Rainbow Quest won the Prix de l'Arc de Triomphe thoroughbred horse race yesterday after favored defending champion Sagace, who finished ahead by a neck, was disqualified from first to second for bumping in the stretch.

Rainbow Quest became the first British winner since 1973 and earned $312,500. The two horses were battling during the final 300 yards, but Sagace, who was on the rail, moved to his left twice under pressure, bumping Rainbow Quest each time.

Sagace, ridden by Esric Legrix, crossed the wire first, but Rainbow Quest's jockey, Pat Eddery, objected that his mount had been bumped and the stewards reversed the placings. The loss ended Sagace's six-race winning streak and prevented the French colt from becoming the eighth two-time winner of the 66-year-old race.

Rainbow Quest, who was a well-backed third favorite, paid 7 to 1 to win. The field of 15 was the smallest since 14 competed in the 1970 Arc won by Sassafras . . .

Jockey Jerry Bailey spent a stable night at Long Island Jewish Hospital after a spill at Belmont Park Saturday, a hospital spokesman said. Bailey broke three ribs during the Fall Highweight Handicap.

First Guess, ridden by Robbie Davis, broke his right front leg with about a quarter-mile left in the race and fell. Charging Falls, ridden by Bailey, fell over First Guess, then Bailey was stepped on by Pancho Villa. First Guess was destroyed.