CH. XX. s. 5. passenger that not only their own trains, but the trains of other Contracts companies will run in conformity therewith (m), though the mere granting of a railway ticket imposes no duty on the company to have a train ready to start at a definite time (n). through Advertise ment. Announcement of auction. Offer for sale by tender. Announce ment of exa mination for scholarship. Offer of reward. On the same principle, an advertisement that an auction will be held at a particular time and place without reserve, constitutes a contract between the advertiser and the highest bidder that the goods advertised for sale shall be sold to him (0), though an advertisement of an auction not expressed to be without reserve has no similar effect, nor does it make the advertiser liable to recoup intending purchasers their expenses of attending the place named for the expected sale (p). An advertised offer of goods for sale by tender does not amount to a contract to sell to the person making the highest tender (q). An announcement that an examination for a scholarship will be held does not imply a condition that the scholarship will be given to the competitor obtaining the highest marks, although the trust deed under which the scholarship was established so provides, so that no contract is created on which the successful competitor can sue the trustees (r). The offer of a reward to any person giving such information as shall lead to the conviction of an offender, or the discovery of lost property, is a contract to pay the reward to the first person, and the first person only (s), who shall give such information (t). The motive of such person is immaterial (u), and a constable, notwithstanding his public duty in the matter, is not disentitled as such from claiming the reward (r), even though the offender may confess after information given (y), though if the offender voluntarily surrender, the case is different, and the constable cannot claim the reward (2). If A. inform B. and B. inform C. the advertiser, and obtain the reward from him, A. cannot recover the reward from B (a). For the reward to be recoverable, the information must be given to the advertiser or his agent or some person having authority to apprehend the offender (b). (m) Denton v. Great Northern Rail. Co. (1856), 5 E. & B. 860. (n) Hurst v. Great Western Rail. Co. (1865), 34 L. J., C. P. 264; and see p. 444, ante. (0) Warlow v. Harrison (1858), 1 E. & E. 295. (p) Harris v. Nickerson (1873), L. R., 8 Q. B. 286. (g) Spencer v. Harding (1870), L. R., 5 C. P. 561. (r) Rooke v. Dawson, [1895] 1 Ch. 480, per Chitty, J., observing that the action could not proceed without the sanction of the Charity Commissioners. (s) Lancaster v. Walsh (1838), 4 M. & W. 16. (t) Williams v. Carwardine (1833), 4 B. & Ad. 621. (u) Williams v. Carwardine, supra. (x) England v. Davidson (1840), 11 A. & E. 836. (y) Smith v. Moore (1845), 1 C. B. 438. (z) Bent v. Wakefield Bank (1878), 4 C. P. D. 1, per Grove, J., on further consideration. (a) Fallick v. Barber (1813), 1 M. & S. 108. (b) Lockhart v. Barnard (1845), 14 M. & W. 674. ment. The advertisement of a reward for the return of stolen goods CH. XX. s. 5. or which states that no questions will be asked, is made illegal Advertiseby the Larceny Act, 1861 (d), which imposes a penalty of 50l., recoverable by penal action, for every such offence; and it is con- questions ceived that the reward promised in such an advertisement would be asked. irrecoverable. Of reward no 100%. to any person using on its failing. An advertised offer to pay 100l. to any person using a specific Offer to pay preventive medicine in a specified manner for a specified period and finding it to fail, binds the advertiser to pay the 100l. to any a specific person buying the medicine on the faith of the advertisement and using it as specified but contracting disease notwithstanding. So it was held by the Court of Appeal in the very curious case of Carlill v. Carbolic Smoke Ball Co. (e), in which the defendants Carlill v. Carhad advertised that they would pay 100l. reward to any person Ball Co. should they contract "the increasing epidemic, influenza, colds, or any disease caused by taking cold," after having used the smoke ball of the defendants "three times daily for two weeks, according to the printed directions supplied with each ball," and adding that 1,000l. was deposited with a bank, "showing their sincerity in the matter." bolic Smoke information as Advertisements offering a reward for information leading to the Reward for discovery and conviction of the authors of charges made in a peti- to matter of tion for divorce constitute a contempt of court (ƒ); but a bona fide pending suit. attempt to procure evidence by advertising a reward for it is lawful if not so worded as to prejudice one of the parties (g). SECT. 6.-Stock Exchange Contracts. [See Melsheimer and Laurence on the Law and Customs of the Stock Exchange, 2nd ed., A.D. 1881; Stutfield on the Rules and Usages of the Stock Exchange, 2nd ed., A.D. 1893.] A party giving a stockbroker an order to buy or sell on a stock Stock Exchange exchange intends that his order shall be carried out according rules. to the general usages of that exchange (h), except so far as they are illegal (i) or wholly unreasonable (j). The greater part of the usages of the London Stock Exchange (k) is incorporated in 181 (d) 24 & 25 Vict. c. 96, s. 102. (e) Carlill v. Carbolic Smoke Ball Co., [1893] 1 Q. B. 256, C. A. (f) Brodribb v. Brodribb (1886), 11 P. D. 66. (g) Plating Co. v. Farquharson (1881), 17 Ch. D. 49, C. A.; Butler v. Butler (1888), 13 P. D. 73; disapproving Pool v. Sacheverel (1720), 1 P. Wms. 675. As to discontinuance of Government offers of reward, see Wharton's Law (h) Grissell v. Bristowe (1868), L. R., (i) Neilson v. James (1882), 9 Q. B. D. 546, C. A. (j) Melsheimer, p. 36; Stutfield, p. 28. () There are also Stock Exchanges at Liverpool, Manchester, Birmingham, and other large towns. CH. XX. s. 6. rules, which are frequently, though not materially, being revised. By Rule 52, which repeats a rule of very long standing :— Stock Exchange Contracts. Legal proceedings. Arbitration. No private dealing with member of firm. No specula tive business with clerks. Offer to buy or sell. Responsibility of seller for documents and dividends. Quotations of prices. The Stock Exchange does not recognise in its dealings any other parties than its own members; every bargain, therefore, whether for account of the member effecting it, or for account of a principal, must be fulfilled according to the rules, regulations, and usages of the Stock Exchange. The following Rules now (June, 1896) in force may also be found useful: 54. No member shall attempt to enforce by law arising out of Stock Exchange transactions, against a member or defaulter or against the principal of a member or defaulter, without the consent of such member, of the creditors of the defaulter, or of the Committee. The Committee have power to interfere in cases where the principal of a member shall attempt to enforce by law a claim which is not in accordance with the rules, regulations, and usages of the Stock Exchange, and will deal with such cases as the circumstances may require. 55. If a non-member shall make any complaint against a member, the Committee shall in the first place consider whether the complaint is fitting for their adjudication, and in the event of the Committee deciding in the affirmative, the non-member shall, previously to the case being heard by the Committee, sign a consent in writing as follows (k) : : * 56. If a member shall do a private bargain, either for money or time, with an individual member of a firm on the Stock Exchange, such bargain being concealed from the firm, both members shall be expelled. 58. The Committee particularly caution members against transacting speculative business, directly or indirectly, for or with officials or clerks in public or private establishments, without the knowledge of their employers. Members disregarding this caution are liable to be dealt with in such manner as the Committee may deem advisable. 91. An offer to buy or sell an amount of shares or stock at a price named is binding as to any part thereof that may be a marketable quantity; and an offer to buy or sell shares or stock when no amount is named, is binding to the amount of 1,000l. stock, or the amount of fifty shares. If, however, the market value of the shares is above 15l. each, then an offer is binding only to the extent of ten shares, and if the market value is not over 17. each, then an offer is binding to the extent of 100 shares. 92. The seller of shares or stock is responsible for the genuineness and regularity of all documents delivered, and for such dividends as may be received until reasonable time has been allowed to the transferee to execute and duly lodge such documents for verification and registration. When an official certificate of registration of such shares or stock has been issued, the Committee will not (unless bad faith is alleged against the seller) take cognisance of any subsequent dispute as to title, until the legal issue has been decided, the reasonable expenses of which legal proceedings shall be borne by the seller (1). 143. The prices of all bargains may be quoted in the Official List, but no (k) The consent is to be bound by the reference, and to carry into effect the award in the same manner as if the nonmember were a member of the Stock Exchange, &c. (1) Held reasonable in Smith v. Reynolds (1892) 66 L. T. 808. price shall be inserted unless the bargain shall have been made in the Stock CH. XX. s. 6. Exchange between members at the market price; nor on the authority of one of them if he refuse, when required by a member of the Committee, to give up the name of the member with whom he has dealt. Stock Exchange Contracts. 147. Bargains in transferable shares or stock shall be quoted ex interest Quotation from the beginning of the Account in which the interest may become payable; ex div. &c. and ex dividend from the beginning of the Account following that in which the dividend may have been declared, provided the dividend be made payable to the holders then registered; but in case of a subsequent shutting of a company's books for payment of the dividend, then, from the beginning of the Account following that in which such shutting occurs. Bargains in securities to bearer shall be quoted ex dividend on the day when the dividend is payable. Shares in foreign railways shall, when practicable, be quoted ex dividend, or ex interest at a period in accordance with the practice of foreign bourses. Stock It is matter of common knowledge that a very large number of How far Stock Exchange contracts-probably the majority of them-are Exchange speculative in the sense that the parties thereto, so far from contracts void as wagering. intending to carry them out, intend to replace them and receive or hacker v. pay the "differences" between the prices at which the original Hardy. contracts and the prices at which the replacing contracts are made. The question, therefore, whether and to what extent such contracts are void by virtue of the Gaming Act, 1845, 8 & 9 Vict. c. 109, s. 18, whereby "all contracts by way of gaming or wagering shall be null and void," has frequently arisen. The law appears to be that it is only where such contracts are between two principals, that they can be void (m); but that where, as in the vast majority of cases, they are the first links only in chains of contracts the statute does not apply, and they are good (n). So that where a broker, to his knowledge speculating for his principal, contracts for him with members of the Stock Exchange so as to become personally liable to them by virtue of the Stock Exchange Rules, the principal must both pay commission to the broker and indemnify him against his liability to such members (o). numbered By Leeman's Act, 30 & 31 Vict. c. 29, the sale of bank shares Sale of ununnumbered is null and void. This statute is disregarded on bank shares the London Stock Exchange (p); but as was held by the Court of contrary to statute void Appeal in a case arising out of a transaction on the Bristol Stock for illegality. Exchange, a custom to disregard the statute is unreasonable and (m) See per Bramwell, L. J. in Thacker v. Hardy, infra, distinguishing Grizewood v. Blane (1851), 11 C. B. 526. As to recovery of "cover" on void contract, see p. 596, post. (n) Thacker v. Hardy (1878), 4 Q. B. D. 685, C. A. ; and see Forget v. Ostigny, a Canadian case, [1895] A. C. 318, where actual contracts by a broker, completed by delivery and payment on behalf of a principal whose object was not invest- (0) Thacker v. Hardy, supra. Stock Exchange Contracts. Unnumbered contd. Broker's commission. CH. XX. s. 6. illegal, and a purchaser can repudiate a contract made in contravention of it, with the effect that the seller continues saddled with all liabilities attaching to the shares in respect of unpaid calls (q), but may sue the broker for damages resulting from the repudiation (r), bank shares- unless he had knowledge of the custom of the Stock Exchange to disregard the Act (s), or the transaction be a wagering one (t). In most of the local Stock Exchanges the amount of the broker's commission is regulated by a fixed tariff, but in London the charge varies slightly among different brokers. It is usually one-eighth per cent. on British and foreign funds; one-quarter per cent. on American and Colonial Securities; on railway and other registered stocks one-half per cent. on the consideration-money; while on shares it is usually on a scale from one shilling or less per share on shares under 5l., up to ten shillings per cent. on the considerationmoney where the shares are above 50l. (u). Stamp on contract note. Broker's discretion. Brokers' advice. Rigging the As we have seen (ante, p. 146), the stamp duty on the broker's contract note is one shilling if the value of the stock, &c. sold be 100l. or upwards, and one penny if it be less than 100l., and the shilling duty may be added to the charge for brokerage. There is clearly no duty cast upon a broker to accept every order that may be sent to him (r), but it has been said to be "customarily understood that an order given to a broker authorises him to execute any portion of it, whether it be to that extent only or finds himself unable to execute the rest." It is submitted, however, that no such implied authority is given by the common order to buy or sell, and that a broker cannot split an order, but must either execute it wholly or not at all. The still wider discretion which is more frequently exercised by brokers at the express request of their principals to buy or sell without limit must of course be expressly authorised. It is very common for brokers to advise their principals as to what securities they shall buy and sell and when. It is submitted to be clear that such advice is purely gratuitous, and that the commission is earned merely by executing specific orders. An agreement between two or more persons to purchase shares in a company in order to induce possible future purchasers to believe, contrary to the fact, that there is a bona fide market for the shares, and that the shares are at a premium, is illegal, and may be (q) Perry v. Barnett (1885), 15 Q. B. D. 388, C. A. (r) Neilson v. James (1882), 9 Q. B. D. 546, C. A. (8) So held by Mathew, J., on the authority of Read v. Anderson (1884), 13 Q. B. D. 779, C. A., set aside as to wagering contracts by the Gaming Act, 1892. (t) See Gaming Act, 1892, post, Ch. XXI. s. 5, p. 597. As to necessity of buyer's repudiation being unambiguous, see Loring v. Davis (1886), 32 Ch. D. 625. (u) Melsheimer & Laurence, p. 56. (v) Id. p. 39. |