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Walter Mitchell Vs. A.K. Tennent - Court Judgment

LegalCrystal Citation
SubjectContract
CourtKolkata
Decided On
Reported inAIR1925Cal1007,90Ind.Cas.59
AppellantWalter Mitchell
RespondentA.K. Tennent
Cases ReferredVishnu Ramchandra v. Ganesh Krishna Sathe A.I.R.
Excerpt:
- .....the parties in the sense that i have just indicated? it is this: that at the date when mitchell filed his suit the condition precedent to any obligation under the agreement attaching had not been fulfilled. the same result would follow if the claim were to be founded upon the consideration for the bills, or, in other words, if the suit was for the repayment of money lent. in either case, on the date when he filed the suit, mitchell had no present cause of action. it follows, therefore, that mitchell's suit is premature and must be dismissed with costs. the parties having agreed that the court should allocate the liability to pay costs as it deems fit, the costs must be allocated in this manner: mitchell must pay two-thirds and tennent one-third thereof, having regard to the fact that.....
Judgment:

Page, J.

1. By consent the evidence which has been adduced before me is to be treated as evidence in both suits subject to the extent to which the evidence or any part thereof may be relevant to particular issues in either of the two suits.

2. The matters in controversy arise out of a dispute relating to an alleged order given by Tennent to Mitchell to back a horse called 'Better Hope' at the Barrackpore Races on the 2nd April, 1923. I take Colonel Tennent's suit first.

3. The claim in this suit is to recover the sum of Rs. 9,000, being the balance of a sum which it is alleged was received by Mitchell as the proceeds of a bet made by Mitchell on behalf of Tennent, the residue Rs. 11,000, having been paid on the 4th April, 1923, by Mitchell to Tennent. There is an alternative claim to recover Rs. 20,000 under an alleged agreement set out in the plaint.

4. Now, in my opinion, the first claim in this suit is wholly misconceived. Neither in this country nor in England has the Legislature gone so far as to enact in express terms that betting transactions are illegal, but it is clear that both in India and in England the Legislature regards it as undesirable in the public interest that any assistance should be afforded by Courts of law to enforce obligations, which have been created in connection with betting or wagering transactions. In India it has expressly been enacted that 'agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made,' (Contract Act, Section 30.). Similar provisions obtain in England, but up till 1892 it was not deemed necessary on grounds of public policy in England to include within the ambit of the legislation relating to betting and wagering transactions in which a principal had instructed an agent to back a horse for him. Accordingly, it was held by a majority of the Court of Appeal in 1884, confirming the decision of Mr. Justice Hawkins, that where a principal had instructed an agent to make a bet for the principal, and the bet had been lost, although the agent who had in fact made the bet was not liable to a suit to recover the sum which he had staked, nevertheless, if the agent paid the bet which he had lost, he was entitled to recover from his principal the sum which he had paid on his behalf. Brett M.R., however, in a dissenting judgment, observed that 'the plaintiff's business although it may not be illegal, is directly objected to by the law, and the contracts made by him in his business cannot be enforced, it is a business of which the law ought not to take notice, and, therefore, the inconvenience and the loss which the plaintiff may suffer in his objectionable business form no ground for an action for revoking an authority which the principal ought not to have given,' Bead v. Anderson (1884) 13 Q.B.D. 779. Similarly in Bridgers v. Savage (1885) 15 Q.B.D. 363, the Court of Appeal decided that where a principal had instructed an agent to make a bet for him, and the agent had done so and had received the proceeds of the bet, the principal was entitled to recover from the agent the sum which he had received on the principal's behalf. Now, in 1892, an Act was passed' by which the Legislature enacted that in the circumstances that I have set out the agent would not be entitled to recover from the principal the moneys which he had paid to the bookmaker in respect of the bet which was lost. The Legislature must, I think, have been moved to pass the Gaming Act off 1892 because it was regarded that public opinion bad become more enlightened, and that the exigencies of public policy demanded that further restrictions should be placed upon the efficacy of wagering transactions. Now, although legislation has not been passed to overrule the converse proposition of law laid down in Bridgets v. Savage (1885) 15 Q.B.D. 363 the principle which underlies the legislation of 1892 must apply, in my opinion, as well to the one set of circumstances and to the other. If it is regarded as contrary to the public interest that the agent who has effected a bet, and has paid money to the bookmaker on behalf of his principal, should be entitled to reimbursement from the principal, I fail to see why it is not equally against public policy to permit the principal, where his agent has received the proceeds of a successful bet, to recover from the agent the sum which he has received. If and when it becomes necessary to determine that question, it must not be taken that I should hold without further argument that in this country a principal is entitled to recover the proceeds of a bet which has been received on his behalf by his agent. It seems to me that to permit him to do so would be to act in opposition to the dictates of public policy relating to betting transactions. It is unnecessary, however, finally to determine that question in this case, because no evidence has been adduced to prove that Mitchell backed 'Better Hope on behalf of Tennent' or otherwise, or at all, or that he received the proceeds of the bet. See also Cohen v. Kittel (1889) 22 Q.B.D. 680, Cheshire v. Vaughan Bros. (1920) 3 K.B. 240 and Maskell v. Hill (1921) 3 K.B. 157.

5. With respect to the alternative claim, if the plaintiff proves the agreement which he has alleged, his cause of action (if any) has not yet arisen. For these reasons, in my opinion, the suit by Tennent against Mitchell is misconceived, and must be dismissed with costs.

6. As regards the suit brought by Mitchell against Tennent different matters arise for consideration. The suit is brought to recover the amount due under four cheques drawn by Tennent in favour of Mitchell amounting in the aggregate to Rs. 11,000. The first cheque bears date 1st October 1921. It is drawn in favour of Mitchell by Tennent for Rs. 2,500; there are two similar cheques, dated 1st November and 1st December, and a fourth cheque dated 1st January for Rs. 3,500. The execution of these cheques is admitted, and the payment of Rs. 11,000, as the consideration for executing the same, is also admitted. In the alternative, Mitchell claims the like sum as being money lent and repayable upon demand, such demand having been made before the suit was filed.

7. Now, the first defence which is raised is that the cheques in suit are not cheques at all because, although they purport to have been executed on the 1st October, 1st November, 1st December, 1923, and 1st January 1924, respectively, in truth and in fact all of them were drawn by Tennent and delivered to Mitchell on the 4th April 1923. In my opinion, there is no substance in this contention. A cheque is defined in the Negotiable Instruments Act (XXVI of 1881, Section 6) as 'a bill of exchange drawn on a specified banker and not expressed to be payable otherwise than on demand.' In India a post-dated cheque is admissible in evidence although it bears a stamp representing duty payable in respect of a cheque, and not the ad valorem duty payable in respect of a bill of exchange: Ramen Chetty v. Mahomed Ghouse (1889) 16 Cal. 432, Motilal Shivlal v. Jagmohundas Vundravandas (1904) 6 Bom. L.R. 699. The cheques in suit are 'not expressed to be payable otherwise than on demand' and, in my opinion, such post-dated cheques are cheques, and after the due dates may be sued upon as cheques; The Royal Bank of Scotland v. Tottenham (1894) 2 Q.B. 715.

8. Now, since the documents are negotiable instruments, the execution of which and the consideration for which are admitted, it is not permissible, pursuant to the provisions of Section 92 of the Indian Evidence Act, to adduce oral evidence to contradict, or vary or alter the terms thereof. But under Section 92, proviso (3), it is provided that 'the existence of any separate oral agreement constituting a condition precedent to the attaching of any obligation under any such contract, grant or disposition of property may be proved.' Now, the true construction, in my opinion, to be placed upon, that proviso is that the provisions thereof are inapplicable in a case in which any obligation under the written contract has attached and that if the effect of the alleged contemporaneous oral agreement is merely to suspend the performance of the obligations contained in the written contract evidence of such oral agreement cannot be admitted. On the other hand, it is permissible to adduce evidence of a contemporaneous oral agreement under which the parties to the written contract agreed that until the happening of a certain event no obligation whatever under the written agreement should attach, or, in other words, that until the condition precedent has been fulfilled, the written agreement should be and remain inoperative and of no effect: Jugtanund Misser v. Nerghan Singh (1880) 6 Cal. 433, Cohen v. The Bank of Bengal (1880) 2 All. 598, Ramjibun v. Oghore Nath Chatterjee (1897) 25 Cal. 401, Vishnu Ramchandra v. Ganesh Krishna Sathe A.I.R. 1921 Bom. 449.

9. Now, the question of fact which I have to determine in this suit is whether Tenant has proved to my satisfaction a separate agreement which amounts to a condition precedent within the meaning of proviso (3) of Section 92 of the Evidence Act.

10. [His Lordship then discussed the facts and evidence relating to the agreement and holding the agreement to be proved, proceeded].

11. The effect of that agreement was not to contradict or to vary the terms of the four cheques, but to create a condition precedent to the attachment of any obligation under the four cheques, which would remain inoperative until after the adjudication had taken place. In my opinion, such an agreement comes within the terms of proviso (3) of Section 92 of the Indian Evidence Act. Now, what is the effect of finding, as I do, that an agreement was effected between the parties in the sense that I have just indicated? It is this: that at the date when Mitchell filed his suit the condition precedent to any obligation under the agreement attaching had not been fulfilled. The same result would follow if the claim were to be founded upon the consideration for the bills, or, in other words, if the suit was for the repayment of money lent. In either case, on the date when he filed the suit, Mitchell had no present cause of action. It follows, therefore, that Mitchell's suit is premature and must be dismissed with costs. The parties having agreed that the Court should allocate the liability to pay costs as it deems fit, the costs must be allocated in this manner: Mitchell must pay two-thirds and Tennent one-third thereof, having regard to the fact that Mitchell has lost on what, I think, is the main issue in this case, viz., as to whether there was an agreement within proviso (3) of Section 92 of the Indian Evidence Act.


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