1934 Present: Garvin S.P.J and Akbar J.

TARRANT et al. v. MARIKAR.

340-D. C. Colombo, 43,262.

    Wagering contract-Contract for sale of rubber-Agreement to pay the difference between contract price and market price-Bond granted to secure payment of the amount of the difference-Contract unlawful under the Roman-Dutch law-Action on bond not maintainable-Injusta causa-Contract governed by Roman-Dutch law.

Where the plaintiffs and the defendant had entered into certain contracts for the sale and purchase of rubber on the understanding that there was to be no delivery of the rubber and that the contract was to be performed by the payment of the difference between the contract price and the market price, and where a bond was granted by the defendant to the plaintiffs at their request to secure the repayment of the amount of the differences which remained unpaid by the defendant on the contracts,-

Held, that the agreement was in the nature of a wagering contract which was unlawful under the Roman-Dutch law, and that no action was maintainable on the bond.

Under the Roman-Dutch law a promise to pay a wager secured by the hypothecation of immovable property is unenforceable as it is not based on a justa causa.

The question whether a wagering contract, though in form a contract for the sale of goods or a claim in respect therefrom, is enforceable by action must be determined with reference to the law of Ceylon.

THIS was an action on a mortgage bond No. 2,100 dated March 28, 1930, to recover from the defendant a sum of Rs. 101.462.63 with interest alleged to be money borrowed and received from the plaintiffs. The defendant admitted the execution of the bond but pleaded that it was given for an illegal consideration and was void and was unen forceable. It was specially pleaded that the defendant and the plaintiff had entered into certain contracts for the purchase and sale of rubber under an arrangement by which there was to be no delivery or acceptance of rubber and by which the contract was to be performed by the payment of the differences between the contract price and the market price and that the bond in suit was granted to the plaintiff to secure the payment of money due from the defendant on the contracts.

The learned District Judge held that the real transaction between the parties was as alleged by the defendant, and that the contract amounted to a wagering contract which was illegal and unenforceable at law. He accordingly dismissed the plaintiff's action.

Soertsz, K. C. (with him Garvin), for plaintiff, appellant.-This is a contract for the sale of rubber. It is not a wagering contract as there is want of mutuality between the parties to regard it as such, although the defendant may have had such intention. (25 Hals. $83, ss. 576-578; Thaker v. Hardy1[1(1878) 4 Q.B. D. 685.]; Carlill v. Carbolic Smoke Ball Co.2[2 (1892) L. R. 2 Q. B. 484, at 491.].)

[GARVIN J.-Though you had an intention of carrying out your contract, if you knew that the other party was speculating on the rise or fall of the market, are you not a party to a wagering contract ?]

No. There is no duty on plaintiff to refrain from entering into contract with a person who intends it to be a betting transaction. A wagering contract is a contract and here there is no consensus ad idem. Even if it is a wagering contract an action is maintainable in Ceylon.

[GARVIN J.-Is there any difference between English law and Roman-Dutch law ?]

At common law action is maintainable on wager if not contrary to public policy. The Gaming Act, 1345, declared that wager was unenforceable. The Statute declared what the public policy was. (Chitty on Contracts 786.)

In Roman-Dutch law the position is the same as in English law. Roman-Dutch Common law did not regard a wager as null and void. Action is maintainable on it (1932 A.D. 76; 3 Maas, 26). The District Judge relies on 2 Nathan 613, para 76