055-NLR-NLR-V-43-BARTLEET-AND-COMPANY-v.-ISMAIL-LEBBE-MARIKAR-EBRAHIM-LEBBE-MARIKAR.pdf
Delivered by LORD ATKIN—Bartleet & Co. v. I. L. M. Ebrahim Lebbe Marikar 223
[In the Privy Council.]
1941 Present: Lord Atkin, Lord Thankerton, Lord Romer, Sir George .Rankin, and Sir Sidney Abrahams.
BARTLEET AND COMPANY v. ISMAIL LEBBEMARIKAR EBRAHIM LEBBE MARIKARPrivy Council Appeal No. 93 of 1939.
Wagering transaction—Documents show an ordinary commercial transaction—one "party only benefits by commission—Inference of bet rebutted.
Where, on a question whether a transaction between parties is awagering transaction, the documents show an ordinary commercialtransaction and in conformity with them one of the parties incurs personalobligations on a genuine transaction with third parties so that he himselfis not a winner or loser by the alteration of the price but can only benefitby his commission.
Held, that the inference that the transaction is a betting transactionis effectively destroyed.
PPEAL from a judgment of the Supreme Court.
December 5, 1941. (Delivered by Lord Atkin) .—
This is an appeal from the Supreme Court of Ceylon (Poyser andWijeyewardene JJ.), who affirmed a decree of the District Judge ofColombo in favour of the plaintiffs in an action on a mortgage bond.The defence was that the sum mentioned in the bond was an amountdue as the result of wagering transactions on the price of rubber. Therehas been no dispute at any time in the present action that in accordancewith the law of Ceylon as decided in the Supreme Court in Tarrant v.Marikar' such a plea if established would be a valid defence. Theonly question in the case is one of fact, whether the transactions be-tween the parties were wagering transactions, in other words, were bets.Both Courts decided this issue in favour of" the plaintiffs in judgments-which fully discuss the facts, and it is only necessary shortly to state thecircumstances which gave rise to the action.
The defendant is a grower of rubber in Ceylon : the plaintiffs are along-established firm of share and produce brokers, members of theColombo Brokers’ Association and of the Colombo Rubber Traders’Association."' The defendant alleges that in May, 1929, it was arrangedbetween him and one Perera, who at the time was a Ceylonese broker
1 11934) 36 N. L. R. 145.
226 Delivered by LORD ATKIN—Bartleet & Co. v. 1. L. M. Ebrahim Lebbe Marifcor
employed by the plaintiffs’ firm, “ that Perera should buy rubberfor him on the London market. ”“ There was to be lio delivery ….
the arrangement was that I should pay the differences when the marketwas against me and that I should be paid the differences when the marketwas in my favour.” Mr. Parsons, the senior partner of the firm, deniedthat he had ever entered into any such bargain. Perera, who at thehearing of the case had left the plaintiffs’ employment, was not called.
The evidence showed that on May 15, 1929, the defendant wrote to theplaintiffs the following letter : —
E. L. Ebrahim Lebbe Marikar.
Phone No. 1438.
9, Gas Works Street,
Colombo, 15th May, 1929.
Messrs. Bartleet & Co.,
Colombo.
Dear Sir,
As arranged please buy 700 (seven hundred) tons Rubber on LondonJune-December, 1929, at the rate of 100 (one hundred) tons each monthat the current market rate and also I allow you to have the sellingas well.
Yours faithfully,
E. L. EBRAHIM LEBBE MARIKAR.
(Signed)
The plaintiffs carried out these instructions by cabling to their Londonagents, George White, Yuille & Co., Ltd., “ Please buy for our accountdelivery in equal monthly lots 700 tons June-December delivery thisyear”. Yuille & Co. carried out these instructions, and as the rubberwas bought sent. contracts to the plaintiffs, of which the following is asample : —
Geo. White, Yuille & Co., Ltd.,
3, Mincing Lane, E.C. 3.
2079
Messrs. Bartleet & Co.
Bought Delivery Contract.
London and/or Liverpool.
London, May 15th, 1929.
We have this day bought by your Order and for your accountupon the terms of this Contract, including the Rules endorsed hereonand the Regulations and Bye-laws of the Rubber Trade Association ofLondon, of our Principals, whose solvency we guarantee :
Seventy-five (75) tons Plantation Rubber.
in cases, @ Elevenpence seven-eighths (11 7/8d.) per lb.t Standard Quality Hevea Brasiliensis, Ribbed Smoked Sheets.To be ready for delivery in Warehouse in London and/or Liverpool,any time or timeSj at Seller’s option, during the month of June, 1929.
(File)
Delivered by LORD ATKIN—Bartteet & Co. v. I. L. M. Ebrahim Lebbe Marikar. 227.
Any dispute arising out of this contract shall be settled by Arbitrationin London, according to the Regulations and Bye-laws of. the RubberTrade Association of London. This Contract shall be construedaccording to the laws of England, whatever be the residence or nation-ality of the parties, and its performance shall, in every part and incident,be considered due in England for the purpose of jurisdiction, and theCourts of England or arbitrators in England, as the case may be, shallhave’conclusive jurisdiction over all disputes which may arise underthis Contract, and their decisions shall be enforceable as final judg-ments in any British Colony or Dependency or Foreign Country.
Brokerage Nil per cent.
For and on behalf ofGEO. WHITE YUILLE & Co., Ltd.,
(Signed) A. H. Hamilton, Director,
Brokers.
Members of the Rubber Trade-Association of London.
It was in evidence that to buy in London it was necessary for theCeylon broker to pledge his credit, as the London brokers were – notinterested in the Ceylon broker’s client, the foreign principal. Theplaintiffs duly reported the transactions to the defendant by a series ofcontracts, of which the following is a sample : —
Bartleet & Co.
Rubber Contract.
Contract No. 1158/29.
Colombo, lGtn May, 1929.
E. L. Ebrahim Lebbe Marikar, Esq.,
Colombo.
We have this day bought by your order and for your account fromourselves (300) Three hundred tons Plantation Rubber, in cases, atIs. §d. per lb. Standard quality.
To be ready for delivery in Warehouse in London and/or Liverpoolany time or times, at Seller’s option, during the months of October/November/December, 1929.
22/11 Oct. Dry 100 tons.
Nov.100 ”
Dec.100 ”
This Contract is made under ant£_aibject to the Constitution, Bye-Laws and Rules of the Rubber Trade Association of London, and isfurther subject to the Conditions endorsed on the back hereof; and
228 Delivered by LORD ATKIN—Bartleet & Co. v. I. L. M. Ebrahim Lebbe Marikar.
any dispute arising out of this Contract shall be settled by Arbitration.
in accordance with the aforesaid Rules.
Five cent Stamp.
Brokerage £ per cent.
BARTLEET & CO.,
Ceylon
(Copied) (Signed) <o
Brokers.
When the due date arrived for the various purchases, in accordancewith the practice, as no instructions for taking delivery were given, therubber was sold by Yuille & Co. The plaintiffs became liable to Yuille& Co. for the difference which in every case they remitted by telegraphictransfer. They rendered monthly accounts to the defendant showingthe amount of the differences and debiting the defendant as well withthe cost of cables and with their buying and selling commissions of and§ per cent., respectively. They also charged interest at 9 per ■cent,on the amount which they had themselves paid London, from the time ofpayment. These accounts were paid by the defendant until the twofinal accounts for November and December deliveries, which amountedto the sum for which the defendant eventually gave the bond in question.On these facts it is hardly surprising that the District Judge disbelievedthe defendant’s story that his arrangement with Perera was a bet. The-essence of a bet is that both parties agree that they will pay and receiverespectively on the happening of an event in which they have no materialinterest. The transaction may be cloaked behind the forms of genuinecommercial transactions : but to establish the bet it is necessary to provethat the documents are but a cloak and that neither party intended themto have any effective legal operation. Where the documents show anordinary commercial transaction, and in conformity with them one ofthe parties incurs personal obligations on a genuine transaction with thirdparties so that he himself is not a winner or loser by the alteration ofprice, but can only benefit by his commission, the inference of bettingis irresistibly destroyed. In such cases the fact that no delivery isrequired or tendered is of practically no value. It is a circumstanceaffecting in former days many speculative accounts on the Stock Exchange,London: and since the decision in Thacker v. Hardy 1 it has been quiteclear that, an ordinary speculation conducted on the Stock Exchangethrough a broker who makes himself by the rules personally liable to the•other members of the Stock Exchange for the performance of the contractcannot be a bet. All the judges in Ceylon correctly directed them-selves on the law, citing in the Supreme Court one of the latestdecisions, that of Hilbery J. in Woodward & Co. v. Wolfe',, a case ofspeculation in cotton futures through brokers, members of the LiverpoolCotton Association. The position therefore is that on a pure questionof fact there are concurrent findings by both courts in Ceylon in favourof the plaintiffs. In accordance 'with their Lordships’ rule of practicethey will not interfere with the decision below on that ground alone,
2 (1936) 3 A. E. R. 529.
(1879) 4 Q. B. D. 685.
WIJEYEWARDENE J.—Ameer Noor Amith v. Major Kumaranayagam. 229
though as appears from what has been said above it is difficult to seehow any other decision could be recorded.
Their Lordships will humbly advise His Majesty that this appeal bedismissed. The appellant must pay the costs of the appeal.
Appeal dismissed.