that the wager of the pursuer was not with the defender, that would be an end of the matter, and the question would be concluded. But, then, the doctrine of sponsio ludicra involves as its primary postulate that the Court will not take certain kinds of engagements under its protection, and it therefore becomes necessary to examine and define the real substance of the engagement which the pursuer is seeking to enforce.

I have already narrated in an earlier part of this opinion the contract as it was constituted by the completion of the coupon by the pursuer, its acceptance by the defender, and the defender's practice in conducting the pool. Three conclusions appear to be unchallengeable:—(1) that the pursuer was gaming. It is perfectly idle to pretend that the pursuer was not staking his twopences on the result of an uncertain event; (2) that the defender as pool promoter bound himself to pay to the pursuer on the issue of an uncertain event his gaming winnings; and (3) that the defender's obligation was to pay the winners, including the pursuer, if he won, in accordance with their priorities, as determined by their forecasts, sums of money amounting in all to the total stakes, less his commission and expenses, and that independently of whether he recovered from the losing members of the pool. Adjudication, division and distribution under the contract all preceded the complete collection of the stakes. If the defender was not the principal with whom the bet was made, he undertook to discharge the obligation of a bookmaker in a question with the pursuer. He was responsible for the payment of the bet. Although on the pool as a whole he could not be the loser, it was only through him and by virtue of his personal obligation that the wager could become effective.

What was the true character of this engagement ? It was contended that the defender was merely a stakeholder, and the law, it was said, did not forbid an action against a stakeholder by a winner for payment of the stakes where there was no question as to who the winner was or the amount of the prize.

A stakeholder is a person in whose hands money or some other valuable thing has been deposited to abide the issue of an uncertain event. But no money was deposited in the hands of this defender to abide the event. On the contrary, members of the pool were expressly forbidden to send money with their forecasts—"money staked on this coupon must not be sent until next week." I cannot see how this defender can be fitted into the definition of a stakeholder. In any event, it is not every stakeholder against whom an action is maintainable. It depends upon the nature of the contract or engagement upon which the action is laid. In Calder v. Stevens a stakeholder was sued for recovery of a prize gained by a horse at a race meeting. The action was held to be maintainable. The Lord Justice-Clerk (Moncreiff), after dealing with the historical signification of sponsio ludicra as a stake consigned to await the issue of a game, and with the broad distinction drawn by the Romans between games of chance and "certamina de virtute," and pointing out that in such contests, involving skill or prowess, to contend for money stakes was lawful, although it was sponsio ludicra, proceeded thus (at p. 1077):

"While, therefore, our Courts would probably refuse to decide who was the victor in such a game, or who gained an archery or rifle prize, still, if the contest was lawful in itself, and no such question unsuitable to a Court of law arose, there is no principle on which they should refuse to decide a purely patrimonial question arising out of it. If the holder of the Elcho Challenge Shield refused to deliver it to the acknowledged winners, I do not suppose we should hesitate to do justice in such a case; and the case of Graham v. Pollok about the prize at the coursing match is an illustration of the distinction. For in all these cases, and many more which might be suggested, the contest or sport itself was lawful, although gambling on the issue was illegal."

Now, I cannot see how this decision, or the observations of Lord Justice-Clerk Moncreiff, can in any way help the pursuer. Where is the analogy between an action for the recovery of a prize brought by the owner of a horse which has won a race and gained the stakes deposited with the clerk of the course, and which in a reasonable case can be regarded as a reward in a contest of skill, and an action brought by a punter to recover his winnings where by a freak of chance he has been successful in a pure gamble into which skill in no intelligible sense can be said to enter ? Between these cases I cannot discover any resemblance.

In Graham v. Pollok, referred to in Calder v. Stevens, the Court entertained an action of multiplepoinding brought by a stakeholder, a question having arisen between the owner of a dog which had been awarded a prize at a coursing meeting and the person who had nominated it for the stakes. Doubt was expressed as to whether the action was not excluded as being on a sponsio ludicra, but the Court allowed it to proceed upon the ground that the competition was for a prize which was lawful, that the event had been determined, and that the only issue was whether the owner of the dog had assigned his interest in him to the nominator for the purposes of the race. The Court treated the question as one of patrimonial interest that they might investigate, but the Lord President (Boyle) had serious doubts about the matter. He said (at p. 648):

"The law is quite clear that we are not to countenance sponsiones ludicrœ. Where, then, are we to draw the line ? If we are to entertain this case, I do not know where we will be sheltered. I see very great hazard in this. However laudable the sport may be, we have far more serious matters to attend to."

By the statute law of England (Gaming Act, 1845, section 18), gaming contracts are null and void and unenforceable, and an action against a stakeholder to recover money won upon a wager is not maintainable, subject to a proviso that the section shall not apply to any subscription or contribution or agreement to subscribe or contribute to a money prize. In Ellesmere (Earl) v. Wallace, which was an action at the instance of the Jockey Club, and a firm who acted as stakeholders for the club, against the owner of racehorses, it was held by the Court of Appeal that the entrance money for a race agreed to be paid by the defendant, for recovery of which the Jockey Club sued, was not a stake hazarded upon the result of the race, and an action for its recovery was not struck at by the section. Russell, L.J., as he then was, said (at p. 45):

"To the unsophisticated racing man (if such there be) I should think that nothing less like a bet can well be imagined. It is payment of entrance money to entitle an owner to compete with other owners for a prize built up in part by entrance fees, the winning of the prize to be determined not by chance but by the skill and merit of horse and jockey combined. … There is all the difference in the world between a club sweepstakes on the result of the Derby and a sweepstakes horse race as defined in the Rules of Racing. In each no doubt the winner is ascertained by the result of an uncertain event, but in the case of the former the winner is ascertained by chance … in the case of the latter the winner is ascertained not by chance, but by merit of performance. The former is a lottery; the latter is not."

I quote this passage from the opinion of Russell, L.J., which, as I read it, is the true ratio of the decision in Ellesmere, because I think it expresses what was the true ratio of the decision in Calder v. Stevens . Calder's casedid not lay down that an action is maintainable against a stakeholder for recovery of money won upon a wager. It laid down, I think, a much more limited proposition, namely, that an action may be maintained against a stakeholder for recovery of a prize in a competition involving skill, or prowess, or merit of performance, which is a very different thing. In O'Connell v. Russell the action was brought by the owner of a horse against a stakeholder who, on the result of a race, had paid the stakes to the owner of another horse first adjudged the winner. It was alleged that there had been unfair conduct on the part of the winning jockey, and that a complaint of this had been sustained by the referee, who had ordered the race to be run over again, and that, the only horse appearing being the pursuer's horse, the referee had declared it to be the winner. Obviously the Court would not entertain an inquiry of this kind, and the defender was assoilzied on the plea of sponsio ludicra. I cite the case for the opinion of Lord Deas, with which I entirely agree. He said (at p. 93):

"It appears to me that this action is to be regarded as being, in its substance, an action for recovery of money won by a wager on a horse race. Taking it so, I am of opinion that it is an action not maintainable by the law of Scotland. It matters nothing to this point whether the action be directed against the losing party, or against the depositary. If the mere fact of the money being deposited instead of remaining in the hands of the parties could get them out of the law, it would be very easy to evade the law in all cases."

Counsel for the defender, conscious of the difficulty if the defender is a stakeholder, proceeded to describe him as a "distributing agent," a description borrowed from the Luncheon and Sports Club. The defender, he argued, in effect said to the public:—

"I invite you to gamble—not with me, but with other members of the public—I will collect the money from all of you after the event and will distribute it to the winners, and you will get your full winnings whether or not the losers pay their stakes into the pool."

I shall assume that this is a fair description of the contract. Does it elide the defence of sponsio ludicra? In my opinion, it does not.

What is meant by a "distributing agent"? I understood the argument to be that the defender was a mere agent in these transactions, a receiver and disburser of stakes. If he was a principal, he was not a principal in making bets. Esto that this accurately represents the contract, the fact remains that in the plain intention of the parties the liability of the defender was a personal liability to pay the pursuer his winnings in the gambling transaction. Assuming, on the authority of the Luncheon and Sports Club, that de jure the obligations of the gambling contract were on the pool members inter se, it would, in my opinion, be an undue refinement of the doctrine of sponsio ludicra to exclude its application where de facto the defender is the obligant in the gaming debt. In considering whether the doctrine applies it is the duty of the Court to look at the real substance of the transaction. The Court would simply be stultifying itself if we were to shut our eyes to the fact that under the contract it was to the defender alone that the pursuer could look for payment of his wager.

Apart from Calder v. Stevens the pursuer's argument was rested mainly on the Luncheon and Sports Club. It is necessary therefore to observe that the decision of the House in that case was concerned with one point only, and that was whether the club was making bets with pool members so as to be liable to betting duty under section 15 of the Finance Act, 1926. The question whether a member could have sued the club for his winnings in the event of its default was not even mooted. It was sufficient for the decision of the case to answer the only question raised in the negative, and it was not necessary for the House to explore or define the exact nature of the engagement between the club and the members of the pool. Had it been so, I think that regard would have been had to the opinion of Russell, L.J., in Ellesmere (Earl) v. Wallace on the matter of multipartite wagering contracts, from whose opinion (at p. 52) I quote this passage:

"The truth is that you cannot have more than two parties or two sides to a bet. You may have a multipartite agreement to contribute to a sweepstake (which may be illegal as a lottery if the winner is determined by chance, but not if the winner is determined by skill) but you cannot have a multipartite agreement for a bet unless the numerous parties are divided into two sides, of which one wins or the other wins, according to whether an uncertain event does or does not happen."

I respectfully agree with this formulation of the nature of a bet as distinguished from a sweepstake, but, applying it to the facts of this case, I find it very difficult to regard the defender's pool as a contract in which each member of the pool is betting against all the other members of the pool conceived as a collective person. Theoretically it may be so, but the transaction seems to answer better the description of a multipartite agreement, whether a sweepstake or some analogous form of lottery. In the Luncheon and Sports Club case Lord Blanesburgh, while bestowing some favour on the notion that the pool members were betting inter se, went on to say this (at p. 407):

"I can see in these by-laws"

—that is, of the club—"no room for the making of a bet between any pool member and the club. I am doubtful indeed whether they connote the making of any bets at all either between pool members individually or between losing pool members on the one hand and winning pool members on the other. Rather do I view each pool as being something in the nature of a highly developed sweepstake offering results which, it is true, become practically possible only through the fool-proof accuracy of the totalisator, but which, theoretically, would be equally attainable with the assistance of a calculating boy of requisite genius and character."

I have come to think, following the suggestion of this passage, that the conception of a sweepstake, or some analogous form of lottery, comes very near to the substance of the defender's pool. The members are not betting with the defender, and, it may be, not even inter se,but they are none the less staking their money on an uncertain event to be determined by chance, the chance being not the chance of the draw as in an ordinary lottery, but the chance of the accuracy of their forecasts. The pool would thus become an unusual species of sweepstake or lottery, organised, advertised and conducted by the defender as its promoter, a scarcely disguised gambling machine of which the defender is the lynch pin, without whom the whole mechanism would fall to pieces. There is no case in our books in which a successful competitor in a sweepstake or lottery, or any form of gaming transaction, who has won his prize by pure chance, has ever been permitted to make use of our Courts of Justice to recover it. The principle upon which our Courts have consistently refused to entertain actions of this kind is that enunciated by Lord Kames in his Principles of Equity (4th ed., p. 25), that an engagement of this sort, to whatever legal category it may belong, "ought not to be converted into a serious matter, by bringing the fruits of it into a Court of justice," or, as it is put by Professor Bell in his Commentaries (7th ed., vol. 1, p. 320), "the laws of the country and its judicatures were instituted to determine adverse rights, and not the idle or impertinent doubts and inquiries of persons not interested in the matter."

It is upon this broad and salutary principle, which is deeply rooted in the law of Scotland, that I come without hesitation to the conclusion that this action should not be entertained. Stripped of all refinements it is simply an action for recovery of a gambling debt. I appreciate that there may be a difficulty in saying to what precise legal category the defender's engagement is to be consigned, but that, in my opinion, matters not at all in a case where the frivolous character of the engagement is so transparent that it cannot be pretended that the action is to enforce the rights of parties arising from a serious transaction. In my opinion, the reclaiming motion should be allowed and the action dismissed.

LORD MACKAY .—In this action to recover the sum of £2497, 16s. 11d., being the remainder of a total sum of £7576 which the pursuer was announced by telegram and letter to have become entitled to as a "prize," the defender, being variously described as a "promoter," or "manager," or "distributor," in a football points pool, resists decree, and he does so entirely in reliance on excluding the jurisdiction of the Court to deal with him.

A short statement, first, of how, to my thinking, the sum arises. The promised prizes depended, in the competition of the week ending 6th April 1935, as in all weeks, on the number of "entries" or "investments" of 2d. From the total authentic entries recorded certain percentages are taken off (1) for agent's commission (a fixed sum, fixed, of course, by the actual amount entered by card), (2) for the promoter's or manager's commission (5 per cent, fixed likewise), and (3) for "minimum expenses," as fixed by a chartered accountant. Obviously, all these but the last are pre-determined by the amount subscribed. What remains of a fixed sum, being itself therefore a fixed sum, is divided out into first, second and third prize amounts. In this case, the whole first prize amount is admitted to have been won by one man (Kelly) as being the sole person who attained to a certain proportion of correct results in forecast, being the best result for the week, and therefore obtained a maximum of points for that week. From the £7576 Murphy withheld on the pay day (the Friday after the football matches were played) a half—£3788. He now admits having been defrauded, because he allowed a fraudulent post-entry by one who pretended to enter a forecast after all the events were decided. And he did this by temporarily admitting a second claim after he had not only adjudicated but intimated the results to winners. He has sued the defrauder, had him convicted in the criminal Courts, and has also obtained a civil decree for return of all the money so by fraud obtained. This civil decree has availed to effect recovery (by diligence) of £1290, 3s. 1d., which sum (recognising at least moral obligation) he paid out to the admitted true winner. Deducting that from the half withheld, we get still outstanding £2497, 16s. 11d.

The two limbs of the defence, inasmuch as both go to excluding our jurisdiction from any consideration of the merits, may be taken in either order. One asserts exclusion of our jurisdiction by contract, as viz., that the defender achieved a clause in the bargain by which he, and he alone, was to "adjudicate," and his adjudication was to be final. By the other defence the promoter pleads sponsio ludicra, alleging that, if he was party to a sponsiowithin the meaning of Scots law (and he says he was), the Courts will refuse their judicial decision and all other means of enforcement. [His Lordship proceeded to examine the evidence bearing upon the first of these defences, and, having done so, stated his conclusion as follows]—

Accordingly I reach the conclusion that the pursuer did not enter this competition on the footing that he barred his action in a Court of law in favour of the adjudication of the defender, Murphy.

I have found the point arising on sponsio ludicra difficult, and the opinion which I shall finally express here is, frankly, not that which I had originally formed.

In my opinion, the question (after consideration of the state of evidence, which is always first) depends on whether the contract made between Kelly in Bolton and Murphy in Edinburgh was in law a bet, or a gambling or a gaming transaction. These three categories have always been the criteria of the Scottish doctrines now to be shortly considered. I know of no instance in the books wherein the Court's reluctance to lend its aid in working out rights has been extended to wider areas. I am generally against vastly extending the bounds to which law will not allow itself to penetrate.

We had occasion last year to determine, finally for this Court, the exact outlook of Scots law upon the enforcing of betting transactions, wagering contracts or gaming contracts—Robertson v. Balfour . I refer particularly to my own opinion, and that of Lord Wark, both of which discussed all the prior authorities relating to civil enforcement fully. The opinion of the Lord Justice-Clerk, while shorter in context, is, of course, entirely at one both in principles and results. The ratio of the law of sponsio, as deriving from the Civil Law, and the differences from the outlook of the English law, as there formulated, have not been again canvassed; as indeed, without applying for a fuller Court, they could not well be. To avoid repetition, I would beg to incorporate my own opinion as reported, particularly the passage at the middle of p. 218 of 1938 S. C. Those opinions left quite untouched, and after full citation, the series of cases wherein the Court, by judgment or by dicta, gave its full sanction to suits, of a variety of sorts, which did not directly enforce the contract between the two persons who were the direct participants in a bet, a wager or a gaming transaction, albeit these rights and obligations arose out of such a transaction between others, and could not ever have come into being but for a connexion with these not-well-favoured transactions. Instances are O'Connell v. Russell; Graham v. Pollok; Calder v. Stevens —see my opinion in 1938 S. C. at p. 218 and p. 221. One agrees, of course, with the obvious exception formulated as early as 1753 by the reporter who was one of the bench, probably Lord Kames, in Sir Michael Stewart v. Earl of Dundonald (at p. 9515):

"They ought to be left upon private faith, and neither be supported by an action, nor cut down, unlessattended with the circumstances of fraud or extortion."

There was much to be said for the view that fraud opens the door wide in the present case, for the claim of the defender not to pay the remainder depends on this, that he personally (and not the community of stakers) trusted and was defrauded by one X; and that he now wishes to be relieved of all the remanent consequences of that fraud. He is willing to recoup the true winner only in so far as he can succeed in forcing money out of the defrauder. In effect, and in short, he has passed on to the shoulders of Kelly all the ascertained loss of allowing himself to be defrauded. But I am unable to found on this established exception (fraud), since Kelly is not suing upon a fraud on himself by Mr X, but depends on his contract with Murphy alone.

Failing that view, I have come to think that we must make up our minds whether the contract between Murphy, the alleged "promoter," and each several contributor of 2d. to the "pool" by his signing his card and handing it in, was within the meaning of Scots law a sponsio ludicra. I agree that the question (to be tried by Scots law, the law of the forum, in the absence of any averment of a different English law) is not necessarily to be answered in the same way as a question of nullity under the various English statutes affecting civil contracts in the realm of civil jurisdiction. The solution depends, and must depend, upon the answer in fact:—Was Murphy's engagement either a bet or a wagering transaction, or a gaming transaction quoad Kelly ? For I am fully advised, after looking at the authorities, that, like the analogous English law of nullity, the stigma (of sponsio with us) only attaches if it be one of these three categories.

I find in cognate matters (while each case, especially every criminal case, depends on its own facts primarily) two trends of opinion forming and hardening (a) among English judges (covering Scottish judges sitting in English cases), (b) among the members of the Scottish judiciary, as to the root question of the essentials of any "bet," "wager" or "gaming." While there had, in England, been some hesitation among judges as to what these essentials were, these judges have finally, and now unanimously, approved and applied the definition of wagering or gaming transactions given by Hawkins, J., in Carlill v. Carbolic Smoke Ball Co., at p. 491 of [1892] 2 QB 484; by Cotton, L.J., in Thacker v. Hardy (at p. 695), approved and applied in a Privy Council case by Lord Chancellor Herschell—Forget v. Ostigny, at p. 326; by Lord Dunedin in the Luncheon Clubcase, at p. 406, (limited formally, no doubt, to "betting"). These strong dicta were followed, and have been several times applied, in England since then, and notably by Lord Chief Justice Hewart in Richards v. Price, at p. 207, and Everett v. Shand, at p. 530. The present Lord Chief-Justice faces and answers the difficulty felt by Lord Jamieson of postulating a large series of contracts with persons unknown (but readily ascertainable through the tickets). On the other hand, somewhat wider horizons seem to be indicated by Scottish judges in the following cases:—Hart v. Hay Nisbet ("coupon betting") in 1900; Strang v. Brown ("dog racing and tote"), per Lord Hunter and Lord Anderson, in the year 1923. Lord Hunter, it is true, refused to try to define a bet, but he sought to treat Mr Justice Hawkins's dictum or definition as special to the comparatively easy case with which that judge was dealing. His Lordship also said (at p. 79):

"Strang has in fact made a promise to that individual that a sum largely in excess of the 2d. will be given, if that person is successful in naming the winners and otherwise predicting the result of the game."

The author of Street's Law of Gaming (ed. 1937) says (at p. 103):

"The scheme"

(in Strang's case) "in fact differed from the modern football pool only in that the subscribers paid in advance." In other words, as it seems to me, these Scottish judges, sitting in a criminal Court, refused to lend ear to the views taken by so many other judges that in the newspaper coupon, as in the totalisator cases, the mutuality of risk is among, and confined to, the community of contributors of the "stakes" inter se,and that the "promoter" does not share the gaming risk. They will not have it that the absence of a counter stake, or similar dependence for either loss or gain, as it may hap, on the "chance" under consideration, has effect in removing the promoter's or distributor's part of the transaction into a safe and enforceable category.

Had the matter rested there, my own mind would have found it sufficient and indeed very convincing to say that the fuller consideration, given six years later by the House of Lords in an application which was now a civil cause (being an information to recover a duty laid upon "bets with a bookmaker") to that critical question, enabled us in Scotland, or even should compel us, to take a fresh angle. The reference is, of course, to the Luncheon Clubcase. But it did not rest there. I follow the history further. In 1930 a new Court of final criminal appeal in Scotland considered both the 1923 decision and the Luncheon Club speeches, and decided to follow the Luncheon Club. This High Court quashed convictions under section 1 of the 1853 Act. Lord Clyde, Lord Blackburn and Lord Sands gave the reasons—Strathern v. Scottish Greyhound Racing Co. In 1933, in Gibson v. Laird the same criminal Court applied the reasoning, as they supposed, of Luncheon Club to alleged offenders under section 407 of the Burgh Police Act, 1892. But now, in the very same year, a case under the Betting Act, 1853, section 1, was sent to a Full Bench, and seven judges by a majority of five to two overruled Gibson v. Laird and the Scottish Greyhound Racing Co. cases—Strathern v. Albion Greyhounds (Glasgow), Limited . Lastly, one of our Outer House judges (Lord Robertson) (acting without a proof and on relevancy only) has now gone back to and applied the ratio of the 1923 decision (a) to a civil cause, and (b) to a "pool" transaction very difficult to distinguish from the present, and where the suit was brought between the "staker" and the "promoter"—Wilson v. Murphy .

These later views, in full knowledge of Luncheon Club and the dicta founding them, therefore require serious consideration. Let me say at once that, much as I admire the Lord Ordinary in question, he being without proof of the facts, and proceeding expressly on the authority of 1923, his written opinion has not much cumulative weight, beyond the more fully argued precedents. Secondly, I remind and warn myself that a set of criminal judgments in Scotland can hardly contain binding authority for any civil cause, (1) because they necessarily rest on the very words of the Acts alleged to be breached; and in the 1933 Strathern casethese were expressly the words of section 1 of the Betting Act, 1853; (2) because the objection of sponsio ludicra is by its nature a civil defence, and is neither appropriate to, nor applicable in, a criminal prosecution under a statute. Almost as much can really be said of the Luncheon Club case itself, because, though civil (as relating to recovery of a duty), the question turned on whether there was a contract as defined by a criminal section. But what is a common thread running through all these cases is the primary question "What is a bet; what is gaming; what is a wagering transaction ?" On that point they all touch one another, and this case. I have been totally unable to rid myself of the conviction, as it was indeed argued to us, that thereon turns the decision. And I think, for my part, that the reasoning of the ultimate Scottish speeches will not square with the speeches in Luncheon Club.

The difficulty, however, is little less. Of the majority of five in the Strathern case of 1933, the opinion of Lord Sands seems to me to turn almost wholly on the view that under section 1 of the criminal statute anyone who "invites" another to bet is guilty, and that "the tote" did so invite. Lord Murray's opinion, however, seems to follow the Scottish case of Hart in "rejecting the argument of ‘joint stock contribution by backers’ on the ground that, as here, there was no contractual relation between the backers inter se." Lord Hunter's opinion I have already canvassed. Lord Anderson's depends on fact; and the kernel is in this passage (at p. 116):

"Where a pronouncement on a point of law is made by the House of Lords, it is to be treated with due respect whether it convinces or whether it does not; where the pronouncement is concerned with a matter of fact, it is to be respected only in so far as it convinces."

Applying this opinion to the facts in the totalisator cases before him, he proceeds thus:

"The obligation of the backer is to allow the tote to retain 10 per cent of his stake for expenses of management. The obligations of the tote officials are to provide betting facilities and to pay to the winners their share of the pool. It does not seem to me to be material or relevant that payment is made, not out of the tote's own funds, but out of stakes furnished by losing backers. The transaction, in my opinion, is betting between the public and the tote management."

The last sentence requires underlining. I have been much exercised with these reasonings, whether they be good or imperfect. In the end, I have reluctantly concluded that the general weight and trend of Scottish dicta go to indicate that to create a bet or a wagering transaction in our law, it is not necessary (as for England is now fully decided) that there should be between the two contractors, a mutuality of risk, so that when one loses the other gains, and that where the one gains the other loses. Nor is it an answer, in the same trend of opinion, that the promoter's only "gain consisted in the commission which he was to receive, whatever might have been the result of the transaction to the" stakers. I use the words of Cotton, L.J., quoted in Forget v. Ostigny, at p. 326.

If the latter view prevailed, this transaction would be no wager and would not be sponsio ludicra. But I feel myself, in loyalty to the considerable trend of Scottish legal opinion, bound meantime to negative that necessity, and so to join your Lordship and Lord Jamieson in thinking that sponsio ludicra is an apt description of the present contract. Therefore our jurisdiction, by a rigid rule of our practice, will not be applied, and is excluded. If so, the action must be dismissed.

It is perhaps only due and right to say that, had my mind stood free and unaided by the clash of dicta and the heavy trend of Scottish cases (not, of course, of judges directly considering sponsio ludicraat all), I think I must have arrived at the same results as Lord Justice Cotton, Lord Blackburn, Mr Justice Hawkins, Lord Chancellor Herschell, Lord Dunedin and Lord Buckmaster on this question of what is essential to a bet, or wager, or gaming. [His Lordship thereafter referred to a view, not argued before the Court, that the transaction might be regarded broadly as an illegal lottery or an illegal sweepstake. He indicated his opinion that as lotteries and sweepstakes were not in Scotland illegal at common law, any argument that the present transaction was illegal and unenforceable upon this ground would have to be based upon pleas founded on definite statutory enactments referred to upon record, and that in the present action there was no such basis, and continued]—

My vote on a narrow and intricate question depends, therefore, on the ratio above set out, and on it alone. Had I been able to escape that trend of Scottish authority, I should have adhered to my strong original view, and been for granting decree for the principal sum de plano, with interest to run only from the date of service of the summons.

LORD WARK .—When this case was last before us the pleadings of parties were so lacking in precision that we gave them an opportunity of making extensive amendments; and thereafter allowed a proof of the nature and incidents of the contract sued on. That proof has now been taken. I agree with the statement given in your Lordship's opinion of the facts which it has disclosed with regard to the nature of the contract and the circumstances in which the pursuer's claim arises.

The defender states two separate defences. The first is that contained in his first plea in law, namely, that the transaction out of which the claim arises being a sponsio ludicra, it is not cognisable in a Court of law and the action should be dismissed. If we are free to follow the opinions of Lord Hunter and Lord Anderson in the High Court of Justiciary in Strang v. Brown, and the decision of the same judges in Yeudall v. M'Quilkie, and of the majority judges in Strathern v. Albion Greyhounds, it would be easy to sustain the plea. These decisions are not technically binding on us, sitting in a civil Court, but they all, and especially Strang v. Brown, which is almost identical in its facts with the present case, proceed upon the view that a participant in a tote or a pool of the sort which we are here considering bets with the proprietor of the tote or the promoter of the pool. But we were referred to the decision and the dicta of the House of Lords in Attorney-General v. Luncheon and Sports Club, Limited . Your Lordship has narrated the circumstances of that case and quoted from the opinion of Lord Buckmaster and Lord Blanesburgh. Lord Dunedin said (at p. 406):

"The essence of a bet is that on the determination of an event in one way the first party wins and the second loses; on the determination the other way the first party loses and the second party wins. … Inasmuch as on the determination of the event in question—to wit, whether a certain horse is first or is placed in a race, as the case may be—the club can neither win nor lose, it follows that there is no bet with the only bookmaker alleged."

In the Luncheon Club case their Lordships did not profess to be laying down any new principle of law. There are earlier English authorities to the same effect. In Thacker v. Hardy, which was concerned with transactions upon the Stock Exchange, Cotton, L.J., said (at p. 695):

"The essence of gaming and wagering is that one party is to win and the other to lose upon a future event, which at the time of the contract is of an uncertain nature—that is to say, if the event turns out one way A will lose; but if it turns out the other way he will win. But that is not the state of facts here. The plaintiff was to derive no gain from the transaction; his gain consisted in the commission which he was to receive, whatever might be the result of the transaction to the defendant. Therefore the whole element of gaming and wagering was absent from the contract entered into between the parties."

And, dealing with the earlier case of Grizewood v. Blane, which was concerned with speculation on differences, the same learned judge said (at p. 696):

"There existed the essential element of wagering; each party was to gain or lose according to a subsequent event, and the transaction was a wagering contract."

These dicta were approved by the Privy Council in Forget v. Ostigny .

Now, the outstanding fact about the contract in this case is that the defender undertook no such risk. It was a matter of entire indifference to him which of the various football teams mentioned in his coupons won, drew or lost their matches; or which of the participants in the pool was successful in predicting the results of these matches. But even if we are bound to follow the views expressed in the House of Lords in preference to those expressed in the series of Scottish cases above referred to, that, in my view, is by no means the end of the matter. Even if it must be taken that the pursuer was not betting or wagering with the defender, he was undoubtedly betting or wagering; and he is now endeavouring to recover the proceeds of these wagers from the defender. Can such an action be entertained by our Courts—an action directed, not against the other participants in the pool, but against the person who has organised the pool and undertaken to collect their money for the purpose of carrying out the pool operation ? That question was, of course, not raised in Attorney-General v. Luncheon and Sports Club . Indeed, in England it could not arise in the same form, since there are statutory provisions with regard to recovery of the subjects of wagering contracts which do not apply to Scotland. The Gaming Act, 1845, renders action incompetent for the proceeds of a wagering contract in the hands either of the other party or of a depositary. As your Lordship has pointed out, there is a proviso that the section shall not apply to any subscription or contribution, or agreement to subscribe, or contribute, to a money prize. That Act does not apply to Scotland; and there is no similar statutory provision which does apply in Scotland.

There is authority for the view that the mere fact that a contract sued on has a collateral or remote connexion with a sponsio ludicradoes not render action on that contract incompetent. In Knight v. Stott it was held that a betting agent might competently sue his principal for recovery of sums disbursed by him on account of bets lost. The Lord President remarked that there is no such legal taint in betting as to infect all contracts which are in any way related to it. This decision does not appear to me to assist the pursuer. The case is not one in which it was sought to recover the proceeds of a wager. It was simply an action to recover moneys which the pursuer had been duly authorised to expend on behalf of the defender; and the fact that these sums had been applied towards wagering contracts was regarded as irrelevant. Graham v. Pollok was concerned with a dispute as to which of two parties, the owner of a dog or the person who had entered it for a coursing race, was entitled to the prize which the dog had won. The case was concerned with the terms of the contract between the parties which was not a gaming or wagering contract. O'Connell v. Russell was a case in which the doctrine of sponsio was applied by certain of the judges. The averments of the pursuer were held by the Lord President and Lord Curriehill to be irrelevant; but the Lord President, Lord Deas and Lord Ardmillan held that the contract sued upon was a wagering contract, and, as such, could not form the foundation of an action in these Courts. It is not very clear whether the element of pactum illicitum or of sponsio ludicra was regarded as the more important. The Lord President seems to incline to the latter. Lord Deas plainly relies on the former, and Lord Ardmillan seems to include both. The case was an easy one in which to apply the doctrine of sponsio ludicra because the pursuer was asking the Court to determine whether a certain horse had won a race. The only decision which appears to me to have a direct bearing upon the present question is Calder v. Stevens . A number of persons had entered horses for a race, each subscribing the sum of three guineas, to which was added £20 by those holding the race meeting. The pursuer brought an action against the clerk to the course for payment of (1) £15—the amount of the stakes—and (2) the £20. The clerk, who admitted that the pursuer's horse had won and that he held the stakes and prize money, pled sponsio ludicra. The plea was repelled. The Lord Justice-Clerk, who delivered the opinion of the Court, began by saying that the plea of sponsio ludicra was derived by our law from the law of England (a view which I humbly think is without historical justification). He then went on to say that betting and gambling are pacta illicita, but a bargain about a horse race is not necessarily pactum illicitum, because a horse race is not unlawful. He then proceeds (at p. 1077):

"The technical signification of sponsio among the Romans was contentio quœ fit deposito pignore and was generally applied to a wager or consignation to await the issue of a lawsuit. So sponsio ludicra was a stake consigned to await the issue of a game."

He goes on to point out that "the Romans drew a broad distinction between games of chance and ‘certamina de virtute.’ ‘Senatus consultum vetuit in pecuniam ludere; prœterquam si quis certet hasta vel pilo jaciendo, vel currendo, saliendo, luctando, pugnando; quod virtutis causa fiat.’ In such contests to contend for money stakes was lawful, although it was sponsio ludicra." Then follows the passage quoted by your Lordship in the chair.

I have quoted this judgment at some length because it is strongly founded upon by the pursuer, who contended that it amounts to a decision that the plea of sponsio ludicra is not good in an action against a stakeholder. I confess that I find it difficult to follow the reasoning of the judgment. For one thing, I think that the learned judge misapprehends the meaning of the passage quoted from the Digest. But one thing seems clear, namely, that the Court regarded the subject of the action there as a prize lawfully contributed for the purposes of a certamen de virtute—a contest of prowess or skill, something of the sort contemplated in the proviso to the section of the Gaming Act, 1845, to which I have already referred, and which was the subject of consideration in Ellesmere (Earl) v. Wallace . In any event, the reasoning of the judgment seems to me to be inapplicable to the kind of thing which we are here considering, namely, a congeries of wagering contracts in which the element of skill is so largely overborne by the element of chance. I am unable to say that skill is entirely absent from the process of filling up the coupons in the competition. If it were, the pool would be a lottery—Taylor v. Smetten; Barnes v. Strathern; Hall v. Cox —and in that case I have no doubt that an action would be incompetent, on the ground of sponsio ludicra—Christison v. M'Bride .

I have come to the conclusion that Calder v. Stevens is not in point in the present case. I do not regard that decision as an authority for the proposition that the proceeds of a wager may be recovered in the hands of a third person with whom stakes have been deposited. Betting and wagering are not illegal in the sense that they are punishable by law. But they cannot be the subject of a contract enforceable at law. This question was examined at length in the recent decision of Robertson v. Balfour, to which I was a party, and I think it unnecessary to go into it again. That case was an action by one party to a wager directly against the other party, there being no dispute as to the result of the wager. The Court refused to entertain it. The principle involved in that case was that the action was brought to recover the proceeds of a wagering contract—a contract which the law will not recognise. It seems to me that that principle must also apply to an attempt to recover indirectly from a third party with whom the wagerer has deposited the sum wagered. I respectfully agree with the opinion of Lord Deas in O'Connell v. Russell that "it matters nothing … whether the action be directed against the losing party, or against the depositary. If the mere fact of the money being deposited instead of remaining in the hands of the parties could get them out of the law, it would be very easy to evade the law in all cases." The football pool is a modern invention, and it is perhaps even more difficult than in the case of the tote, with which Lord Blanesburgh was dealing in the Luncheon Club case, to analyse its elements and to say what are the exact legal relations of the many parties to such a scheme. But some things seem to be clear, namely, (first) that the defender was not the holder of stakes deposited with him. It was a leading condition of the contracts between him and the participants in the pool that no money should be deposited with him to await the events on which wagers were made; (second) that he undertook to act, in a question with each participant, as the agent of the others, who were undisclosed principals; (third) that the whole scheme was one which was devised, managed and carried through by the defender for the purpose of promoting gaming and wagering. He is not a mere stakeholder. He is carrying on a business which is concerned solely with gaming and wagering; and the moneys sued for are simply the balance of the wagers, under certain deductions agreed between the pursuer and the defender. In my opinion, the respective rights of persons who participate in such a scheme are matters which come within the description given by Lord Kames in his Principles of Equity and by Mr Bell in his Commentaries, to which your Lordship has referred, and within the judgment in Wordsworth v. Pettigrew as not arising out of serious transactions, and so unsuitable for expiscation in a Court of law. I can see no principle under which the Court should lend its aid to an action against one who is the agent of other unknown wagerers, when action against the wagerers themselves is incompetent. I therefore think that the first plea in law for the defender should be sustained. It may seem to be unfortunate that the promoter of such a scheme should be in a position to evade payment by putting forward such a plea, but, in the present case, the effect of sustaining the plea is not to enable the defender to retain in his own pocket the proceeds of the pool but merely to relieve him of a claim for second payment of a sum already paid away by him to another competitor. [His Lordship then dealt with another defence, and thereafter concluded]—I agree that the action must be dismissed.

LORD JAMIESON .—The pursuer's case rests on the contract which he entered into with the defender. When the case was previously before your Lordships it was sent back to the Lord Ordinary to take a proof limited to the question of the nature, terms and incidents of that contract. The proof has now been taken. From the evidence it appears that the pursuer in the month of December 1934 became a weekly competitor in the Everyman's Points Football Pool promoted by the defender. As such he filled up one or more columns in a coupon of post card size, of which a number of specimens have been produced, handed his coupon to one of the defender's agents, and in the following week paid the agent 2d. for each column filled up. The specimen coupons produced show that in some cases reference was made on the back to the rules under which the pool was conducted, and in the coupon relating to matches played on 6th April 1935, the one which gives rise to the action, reference is made to another coupon called the "Staunch" coupon, to which I shall have to refer later. The pursuer appears to have paid very little attention to the rules. His evidence is, "I was content to take it that I would receive my proper share of the pool in the usual way." There is no dispute as to how the prizes were divided. The pool, week by week, consisted of the total amount which all the competitors had agreed to pay, under deduction of 5 per cent, the defender's profit, and expenses, including the commission paid to collecting agents. This was divided to the extent of three-sixths to those forecasting the highest number of points, and two-sixths and one-sixth to those forecasting the second and third highest number respectively. The contract entered into between the pursuer and the defender was therefore this, that in consideration of the twopence, or twopences, which the pursuer promised to pay to the defender, the latter agreed to make a payment to the pursuer in the event of his having either alone, or along with others, forecast the highest or second or third highest number of points. The pursuer's right to receive, and the defender's liability to make, any payment was therefore subject to two uncertainties, the results of the matches played, and the extent to which the pursuer had accurately, or more accurately than other competitors, forecast these results, while the amount of such payment depended on the total number of competitors and the number equally successful with the pursuer. The pursuer thus staked twopence, or a number of twopences, on the chance of winning from, and being paid by, the defender a much larger sum. I have stated in some detail what I regard the contract to have been, because of the divergence of judicial opinion in the decided cases as to the exact nature of the contracts in somewhat similar transactions. In the Luncheon and Sports Club case the question was whether members of a club backing horses on a totalisator managed by the club were betting with the club, so as to render it liable to pay duty as a bookmaker. The answer in the negative proceeded mainly on the ground that, as the club could neither win nor lose, and that the essence of a bet is that one party must win and the other lose, no individual member, when backing a horse, could be regarded as making a bet with the club. The case was not concerned with the question of a member seeking to recover from the club the amount which he had won by successfully backing a horse. The only question was whether the club had made a bet, and the decision was that the club management in operating the totalisator did not make a bet with any individual member, in respect that it was immaterial what horse won the race, or what member was the successful backer; in no case could the club lose. That, as I read the case, was all that it decided; but, in arriving at the decision, two distinct views of what were the contracts entered into by the backers were enunciated by the noble Lords. The first of these was that each member, when backing a horse, was entering into a betting contract with the other members who staked their money on that particular race. Lord Buckmaster said (at p. 405):

"The making of a bet is none the less the making of a contract, because it is by statute unenforceable and void. With whom then are these contracts made ? The rules say that they are made with the other members, and though, if that were a manifest cloak for the true transaction, no Court would be misled by mere colourable words but would seek the true bargain underneath, yet here I cannot see that the statement is at variance with the facts."

Lord Blanesburgh began by adopting that view, but proceeded to negative the idea that there was any contract between the members inter se, and set out an entirely different view of the position. After saying (at p. 407):

"I can see in these byelaws no room for the making of a bet between any pool member and the club,"

he proceeded:

"I am doubtful indeed whether they connote the making of any bets at all either between pool members individually or between losing pool members on the one hand and winning pool members on the other. Rather do I view each pool as being something in the nature of a highly developed sweepstake offering results which, it is true, become practically possible only through the fool-proof accuracy of the totalisator."

The views taken in that case did not commend themselves to the majority of the judges in Strathern v. Albion Greyhounds, Limited . In their opinion each transaction was a bet between the backer and the operator of the totalisator. I quote from the opinion of Lord Anderson (at p. 116):

"I am unable to see how a bet, which is a contract, can be made between one member of the public and others whom he does not know and with whom he has never come into contact. There is a contract made when a backer hands his shilling to the tote official, but it is a contract between the backer and the tote management."

Lord Sands said (at p. 124):

"The view has been suggested that the undertaking of the tote is an absolute not a contingent one, in respect that the tote has to pay in any case. As it seems to me, this view is rested upon the theory that the undertaking which the tote gives is not an individual one to each backer, but a collective one to the whole body of backers. This theory is, I think, unsound. The backers are not a community. The undertaking is several to each individual backer."

These were both cases in which the use of a totalisator was involved. In the former its use was limited to members of a club; in the latter any member of the public might make use of it. In these respects they may present some special features, but a case which is indistinguishable from the present is Strang v. Brown . There, Strang, a bookmaker, had promoted a competition under which participants paid twopence for the chance of prizes awarded to the two competitors who most accurately forecasted the results of, and the goals scored in, certain football matches. In essentials the competition only differed from the present in that it was conducted on a cash and not a credit basis. No fixed prizes were offered, but Strang did not distribute more than he received after deducting his expenses and a percentage as profit. It was argued that, as he did not stand to lose, he was not carrying on a betting business, but that argument was rejected, and it was held that he had been rightly convicted under the Ready Money Football Betting Act, 1920. Lord Hunter said (at p. 79):

"If you consider any particular individual, Strang has in fact made a promise to that individual that a sum largely in excess of the twopence will be given, if that person is successful in naming the winners and otherwise predicting the result of the game. I cannot see that that is anything other than a bet."

Lord Anderson said (at p. 79):

"It seems to me quite immaterial that Strang was to pay the successful competitors out of the unsuccessful competitors' contributions; it is none the less wagering."

Finally, in Wilson v. Murphy, an action against the present defender arising out of the same series of competitions as the present, Lord Robertson, following Strang v. Brown and Albion Greyhounds, Limited, held that the transaction between the parties was a bet. Were it not for the decision in the Luncheon Club case, I would have had no hesitation in following the Scottish cases. I have difficulty in seeing how any participant in a pool, either on a totalisator or in one such as the present, can be held to have made a bet with any other participant, or with all the other participants as a community. As Lord Buckmaster pointed out, a bet is nevertheless a contract, although unenforceable at law, and that a person should be held to have entered into a contract or contracts with thousands, or it may be millions of other persons entirely unknown to him, appears to me with great respect alien to the law of contract. It may be so when all are members of one community such as a club, but I do not regard that as the ground of decision. In the present case there was no connexion between the multitude who entered for the pool, and they were widely scattered. I venture to put the matter thus: Could the winner of the pool have gone to any competitor, whose identity he happened to know, and who had failed to pay his twopence, and demand it ? Of course he could not have sued for it, as it would have been a gaming transaction. But would not a demand have been met, and rightly met, by the answer "I do not know you; my contract was to pay Murphy. It was to him I agreed to pay." If the transaction entered into by any one competitor is to be regarded as a betting contract with any other individual competitor, the accepted condition of a bet, that one party must win and the other lose, would not be satisfied, as both might win prizes or both lose their stakes. Similarly, if regarded as a contract with all the other competitors as a community, it is equally clear that some members of the community might not be losers but winners of prizes equally with the other party to the contract. The proposition that the competitors bet inter se is contrary to the dictum of Russell, L.J., in Ellesmere (Earl) v. Wallace, a case which does not appear to have been cited in Luncheon Club. There the stewards of the Jockey Club sued the defendant for the stakes payable by him in respect of his having nominated a horse to run in two races. The defendant pled that his contract with the club was void, in respect it was one by way of wagering and so struck at by the Gaming Act, 1845. It was held not to be, as the club did not stand to lose. But Russell, L.J., negatived the view that there was a multipartite wagering contract between the defendant and the other nominators. He said (at p. 52):

"The truth is that you cannot have more than two parties or two sides to a bet. You may have a multipartite agreement to contribute to a sweepstakes (which may be illegal as a lottery if the winner is determined by chance, but not if the winner is determined by skill), but you cannot have a multipartite agreement for a bet unless the numerous parties are divided into two sides, of which one wins or the other wins, according to whether an uncertain event does or does not happen."

The Luncheon Club case did not actually decide the question raised in the present case, but I feel myself bound to follow the dicta of the noble Lords who delivered opinions in it, and so am unable to hold that the contract between the pursuer and the defender was a betting contract in the ordinary acceptance of the term.

That, however, is not conclusive of the matter. That the pursuer and the other competitors were entering into gambling transactions cannot be gainsaid. The exact nature of these transactions may not be easy to define, but the nearest approach to a definition appears to me to be that suggested by Lord Blanesburgh as applicable to the pools in the Luncheon Club in the passage I have already quoted, that the pool was in the nature of a "highly developed sweepstake." If so, is the engagement between the pursuer and defender a sponsio ludicra according to Scots law ? The defender invited the pursuer to take part in such a competition, and the pursuer did so. There was nothing illegal in their doing so, as the transaction was saved from illegality by section 26 of the Betting and Lotteries Act, 1934, but, it is not unimportant to note, saved in words which refer to pool betting. It is not essential, however, that a transaction, in order to be a sponsio ludicra, should be a pactum illicitum. Betting in itself is not illegal, but is illegal only if carried on in certain ways and in certain places, but a betting transaction is a sponsio ludicra. But I do not consider that only bets or wagers of a simple nature fall to be regarded as sponsiones ludicrœ. The authorities were fully examined by this Division in the case of Robertson v. Balfour as recently as last year, and I do not propose to refer to them in detail. It is sufficient to say that in the passage quoted by the Lord Justice-Clerk from Lord Kames's Principles of Equity, the learned author does not limit the category of agreements of which the Court will not take cognisance to wagering contracts. He says (4th ed., p. 25):

"Many engagements of various sorts, the fruits of idleness, are too trifling, or too ludicrous, to merit the countenance of law,"

and he gives wagers merely as an example, and in Wordsworth v. Pettigrew the ground on which it was held that an action would not lie was that "Courts of justice were instituted to enforce the rights of parties arising from serious transactions." It is true that nearly all the older cases deal with bets or wagers, but that is probably because sweep-stakes were illegal under the statutes prohibiting lotteries. In one case, Christison v. M'Bride, in which the winner of a lottery sued for his prize, the Sheriff held the transaction to be a pactum illicitum, and on that ground dismissed the action. On appeal, the Court adhered, but Lord Young in his opinion indicated, I think, that he regarded the matter as a sponsio ludicra,although he does not use the term. The modern gambler need no longer be content with a simple wager or bet, but is offered a wide choice of seemingly attractive methods of winning a large sum at the risk of a small stake, and he may stake his money in a multitude of ways with or without the assistance of mechanical contrivances. In my view, the Court, in deciding whether or not any such transaction is a sponsio ludicra, should regard the matter on somewhat broad lines, and from a practical point of view, and the pool in this case can best be described in the words of Lord Buckmaster in the Luncheon Club case as "a common gambling transaction." The contract in this case was one to participate in such a transaction. The case is, in my opinion, entirely different from those in which a principal has employed an agent to enter into betting or gambling transactions on his behalf. There the element of gambling does not enter into the contract between principal and agent, and the principal may sue the agent and vice versa—Knight & Co. v. Stott; Thacker v. Hardy; Forget v. Ostigny . The contract here was with the organiser of the pool. It may be that he was acting as agent for undisclosed principals, but the pursuer contracted with him as a principal. In my view, therefore, the contract on which the pursuer's case is based was a contract to take part in a gambling transaction, albeit of a complicated nature, and that I regard as a sponsio ludicra, an action based on which the Court cannot entertain.

It was argued that the true view was that the defender was merely a stakeholder, and that, as the Court was not asked to decide any question as to who were the winners of the matches played, or who had, in fact, won the pool, the action could competently be entertained. The argument was based on the cases of Graham v. Pollok and Calder v. Stevens . In the former, the question before the Court arose as a sequel to a coursing meeting, but it did not involve any question of the contract entered into by the promoters. The dispute was between the owner of the winning dog and a person in whose name it was run, and involved between them a question of a contract of mandate or loan. Calder v. Stevens presents more difficulty, but, in my view, it is distinguishable. The owners of horses entered for a race, who had thus a community of interest, had each contributed an equal amount to provide a prize for the winner, and the stakes or entry moneys were lodged in the hands of the clerk of the course. There was no dispute as to who had won, and the Court treated the question as one of patrimonial interest. The clerk was nothing more than a stakeholder, whose sole duty it was to hand over the prize to the owner of the horse which through its merits or the skill of its rider had won the race. The circumstances were thus very different from the present, where the defender was carrying on the pool for profit, and, as I think, entered into an engagement with each individual participant which was of the nature of a gambling transaction. [After referring to another matter, his Lordship concluded]—

I am therefore of opinion that the first plea in law for the defender should be sustained. It may be that the refusal of the Court to entertain questions arising out of transactions which now engage the attention of a considerable part of the population may open the door to apparent injustice. The rule of law, however, is well settled, and I agree with Lord Robertson in Wilson v. Murphy that, although such transactions may be indulged in by a multitude of people, they remain transactions of no serious business character, and to decide questions arising directly out of them would be lending aid to the enforcement of engagements of a gambling nature.