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A person who induces another to act on a Wilful Misrepresentation
is estopped from denying its truth.

FEEEMAN v. COOKE. [1848]
(18 L. J. Ex. 1 14 ; 2 Ex. 654 ; 12 Jur. 777.)

William Broadbent, being in expectation of an execution
issuing against himself, removed his goods to the house of his
brother, Benjamin Broadbent. "When the sheriff's officer
entered the house of Benjamin Br >adbent, William Broadbent
(apparently supposing he had a writ against himself) gave him
notice not to seize the goods, as they were the property of
Benjamin. The officer produced Ins writ, which was against
Benjamin. Then William Broadbent said the goods belonged to
another brother, and finally that they belonged to himself. The
officer seized and sold them as the goods of Benjamin before the
bankruptcy of William Broadbent.

In an action in trover by the assignees of William Broadbent,
who had been made bankrupt —

Ili'ld. th" bankrupt was estopped from denying the truth
of the representation, for where a person wilfully makes a
representation intended to induce another to act upon the
faith <>f it, or where [whatever be his intention) a reasonable
man in the situation of Unit other would believe that if was
meant that he should act upon it as true and niter* his
position, there is an estoppel in pais to conclude the former
from averring against tin 1 latter a different state of things
os existing at the some time ; and conduct by negligence or
omission, where then is a duty cast upon tin- person to dis-
close the I rulli, may often hove the same effect. But unless



REALITY OF CONSENT. 79

the statement tvas intended to induce the other to act on the
faith of it, or was such thai a reasonable person ivould act
on the faith of it, there is no estoppel, although the other
did in fact believe the statement, and, was in fact induced to
alter his position accordingly.



In action for Fraud it is necessary to show that Deceit did actually

deceive.

AHKWEIGHT v. NEWBOLD. [1881]
(50 L. J. Ch. .'372 ; 17 Ch. D. 301 ; 44 L. T. 393 ; 29 W. R. 455.)

The prospectus issued by the promoters of a projected com-
pany stated that the purchase-money to be paid to the vendors
was 32,000/. (of which 15,000/. was to be paid in fully-paid
shares), and that "' the remuneration of the directors will be paid
by the shareholders, and it is proposed that they should be paid
only by a commission on the profits made, no promotion money
whatever being paid to them by the company, and all formation
expenses being paid by the vendors." The vendors of the
business, who became directors, received part payment in shares
and transferred 800 of these shares (being of the nominal value
of 4,000/.) to the directors others than the vendors. The
factor which decided the plaintiff to take shares was seeing
the name of Mr. Grrimes in the prospectus, for he had great
faith in that gentleman's astuteness and th >ught he would know
if it was a profitable concern.

Held, the prosper lux dia not contain any misstatement on
which an action for deceit could be, grounded. In order to
maintain an action for fraud it is necessary to prove that
the plaintiff was actually deceived by the deceit, and this
was not so in the present case, as the inducement Jor the
plaintiff to become a shareholder was his faith in the shrewd-
ness of Mr. Gnmes, who was one of the directors.



80 CONTRACT.

Court will not give Relief under the Moneylenders Act, 1900, on
the Ground that the Contract is "harsh and unconscionable/'
merely because the Interest is high.

CAKRINGTONS, LTD. v. SMITH. [1906]

(75 L. -T. K. B. 49; (1906) 1 K. B. 79; 93 L. T. 779: 54 W. R. 124;

22 T. L. R. 109.)

The defendant was a director of a publishing company, by
which, together with salary and commission, he was paid 1,000/.
per annum. The furniture in his house was worth about 3,000/.,
and he had pictures which he estimated as being worth 6,000/.
The defendant being temporarily in need of some ready money,
got tlit- plaintiffs to advance him 10' 7., and gave them a promissory
note for 150/., payable by twelve monthly instalments of 12/. 10s.
each. The promissory note contained a clause that on default
in payment of any instalment the whole was to become due.
The defendant paid seven of these instalments, and default
having been made in the payment of an instalment the plaintiffs
sued for the balance of 62/. 10-s. The defendant claimed relief
under the Moneylenders Act, 1900.

Held, such a transaction was not harsh and unconscionable
so as to entitle the defendant to relief. The Court, when
asked to reopen a mon^y lending transaction under sect. 10
of the Moneylenders Act, 1900, on the ground of excessive
interest charged by the lender, is entitled to consider amongst
- all the circumstances" the fact that the borrower thoroughly
understood the transaction, and without any representation
or pressure, other than the mere request I" pay so much
interest, voluntarily agreed to pay it ; and when the Court
finds these to be the facts it ought to hdd that the interest
which the borrower agreed to pay is reasonable and not
excessive within the meaning of the Act.

In considering the "risk" incurred by the moneylender



LEGALITY OF OBJECT. 81

in making an advance, it is not the real risk as ascertained
after the event which has to be looked at, but how the matter
presented itself to the moneylender at the time he made the
advance, with the experience he ivould have of borrowers.



LEGALITY OF OBJECT.

Contracts contrary to Public Policy are void.

EGEETON v. BROWNLOW. [1853]
(23 L. J. Ch. 348 ; 4 H. L. C. 1 ; 1 Sim. (N. S.) 464 ; 18 Jur. 71.)

The seventh Earl of Bridgewater left by will certain estates
to Lord Alford, with the proviso that if Lord Alford died with-
out having acquired the title of Duke or Marquis of Bridge-
water they should go over. Lord Alford never obtained either
title.

Held, that the estates went to the heir of Lord Alford,
as such a condition ivas void as being against public policy,
being " a direct and powerful temptation to the exercise
of corrupt means of obtaining the particular dignity" and
an inducement to obtain distinction for which the person
might be unworthy, and, further, it ivas a capricious con-
dition, tvhich the common laiv hates.



Simony is illegal by 31 Eliz. c. 6.
MOSSE v. KILLICK. [1881]
(50 L. J. Q. B. 300 ; 44 L. T. 149 ; 29 W. E. 522.)

The plaintiff, who was incumbent and patron of a living, put
the rectory into repair, and, with the sanction of the bishop of
the diocese, let it to a tenant for a certain period. Before the

J. Q



82 CONTRACT.

termination of the tenancy the plaintiff resigned the living and
presented the defendant thereto. The presentation was made
upon an understanding and agreement between the plaintiff
and the defendant that the defendant should, in consideration
of having received the benefit of the said repairs, hand over to
the plaintiff any rent which he should receive in respect of the
said tenancy between the date of the presentation and the
termination of the tenancy.

The presentation having been made, the defendant refused to
pay the amount of rent he had received from the tenant on the
ground that the agreement was simoniacal and therefore void.

Held, this was a simoniacal agreement, and the pre-
sentation was, therefore, void under -'il Eliz. c. 6.

Note. — 31 Eliz. c. 6, s. 5, for the avoiding of simony, directs that
the corrupt presentation shall be void, and the presentation shall go
to the Crown.



Money won by an Agent on behalf of his Principal in a Gaming
Transaction is recoverable by the Principal.

DE MATTOS v. BENJAMIN. [1894]
(63 L. J. Q. B. 248 ; 10 E. 103 ; 70 L. T. 500 ; 42 W. R. 284.)

In August, 1893, the plaintiff employed the defendant to
make bets for him as his agent. The agent was successful, and
there was a balance of over 15/. due to the plaintiff. This
amount, however, the defendant refused to part with on the
ground that the transaction was within the Gaming Act,
1892 (1), and 8 & 9 Vict. c. 109, and therefore no action could
be brought to recover the money.

Held, the operation of the Gaming Acts does not dis-
entitle a principal to recover from his agent the amount of
bets toon and received.



LEGALITY OF OBJECT. 83



Money in the hands of a Stakeholder can be recovered by the
Depositor before payment over.

BUEGE v. ASHLEY & SMITH, Ltd. [1900]

(69 L. J. Q. B. 538 ; (1900) 1 Q. B. 744 ; 82 L. T. 518 ;
48 W. E. 438.)

The plaintiff and Dobbs each deposited the sum of '300/. with
the proprietors of " The Sportsman " to abide the result of a
boxing match between the plaintiff and Dobbs. Dobbs won
the match, but the plaintiff gave the defendant notice not to
pay the stake over to Dobbs. The defendants took no heed of
this notice, but paid over the stakes to Dobbs. In an action to
recover the amount deposited by the plaintiff —

Held, the Gaming Act, 1892, tvhich provides that no
action shall be maintained to recover any sum of money
paid by any 'person under or in respect of any contract or
agreement rendered null and void by the Gaming Act,
1845 — that is, any contract or agreement, ivhether by parol
or in writing, by way of gaming or ivagering — does not
apply to a deposit of money with a stakeholder so as to
prevent the depositor maintaining an action against the
stakeholder for the recovery of a deposit ivhich he has
demanded back from the stakeholder before it ivas paid
over by him.



g2



84 CONTRACT.

Money Lent to make a Wager cannot be recovered.
CARNEY v. PLIMMEB. [1897]

(66 L. J. Q. B. 415 ; (1897) 1 Q. B. 634 ; 76 L. T. 374 ;
45 W. E. 385 ; 61 J. P. 324— C. A.)

The defendant, who had agreed to fight a boxing match with
a man named Corfield for stakes to be deposited with a stake-
holder by himself and Corfield, requested the plaintiff to lend him
the money for his stake. The plaintiff advanced the money,
which was to be repaid if the defendant won the match, but was
not to be repaid if he lost. The money was deposited with the
stakeholder. The defendant won the match and received the
stake, but refused to pay the plaintiff, who brought an action
to recover the money advanced as money lent.

Held, that the money was paid by the plaintiff in respect
of a contract rendered null and void by the Gaming Act,
1845 (8 fy 9 Vict. c. 109), ivithin the meaning of sect. 1 of
the Gaming Act, 1892, and the action could not be main-
tained.



Money paid in discharge of Gaming Debt of another is not recover-
able even though paid in ignorance of the purpose for which

paid.

TATHAM p. EEEVE. [1893]

(62 L. J. Q. B. 30 ; (1893) 1 Q. B. 44 ; 5 E. 83 ; 67 L. T. 683 ;
41 W. E. 174; 57 J. P. 118.)

The defendant asked the plaintiff to pay a certain account for
him, as he was in a hurry to get to Henley. The plaintiff paid
the amount (148/.) as requested. The money was to satisfy bets
lost by the defendant. An action was brought to recover the
amount.

Held, money paid to satisfy bets at the request of a third
party cannot be recovered, even though the person paying



LEGALITY OF OBJECT. 85

is ignorant of the purpose for which the money is paid.
It is money paid in respect of a wagering contract, and its
recovery is prohibited by the Gaming Act o/1892.



A Bill of Exchange given in payment of a Wager would be given
for no Consideration, and could not therefore be sued upon by
original holder ; but a subsequent holder could sue, as a Wager
is not illegal but void, unless the Acceptor could prove that
he gave no value for it.

FITCH v. JONES. [1855]

(24 L. J. Q. B. 293 ; 5 El. & Bl. 238 ; 1 Jur. (N. S.) 854 ;
3 W. E. 507.)

Mr. Needkam and the defendant having made a wager on
the hop duty, the defendant lost, and, in satisfaction of the debt,
made a promissory note in favour of Needkam payable two
months after date. Needham endorsed the note to Taylor, and
Taylor in his turn endorsed the note to the plaintiff. The
defendant refused to pay the note on the ground that it was
given in payment of a wager, and could not be sued upon.

Held, a promissory note given in payment of a wager
constitutes, as between the maker and payee, a mere nudum
pactum, which cannot be sued upon for ivant of considera-
tion. But there being a mere want of consideration in the
inception of the note under 8 6f 9 Vict. c. 107, and no ille-
gality and fraud, the onus is on the maker of the note to
show that the plaintiff took it without value, and as he coidd
not show that, the plaintiff succeeded.



86 CONTRACT.

Transactions to pay Differences where there is no intention to
purchase are Gaming Transactions and void, even though the
Contract contains an Option to Buy or Sell.

UNIVERSAL STOCK EXCHANGE, Ltd. v. STRACHAN. [1896]

(65 L. J. Q. B. 429 ; (1896) A. C. 166 ; 74 L. T. 468 ; 44 W. R.

497 ; 60 J. P. 468 ; 59 J. P. 789— C. A.)

The plaintiff (Strachan) was engaged in speculating in differ-
ences with the defendants, the Universal Stock Exchange, Ltd.,
who were stockjobbers. There never was any intention to pur-
chase the stocks, and none were in fact taken up. There was,
however, a term in the contract by which either party had the
option to compel the stocks to be delivered and received. The
plaintiff having omitted to deposit further cover at the request
of the defendants, the latter, before the usual account day, closed
the account, when it appeared that a balance was due to the
defendants in excess of the securities in their hands. The
plaintiff thereupon demanded the return of his securities, and
failing to obtain them, brought this action for their return, on the
ground that the transactions were transactions of gaming and
wagering, and thereupon null and void under sect. 18 of the
Gaming Act, 1845.

The jury found that the transactions were gaming transactions.

Held, the plaintiff was entitled to recover the securities.
Securities deposited by a customer as u cover" for any
balance which might, be found to be due from him to the
stockjobbers are not u deposited to abide the event on which
any wager should have been made " within the meaning of
that section., and the customer is not precluded from main-
taining an action for their recovery. The insertion of such
a provision in the contract as above referred to, though in-
serted by way of creating an obligation, being only to cloak
the fact that it was a gambling transaction that the parties



LEGALITY OF OBJECT. 87

were entering into, will not prevent the transaction from
being treated as a gaming transaction when, as in this case,
it is of that nature.

Agreements to stifle Criminal Proceedings are invalid where the
offence is of a Public Nature, but are valid where the offence
is of a Private Nature.

KEIR v. LEEMAN. [1846]
(15 L. J. Q. B. 360 ; 10 Jur. 742 ; 9 Q. B. 371.

The plaintiff, who was about to prosecute the defendant and
others for an assault and riot, promised to proceed no further
with the prosecution if the defendant paid him a certain sum of
money. The defendant agreed, and the plaintiff accordingly,
with the consent of the Court, offered no evidence at the trial.
The defendant, however, refused to pay the amount agreed, and
on being sued —

Held, the law will permit the compromise of offences,
although made the subject of criminal prosecution, for which
the injured 'party might sue and recover damages in an
action ; but no agreement can be valid which is founded upon
the consideration of stifling an offence of a public matter,
even though that offence {which was in this case riot) be
coupled with an offence not of a public nature (in this case
a common assault), and therefore the plaintiff ivas not
entitled to recover.



Champerty is illegal.

EEES v. DE BERNARDY. [1896]
(65 L. J. Ch. 656 ; (1896) 2 Ch. 437 ; 74 L. T. 585.)

The defendant, who was a next of kin agent, discovered that
two elderly women in humble life and illiterate were the



88 CONTRACT.

heiresses-at-law of a person who had died intestate in New
Zealand, entitled to property there to the value of some
thousands of pounds. The defendant insisted, as the only terms
on which he would tell them the particulars of the property and
recover it for them, that they should give him half the property
recovered.

Held, a contract to communicate information on terms of
getting a share of any property tvhich may be recovered by
the person to whom the information is given is not in itself
champerty ; but if the contract provides further that the
person who gives the information, and tvho is to share in
what may be recovered, shall himself recover the property
or actively assist in the recovery of it by procuring evidence
or similar means, then the contract is contrary to the policy
of the law and void. The contract, being one of champerty ,
was therefore void.



Marriage Brocage Contracts are illegal, and money paid there-
under is recoverable.

HEEMANN v. CHAELESWOETH. [1905]
(74 L. J. K. B. 620 ; (1905) 2 K. B. 123 ; 95 L. T. 284 ; 54 W. E,

22; 21 T. L. E. 368— C. A.)

The plaintiff entered into an agreement with the defendant
by which the defendant undertook to assist the plaintiff to get
married, and in pursuance of the agreement the plaintiff paid
to the defendant 52/., of which 47/. was to be returned in
nine months if no marriage or engagement took place within
that period. The defendant introduced the plaintiff to, and put
her in communication with, a number of gentlemen with a view
to marriage, but no marriage or engagement had resulted when,
before the expiration of the nine months, the plaintiff repudiated



LEGALITY OF OBJECT. 89

the contract and brought an action for the return of the money
paid.

Held, that the agreement was an illegal marriage brocage

contract, and that the plaintiff ivas entitled to recover the

money she had paid to the defendant in pursuance thereof,

as no part of the illegal purpose, which was the bringing

about of the marriage, had been carried out.



Agreements in Total Restraint of Marriage are not binding.

LOWE v. PEEES. [1768]

(4 Burr. 2225 ; Wilmot, 304.)

The defendant executed a deed to the following effect : "I
do hereby promise Mrs. Catherine Lowe that I will not marry
with any person besides herself ; if I do I agree to pay to the
said Catherine Lowe 1,000/. within three months next after I
shall marry anybody else."

The defendant proved unfaithful and married one Elizabeth
Gardiner. Thereupon the plaintiff brought this action.

Held, this was not a promise by the defendant to marry
the plaintiff, but to marry no one else but the plaintiff, so
that if the plaintiff refused him he could marry no one at
all. Such a promise ivas, therefore, in total restraint of
marriage, and not binding, as encouraging immorality and
tending to depopulation.



Agreements as to future Separation are bad, but as to present
Separation, are good.

CAETWEIGHT v. CAET WEIGHT. [1858]
(22 L. J. Ch. 841 ; 17 Jur. 584 ; 1 W. E. 245.)

A father, upon the marriage of his eon, settled real estate
upon the intended husband and wife. The settlement contained



90 CONTRACT.

a proviso that in case of a separation between husband and wife
by reason of any disagreement or otherwise, the interest given
to the wife should, during the joint lives of herself and her
husband, belong to him alone.

Held, that this proviso was in contemplation of a future
separation, and was therefore bad.

Note. — Agreements in contemplation of immediate separation
are valid.



Contracts in Restraint of Trade may be Partial or General, but
must be Reasonable, and in no way injurious to the Public.

NORDENFELT v. MAXIM-NORDENEELT GUN Co., Ltd.

[1894]
(63 L. J. Ch. 908; (1894) A. C. 535 ; 71 L. T. 489; 11 E, 1.)

The defendant Nordenfelt sold his business to the company
for a large sum of money and covenanted that for twenty-five
years he would not be concerned in the manufacture of guns,
explosives, &c, or in the carrying on of any business competing
or liable to compete with the business of the company. Such
restrictions were not, however, to apply to the manufacture of
torpedoes and other submarine objects. This action was brought
to enforce this covenant.

Held, the contract was enforceable and not contrary to
public jiolicy or ivider than tvas reason/ddg required lor I lie
protection of the jdaintiffs. The true test in all cases,
whether of partial or general restraint of trade, is whether
the restraint is reasonable, i.e., whether it affords adequate
protection to the party in tvhose favour it is imposed tvithout
being wider titan is reasonably necessary for his protection,
ivhile at the same time it is in no way injurious to the public.



LEGALITY OF OBJECT. 91

Where part of the Contract is illegal, the whole Contract is not
vitiated if that part be severable.

PICKERING v. THE ILFEACOMBE RAIL. CO. [1868]
(37 L.J. C. P. 118; L. R. 3 0. P. 235; 17 L. T. 650; 16 W. E. 458.)

The defendants in February, 1865, obtained judgment for
10,500/. against the Devon and Somerset Railway, which was
not satisfied at the date of this action. In June, 1866, the
Devon and Somerset Railway owed a sum of 40,000/. to the
plaintiffs, who were engaged on the construction of the line.
In order to meet the claims of the plaintiffs, the Devon and
Somerset Railway on the 11th June, 1866, made a call on their
shareholders of 5/. per share payable on or before the 16th July,
and assigned the result of these calls, by way of mortgage, as a
security for their debt to the plaintiffs. The mortgage deed
gave the mortgagees a power of sale. The question was whether
the mortgage was effective.

Held, that even if the power of sale was bad as being
ultra vires the Devon and Somerset Railway, yet that
potver can be separated from the rest of the deed, and should
not therefore be allowed to vitiate the useful part of the deed
by its presence, for the common law is like a nursing father,
which makes void only that which is bad and retains what
is good. The general rule is that where you cannot sever
the illegal from the legal part of a covenant, the contract is
altogether void, but where you can sever them, whether the
illegality be created by statute or by the common law, you
may reject the bad part and retain the good.

The power of sale, therefore, being separable from the rest
of the contract, the rest is good.



92 CONTRACT.

Security under seal for payments prohibited by Statute is void.

FISHER v. BRIDGES. [1854]

(24 L. J. Q. 13. 165 ; 3 E. & B. 642 ; 2 C. L. R. 928 ; 1 Jur. N. S.
157 ; 1 W. E. 350.)

The plaintiff sold to the defendant certain lands, as the jury
found, to the intent and for the purpose of its being sold by
the defendant by lottery. The defendant made a part payment
and covenanted by deed to pay the balance. On his refusal
to pay the balance this action was brought.

Held, the defendant was entitled to judgment, as the
original contract to sell the land for the purposes of a
lottery zvas void by 12 Geo. 2, c. 28, s. 4, and being
illegal could not be enforced. So, too, where a bond or other
instrument is connected with the illegal agreement it cannot
be enforced.

Held also, that there was no analogy between this action
and an action on a bond for past cohabitation, for that is
not an illegal consideration but no consideration at all,
and inasmuch as an instrument under seal is good without
consideratio?i, a bond for maintenance founded on past
cohabitation and previous seduction is good. But if an
agreement had been made to pay a sum of money in con-
sideration of future cohabitation, and after cohabitation the
money had been unpaid, and the bond given to secure that
money, Hint would be the same case as this, and such a
bond could not under such circumstances be enforced.

Vide Beaumont v. Reeve, infra, p. 94.



LEGALITY OF OBJECT. 93

The maxim " In pari delicto, potior est conditio possidentis," is
not affected by Innocent Misrepresentation of the Law by the
Possessor.

HARSE v. PEARL LIFE ASSURANCE CO. [1904]

(73 L. J. K. B. 373; (1904) 1 K. B. 558; 90 L. T. 245;
52 W. R. 457 ; 20 T. L. R. 264— C. A.)

The plaintiff effected a policy of insurance upon the life of
his mother in consequence of a statement made by the agent of
the defendants, without fraud, that the policy was a good one.
The plaintiff brought this action to recover back the premiums
paid under the policy on the ground that it was illegal and void.

Held, that, assuming that the policy was illegal and void
by reason of the plaintiff having no insurable interest in



Online LibraryPhilip Bertie PetridesStudent's cases : illustrative of all branches of the law → online text (page 9 of 29)