(253 U. S. 101) 160 C. C. A. 556. The case is here upon writ WESTERN UNION TELEGRAPH CO. v. of certiorari. BROWN et al. Upon stipulation the case was tried in the (Argued Jan. 20 and 21, 1920. Decided May 17, District Court without a jury, and the court A contract whereby the owners of stock agreed to sell, and the other parties agreed to buy, the stock for a price payable in installments, and which provided that the stock should be deposited in escrow until final payment, and that in case of default the stock might be returned to the sellers, and all payments thereto fore made should be forfeited to them, and the rights of each of the parties should cease and terminate, was a sale, and not an option terminable by the purchasers at will, as the provision for termination of the contract was for the benefit of the sellers, and hence the measure of damages for delay in delivery of a telegram stopping payment of a draft sent as a payment on the contract was not the amount of the draft. On Writ of Certiorari to the United States Circuit Court of Appeals for the Ninth Cir cuit. Action by George M. Brown, executor of William Lange, Jr., deceased, and another, against the Western Union Telegraph Company. A judgment for plaintiff was affirmed by the Circuit Court of Appeals (248 Fed. 656, 160 C. C. A. 556), and defendants bring certiorari, Reversed and remanded. See, also, 248 U. S. 552, 39 Sup. Ct. 8, 63 L. Ed. 418. *102 *Messrs. Beverly L. Hodghead, of San Francisco, Cal., and Rush Taggart and Francis Raymond Stark, both of New York City, for petitioner. made findings from which it appears: On March 16, 1907, W. C. Pitt and W. T. Camp bell entered into a contract with Hastings and Lange for the sale of 625,000 shares of the capital stock of the Kennedy Consolidated Gold Mining Company. In this contract it was stipulated that Pitt and Campbell agreed to sell and deliver to Hastings and Lange, who agreed to buy, take, and receive from them, 625,000 shares of the Kennedy Consolidated Gold Mining Company, upon the following terms and conditions: First. The total price to be paid for the shares of stock to be $75,000 in gold coin of the United States payable $7,500 on the execution of the agree ment; $11,250 on or before the 1st day of May, 1907; and the like sum on or before the 5th of July, 1907, the 5th of September, 1907, the 5th of November, 1907, the 5th of January, 1908, and the 5th of March, 1908. It was agreed that immediately upon payment of the first-named sum Pitt and Campbell would deposit in escrow in and with the Lyon County Bank, of Yerington, Nev., certificates of stock indorsed in blank representing in the aggregate 625,000 shares of the capital stock of the mining company, and would thereupon enter into an escrow agreement with Hastings and Lange and the bank, under which agreement the bank should hold the shares of stock to be delivered to Hastings and Lange upon the payment by them of the final sum provided for, and the bank was constituted the agent of Pitt and Campbell for the purpose of receiving the payments *105 *under the agreement, and it was further agreed that in event of default by Hastings and Lange the bank should be authorized, under the terms of such deposit in escrow, to deliver all the shares of stock so deposited with it to Pitt and Campbell, and all payments theretofore made by Hastings and Lange should be forfeited to Pitt and Campbell, and that thereupon all rights of each of the parties should forever cease and terminate. Hastings and Lange paid to Pitt and Campbell the initial sum of $7,500, and Pitt and Mr. Samuel Poorman, Jr., of Los Angeles, Campbell deposited in escrow with the Lyon Cal., for respondents. *103 *Mr. Justice DAY delivered the opinion of the Court. This is an action by Brown, executor of Lange, and Hastings to recover damages from *104 the Western Union *Telegraph Company for failure to deliver a message sent by Hastings and Lange to the Lyon County Bank, Yerington, Nev. A judgment was recovered against the telegraph company in the District Court, which was affirmed in the Circuit Court of Appeals for the Ninth Circuit. 248 Fed. 656, County Bank certificates of stock representing 625,000 shares of the stock of the mining company properly indorsed, and the bank received said certificates in escrow and held the same in accordance with the contract. After the execution of the contract Hastings and Lange arranged with the bank to treat drafts that they might send it in partial payment as gold coin, and to pay the amount of such drafts in gold coin to Pitt and Campbell under said contract; that for the purpose of making the payment mentioned in the contract which became due on or before May 1, 1907, Hastings and Lange on April 27, 1907, For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes (40 Sup.Ct.) sent by mail from Oakland, Cal., to the Lyon County Bank, at Yerington, Nev., a draft for the sum of $11,250 United States gold coin, payable to the order of the bank; that the draft was received by the bank at Yerington, Nev., on April 30, 1907, some time between 8:30 a. m., the time the bank opened for business, and 9 o'clock a. m. of that day; that on April 29, 1907, before the message hereinafter mentioned was delivered to the telegraph company, Hastings and Lange were informed and believed that the stock of the mining company was of little or no value, and upon obtaining such information they determined to make no further payments on their contract with Pitt and Campbell, and to abandon their rights in and to said stock, and to withdraw from the transaction with Hastings and Lange stated to the agent of the telegraph company that it was necessary that the message be delivered to the bank be fore banking hours on the following morning, that is, before it opened for business on the 30th day of April, 1907, and desired to know of the agent in what manner they could be absolutely assured that the message would be so delivered, stating to the agent that they had a contract for the purchase of certain shares of stock of a mining company, and that payment under the contract was required to be made by them on or before May 1, 1907, to Pitt and Campbell through the bank, and that in default thereof the contract to purchase the stock would by its terms be forfeited, and the rights of the parties there to would cease and terminate; that for the purpose of making the payment they had mailed to the bank a certain bank draft in the sum of $11,250; that in the ordinary course of the mail between the city of Oakland, Cal., and the town of Yerington, Nev., the same would be delivered to the bank on the following morning, that is to say, during the forenoon of April 30, 1907; that since mailing the draft they had learned facts touching the value of the stock which had de termined them to make no further payments and to forfeit the contract and all money by them paid thereunder; that they were seek #107 ing *by the message to intercept payment by the bank on account of the contract through said Pitt and Campbell; and that unless such message were transmitted, and delivered immediately to the bank before banking hours on April 30, 1907, it would receive the draft and make payment of the amount thereof to Pitt and Campbell, in which event the amount would be wholly lost to them, as they did not intend to continue under their contract, having learned that the stock was of little or no value. It was further found that thereupon the agent represented that the telegraph company would insure the immediate delivery of the message to the bank at Yerington if plaintiffs would pay the sum of $1.45, which sum was in excess of the company's regular charge. Plaintiff accepted the proposal, and paid the sum to the agent. In the presence of the plaintiffs the agent thereupon wrote upon the message, immediately below the date thereof, the words, "Deliver immediately," and accepted the message for immediate transmission to the town of Yerington for immediate delivery to the bank and agreed to immediately transmit and immediately deliver it to the bank for the plaintiffs, and assured the plaintiffs of such immediate transmission and immediate delivery thereof. The sum of $1.45 was in excess of the defendant's regular charge and usual toll; the usual charge for an unrepeated message being 98 cents, and for a repeated message the sum of $1.47. The message was written upon a blank form of the telegraph company, which is set forth in the findings. #108 It is further found that neither Hastings nor Lange read the printed matter on the blank, nor was either of them cognizant of the terms and conditions written thereon; the message was not repeated in the manner provided in the stipulations on the blank; that the regular course of communication by telegraph between Oakland, Cal., and Yerington, Nev., was by the lines of the Western Union Telegraph Company to Wabuska, Nev., which was the terminus of the telegraph that in order to transmit telegrams beyond company's lines for Yerington messages, and Wabuska it was necessary that they be transmitted from that point over the telephone line of the electric company to Yerington; that each of the companies received all messages offered it by the other company for further transmission, subject to the stipulations on telegraphic blanks, each company having and charging their separate toll; that the offices of the electric company and the telegraph company were both maintained in the SouthPacific Railway Company station at Wabuska, and that the telephone instrument of the electric company was within a few feet of the telegraphic instruments of the telegraph company; that at the time the Southern Pacific Railroad Company employed an agent at Wabuska to attend to its railway business, and that by an arrangement between the railroad company and the tele graph company said agent was employed to attend to the telegraph business of the telegraph company at Wabuska; that by agreement between the railroad company and the ern graph Company; (3) that under the circumstances the telegraph company was guilty of gross negligence in failing to transmit and deliver the message. The court thereupon affirmed the judgment of the District Court for the amount of the payment, adding interest. electric company the agent of the railroad agreement upon the Western Union Telecompany was at the same time employed by the electric company to handle the telephone business of the electric company; that there was a regular stage line open between Yerington and Wabuska in April and May, 1907; that the distance between Yerington and Wabuska was approximately 11 miles, and could be traversed in the stage in about 11⁄2 hours. *109 It is found that the telegraph company did not promptly, upon the receipt of the message on the evening of April 29, 1907, transmit it to the town of Wabuska, Nev.; that the defendant did not promptly deliver the message to the electric company for further transmission over its telephone line to Wabuska, Nev., but, on the contrary, defendant wholly failed and neglected to transmit the message to Wabuska until May 2, 1907, and wholly failed and neglected to deliver it to the electric company until May 2, 1907; that the delay in the transmission of the message occurred wholly on the lines of the telegraph company, and was caused by that company, and did not occur on the lines of the telephone of the Yerington Electric Company. [1] In our view of the case it is unnecessary to consider the correctness of the decision of the Circuit Court of Appeals as to the binding obligation of the oral contract made with the agent of the telegraph company, or the question of negligence of the company in the transmission and delivery of the message. The right of Hastings and Lange to recover was based upon the theory that the contract was an option terminable by the act of the buyer in failing to make the payment on the contract, which payment, it is found, would not have been made had the message been promptly delivered. An option is a privilege given by the owner of property to another to buy the property at his election. It secures the privilege to buy and is not of itself a purchase. The owner does not sell his property; he gives to another the right to buy at his election. [2] What, then, is the nature of this agreement? It contains the positive undertaking of the owner to sell and the purchaser to buy 625,000 shares of stock upon terms which are named. Upon the first payment being made, the certificates are to be deposited with tue bank in escrow, to be delivered when the final payment agreed upon is made, and in event of default in payment the bank is authorized to deliver the shares of stock to Pitt and Campbell, and all payments are to be forfeited, and the rights of the parties to cease and determine. We are of opinion that this is far more than a mere option to purchase, terminable at the will of the purchaser upon *111 It is further found that, if the telegraph company had proceeded with reasonable promptness to transmit and deliver the message to the bank, the same would have reached Yerington before the bank had received the draft mailed to it as aforesaid, and it would not have placed the amount represented thereby to the credit of Pitt and Campbell, or either of them, or paid any amount thereon; that by reason of the gross negligence of the telegraph company the message was not delivered to the bank until May 2, 1907, between the hours of 8:30 and 9 a. m.; that the bank had received the draft, and thereafter, on April 30, had paid over the amount thereof in gold coin to Pitt and Campbell pursuant to the terms of the contract between the plaintiffs and Pitt and failure to make the payments required. The Campbell on account of the payment to be agreement contains positive provisions bindmade on or before May 1, 1907, and had given ing the owner to sell and the purchaser to credit to Hastings and Lange for the amount buy upon the terms of the instrument. It is of said payment, all of which was done with-true the stock is to be deposited with the out any knowledge of said message or the bank in escrow, and it is authorized to dedetermination of Hastings and Lange to re- liver the same to Pitt and Campbell upon decall said draft; that Hastings and Lange did fault in payment. The findings do not show not make any further payments on the pur-whether Pitt and Campbell took back the chase price of said shares of stock, but aban- stock upon default of subsequent payments. doned the contract with Pitt and Campbell There was no understanding that Pitt and and forfeited and lost all moneys paid Campbell should take back the stock when ment which put it in the power of the purthe payments were not made, and no agreechasers to relieve themselves of the obligations of their contract by failing to keep up the payments. The right of Pitt and Campbell to receive the stock from the bank and end the contract was stipulated; it was a provision inserted for their benefit, of which they might avail themselves at their election. thereon. It was found that the 625,000 shares of stock of the Kennedy Consolidated Gold Mining Company have been at all times, and since and including April 29, 1907, practically valueless. The Circuit Court of Appeals held: (1) That the contract was an option terminable #110 by the buyers' failure to make the payments required; (2) the oral agreement for the transmission of the message was a binding In our opinion Stewart v. Griffith, 217 U. S. 323. 30 Sup. Ct. 528, 54 L. Ed. 782, 19 Ann. (40 Sup.Ct.) *113 ter*minable by the purchasers at their will. Stewart v. Griffith, supra. Cas. 639, is controlling upon this point. In | tains a privilege of ending it at the election of that case there was a sale of land, and the the vendor for nonpayment of the sum stippurchaser by the terms of the agreement paid ulated does not convert it into an option $500 as part of the purchase price. It was provided that in case of nonpayment of the balance of the first half of the purchase price on November 7, 1907, the $500 paid on the contract was to be forfeited, and the contract of sale and conveyance was to be null and void and of no effect. The contention was that the defendant was free to withdraw from the contract if he chose to lose the $500. But this court held, after considering the terms of the contract, that the $500 was part of the purchase price to be paid; that the land was described as being sold; and that in view of such stipulations, the purchaser had bound himself to take the land. As to the provision for the forfeiture of the $500, and the stipulation that the contract should become null and void upon nonpayment of the remainder of the purchase price, this court said: "The condition plainly is for the benefit of *112 As the recovery of the amount paid, with interest, as adjudged in the Circuit Court of Appeals, is founded upon its conclusion that the contract was an option, and the damages the amount paid and forfeited by the failure to stop the payment of the draft, and as we are not able to accept that view of the contract, it follows that the judgment of the Circuit Court of Appeals must be reversed, and the cause remanded to the District Court for further proceedings in conformity to this opinion. Reversed. (253 U. S. 136) MECCANO, Limited, v. JOHN WANAMAKER, NEW YORK. (Argued Jan. 26 and 27, 1920. Decided May 17, 1920.) No. 187. ORDER GRANTING TEMPORARY INJUNCTION REVIEWABLE BY CERTIORARI. *the vendor and hardly less plainly for his benefit alone, except so far as it may have fixed a time when Stewart might have called for performance if he had chosen to do so, which he 1. COURTS 383(1)—JUDGMENT REVERSING did not. This being so, the word 'void' means voidable at the vendor's election and the condition may be insisted upon or waived at his choice. Insurance Co. v. Norton, 96 U. S. 234; Oakes v. Manufacturers' Insurance Co., 135 Mass. 248, 249; Titus v. Glen Falls Insurance Co., 81 N. Y. 410, 419." The condition in the contract in Stewart V. Griffith that nonpayment should render the contract null and void is the equivalent of the stipulation in the present agreement, much relied upon by the respondent, that upon nonpayment of the stipulated sums the rights of each of said parties should cease and determine. We think the attempted distinction between Stewart v. Griffith and the instant case is untenable. The Circuit Court of Appeals reinforced its conclusion that the contract was an option by stating that it was usual to sell mining property under privileges of purchase, and, when investigation showed that the property was not valuable, to terminate such options by forfeiting the sums paid therefor, and de clining to make future payments. It is true that undeveloped mining property is often sold under option agreements. See 3 Lindley on Mines, § 859. But there is nothing to show that this contract was dependent upon the development of the mining property. The written agreement contains a positive undertaking to sell, upon the one part, and, upon the other part, to buy shares of the mining stock. Whether the shares sold constituted Under Judicial Code, § 128 (Comp. St. § 1120), making the judgment of the Circuit Court of Appeals final in certain cases, and section 240 (Comp. St. § 1217), authorizing the Supreme Court to review by certiorari any case Court of Appeals is made final, a judgment rein which the judgment or decree of the Circuit versing an order granting a preliminary injunction in a suit for infringement of a patent and copyrights and for unfair competition may be brought up by certiorari and treated as if before the court on appeal. 2. APPEAL AND ERROR 863, 1175(3)-ON APPEAL FROM ORDER GRANTING TEMPORARY INJUNCTION, CIRCUIT COURT OF APPEALS MAY DISMISS BILL. On an appeal to the Circuit Court of Appeals, under Judicial Code, § 129 (Comp. St. § 1121), from an order granting a preliminary injunction, the court is not limited to a condismiss the bill and terminate the litigation, if sideration of the order appealed from, but may an insuperable objection to maintaining the bill clearly appears. 3. INJUNCTION 135-GRANT OF PRELIMI NARY INJUNCTION DISCRETIONARY. Whether a preliminary injunction shall be awarded rests in the sound discretion of the trial court. 4. APPEAL AND ERROR 954(1)-GRANT OR DENIAL OF INJUNCTION NOT DISTURBED, UNLESS INEQUITABLE OR AN ABUSE OF DISCRETION. all the shares of the company does not ap injunction will not be disturbed on appeal, unAn order granting or denying a preliminary pear. Nor is the relative proportion of those less contrary to some rule of equity or the resold to the whole amount of the stock any-sult of an improvident exercise of judicial diswhere shown. The fact that the contract con- cretion. For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes 5. APPEAL AND ERROR REASONS. 1092-SUPREME | Fed. 912. An appeal was taken to the Circuit COURT WILL NOT DISTURB ACTION ON PRE- Court of Appeals, Sixth Circuit. The same LIMINARY INJUNCTION, EXCEPT FOR STRONG corporation instituted the present suit in the United States District Court, Southern District of New York (December 9, 1916) seeking like relief against John Wanamaker, a customer of Wagner. Except for strong reasons, the Supreme Court will not interfere with the action of the Circuit Court of Appeals on appeal from an order granting a preliminary injunction. 6. APPEAL AND ERROR 1108-REVERSAL OF DECREE RELIED ON BY LOWER COURT PROP ERLY NOTICED ON APPEAL. Where a preliminary injunction in a suit for infringement of a patent and copyrights and unfair competition was evidently granted in reliance on a decree rendered in another suit brought by plaintiff against the party whose goods defendant was handling, the Circuit Court of Appeals properly took notice of the subsequent reversal of such decree. 7. APPEAL AND ERROR 891-FINAL DE CREE FOR PLAINTIFF CANNOT BE GRANTED The trial court granted a preliminary inJunction, asked upon the bill, supporting affidavits and exhibits-January 12, 1917, It expressed general agreement with the conclusions announced in the Ohio cause and said: "It seems quite apparent that the patent is infringed and that diagrams and directions as to construction have been borrowed by defendant from complainant's copyrighted catalogues, and that the system of construction adopted by the defendant is a direct imitation of complainant's system." An appeal followed, pending which the Cir ON APPEAL FROM ORDER GRANTING INJUNC-cuit Court of Appeals, Sixth Circuit (No TION, ON EX PARTE AFFIDAVITS. While, on an appeal from an order granting a preliminary injunction, in a suit for infringement of a patent and copyrights and for unfair competition, the cause might be dismissed, if it clearly appeared that no ground existed for equitable relief, the court could not render a final decree for complainant on ex parte affidavits and decrees of other courts in a suit by the same plaintiff against the party whose goods defendant was charged with selling. 8. APPEAL AND ERROR 863-SUPREME COURT CANNOT DETERMINE MERITS ON RE VIEW OF PRELIMINARY INJUNCTION. On review of a judgment reversing an order granting a preliminary injunction, the only matter for review is the action of the courts below respecting such injunction, and the Supreme Court cannot go further and decide the issues involved on their merits. On Writ of Certiorari to the United States Circuit Court of Appeals for the Second Circuit. Suit by Meccano, Limited, against John Wanamaker, New York. An order granting a preliminary injunction (241 Fed. 133) was reversed by the Circuit Court of Appeals (250 Fed. 450, 162 C. C. A. 520), and plaintiff brings certiorari. Affirmed and remanded. vember, 1917), reversed the Ohio District Court's decree so far as it sustained the patent, approved it otherwise, and remanded the cause for further proceedings. Wagner v. Meccano, 246 Fed. 603, 158 C. C. A. 573. January 25, 1918, after argument, but before determination of appeal from the preliminary order, petitioner moved for final decision on the merits, claiming that the decree of the Circuit Court of Appeals, Sixth Circuit, "is final and conclusive as to the case at bar, under principles enunciated by the Supreme Court." Being opposed, the motion was denied-March 24, 1918. The court said of it: *139 "This was a motion for a 'decision on the merits of this cause' by this court under the following circumstances: A suit was brought in the District Court for the Southern District of New York for an injunction for infringement of a copyright, and of a patent, and for unfair competition in the manufacture of a mechanical toy in absolute imitation of the plaintiff's. The plaintiff applied for and got *an injunction pendente lite [241 Fed. 133], from which the defendant appealed. That appeal is still pending undetermined in this court. Meanwhile the plaintiff had in the District Court required the defendant to answer certain interrogatories, by which it appeared that the defendant procured from one Wagner the toys which it sold in althe patent, and also the 'manuals' which went leged unfair competition and in violation of with the toys and explained their uses, which are alleged to infringe the copyright. The in Mr. Justice McREYNOLDS delivered the terrogatories further showed that Wagner had opinion of the Court. Proceeding against Wagner and others in the United States District Court, Southern District of Ohio, Meccano, Limited, obtained a decree (July 8, 1916) affirming the validity, and restraining infringement, of its patent for mechanical toys, also restraining unfair competition in making and selling such toys and the further infringement of its copyright *138 upon trade catalogue and illustrated manual relating thereto. Meccano v. Wagner, 234 agreed to hold the defendant harmless for any "The plaintiff sued Wagner in Ohio upon the three same causes of equity and obtained a decree upon all. Later an appeal was taken to the Circuit Court of Appeals for the Sixth Cir For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |