present case to concern itself. There has been a great difference of opinion, especially in the English courts, over the question whether an injunction can issue to prevent the breach of a contract unless it contains an express negative covenant. But with that question also we are not concerned in this case, as the contract here involved does contain an express negative covenant. It is sufficient for our present purpose that a distinction exists between suits brought to compel specific performance of an affirmative covenant for personal services, and suits brought to restrain by injunction the violation of a negative covenant respecting such services. McCall Co. v. Wright, 198 N. Y. 143, 31 L. R. A. (N. S.) 249, 91 N. E. 516.

"The contract gave the plaintiff an option to renew its contract for the theatrical year from September 1, 1920, to September 1, 1921, provided it gave defendants notice in writing or orally of its desire to exercise such option prior to July 1, 1920. If the option was not exercised according to its terms, the contract has expired, the defendants have not violated it, and no injunction can issue.

"The testimony shows that Mr. Shubert, the vice president of the plaintiff corporation, and who had full charge of such matters, dictated to his stenographer on June 7, 1920, a letter exercising the option; that she had typed it and then handed it to Shubert, who signed it and gave it back to her; that she then handed it, properly addressed, to the head of the mailing department in the Shubert office, telling her that it was important and to mail it herself; and that the latter person stamped it and herself mailed it on the same day in a regular United States government postoffice box. The letter was mailed in a Shubert envelop having a return address stamped on it, and it was never returned for non-delivery. The letter was addressed to defendants, in care of the Detroit Opera House, Detroit, Michigan, where the defendants were engaged for the week beginning on that day.

"The court below has found as a fact that the letter

was written and mailed. We concur with him in that finding. The court also said that in writing and mailing the letter the plaintiff did all that was required of it under the contract. In that proposition we also fully concur; the letter having been written prior to the expiration of the option. Prior to that time the defendants are deemed in law to have been making to the plaintiff a continuing offer, and the mailing of the letter was an acceptance of it. An option, when based on a sufficient consideration, is a contract by which one binds himself to sell property or perform services, and leaves it discretionary with the other to take the property or accept the services on the terms specified. In such a contract two elements exist: first, the offer to sell or to render service which does not become a contract until accepted; second, the completed contract to continue the offer or to leave it open for the time named. Black v. Maddox, 104 Ga. 157, 162, 30 S. E. 723.

"An option is said in Milwaukee Mechanics' Ins. Co. v. Rhea, 60 C. C. A. 103, 123 Fed. 11, to be nothing more than a continuing offer to sell. In Standiford v. Thompson, 68 C. C. A. 425, 430, 135 Fed. 996, it is defined as 'an unaccepted offer to sell,' and it is said to be ‘a continuing offer until the expiration of the time limited.' In McMillan v. Philadelphia Co., 159 Pa. 142, 28 Atl. 220, it is said that an option is an unaccepted offer, which becomes a binding contract when the holder of the option signifies that he accepts the offer within the time fixed. And an option is defined in Adams v. Peabody Coal Co., 230 Ill. 469, 82 N. E. 645, as a continuing offer which the offerer may not withdraw until the expiration of the time limited. In Rease v. Kittle, 56 W. Va. 269, 49 S. E. 150, it is said that 'an option contract to purchase is but a continuing offer to sell.' In 35 Cyc. 56 it is said that an option is a continuing offer or contract by which the owner stipulates with another that the latter shall have the right to buy the property at a fixed price within a certain time. And see Ganss v. J. M. Guffey Petroleum Co., 125 App. Div. 760, 110 N. Y. Supp. 176, 177; Sizer

v. Clark, 116 Wis. 534, 93 N. W. 539; Snider v. Yarbrough, 43 Mont. 203, 115 Pac. 411; Bates v. Woods, 225 Ill. 126, 80 N. E. 84; John v. Elkins, 63 W. Va. 158, 59 S. E. 961.

"The law is settled that, if a letter accepting an offer is made in the manner either expressly or impliedly indicated by the party making the offer, it makes no difference whatever that the letter is never received because of some mistake of the postoffice authorities, or through accident in transmission, or because in some way it becomes lost. Patrick v. Bowman, 149 U. S. 411, 37 L. Ed. 790, 13 Sup. Ct. Rep. 811, 866; Tayloe v. Merchants' F. Ins. Co., 9 How. 390, 13 L. Ed. 187; Burton v. United States, 202 U. S. 344, 384-386, 50 L. Ed. 1057, 1072, 1073, 26 Sup. Ct. Rep. 688, 6 Ann. Cas. 362; Mactier v. Frith, 6 Wend. 103, 21 Am. Dec. 262; Vassar v. Camp, 11 N. Y. 441; Trevor v. Wood, 36 N. Y. 307, 93 Am. Dec. 511; White v. Corliss, 46 N. Y. 467; Howard v. Daly, 61 N. Y. 362, 19 Am. Rep. 285; Mercer Electric Mfg. Co. v. Connecticut Electric Mfg. Co., 87 Conn. 691, 89 Atl. 909; Perry v. Mt. Hope Iron Co., 15 R. I. 380, 2 Am. St. Rep. 902, 5 Atl. 632. The law of England is to the same effect, Brogden v. Metropolitan R. Co., 2 App. Cas. 666, 6 Eng. Rul. Cas. 94; Re Imperial Land Co., L. R. 15 Eq. 18, 42 L. J. Ch. N. S. 372.

"It is necessary, therefore, to inquire whether, under the circumstances, the plaintiff had a right to use the mails for the purpose of communicating its exercise of its option. The plaintiff was expressly authorized by the defendants to exercise the option in writing or orally. We think that this gave it the right to communicate by mail its written acceptance of the offer. Authorization to communicate acceptance by mail is implied in two

cases:

"(1) Where the post is used to make the offer, and says nothing as to how the answer is to be sent.

"(2) Where the circumstances are such that it must have been within the contemplation of the parties that according to the ordinary usages of mankind the post

might be used as a means of communicating the acceptance. Henthorn v. Fraser, (1892) 2 Ch. 27, 61 L. J. Ch. N. S. 373, 63 L. T. N. S. 439, 40 Week. Rep. 433; Carey v. Roots, 5 Alberta L. R. 125, 21 West. L. R. 795, 2 West. Week. Rep. 678, 5 D. L. R. 670; Ellis v. Block, 187 Mass. 408, 73 N. E. 475; Campbell v. Beard, 57 W. Va. 501, 509, 50 S. E. 747. See 13 C. J. p. 300, Sec. 116.

"Where authority is given to accept in writing an offer which was made orally the offeree has a right to understand, in our opinion, that he is at liberty to send his answer by post; and if he encloses the writing in an envelop properly stamped and addressed, and deposits it either in the postoffice or in a street letter box, which is a part of the postoffice system for the transmission of mail, he has done all that is required. Wood v. Callaghan, 61 Mich. 402, 1 Am. St. Rep. 597, 28 N. W. 162.”

Question 55: (1) How was the offer of the Raths in this case (by way of renewal of the original contract) accepted? Was it material whether the acceptance ever actually reached the Raths? Why?

(2) In what cases may an offer be accepted by mail according to the court's statement?

(Note: Effect on rule (that a contract is complete when acceptance is mailed) of right of acceptor to withdraw the letter from the mails. The rule of the Post Office Department that a sender of a letter may withdraw same from the mails has caused inquiry to be made whether this would not change the rule that the delivery of the letter to the post office constitutes an acceptance and closes the contract. That rule has been said to be based upon the fact that the acceptor has put the letter out of his control, but if it may be withdrawn by him, it is not out of his control. In 9 American Law Reports, at page 386, there is a note on this question following the case of Traders' National Bank v. First National Bank of McMinnville, 217 S. W. (Tenn.) 977 in which the court held (head note), "A bank which merely places in the mail a draft in payment of a check upon its customer does not accept (certify) the check so as to become liable upon it in case the drawer's account is overdrawn ; if within 24 hours it secures a return of the letter containing

the draft from the mail, under the postal regulations." The author of the note says: "There is, perhaps, ground for distinction between the question presented in the reported case. and the question presented in ordinary contracts, whether the depositing of a letter of acceptance in the mails, where this mode of acceptance is authorized, completes the contract." And the annotator says that this question has received but little attention from the courts. The postal rule goes back to 1887 "at least." The regulations of 1913 made little substantial distinction in the rule. And he continues, "The better rule would seem to be that the acceptance is not completed at the time of the posting of the letter, whether in fact it is withdrawn or not." But the weight of authority is clearly the other way, and there seems to be no good reason for any such conclusion by the annotator. In Lucas v. W. U. Tel. Co., 131 Iowa 669 (Case No. 54, herein) the court says that if the sender should succeed in withdrawing the letter from the mails such "withdrawal will not invalidate the contract previously entered into." And the case of Shubert Theatrical Co. v. Rath, Case No. 55 herein, was decided in 1921, and is reported in 21 American Lawyers Reports, and a year later than the note above referred to was written, wherein the court makes no comment on the effect of such a rule and in Williston on Contracts (Edition of 1920) the learned author says:

"§ 86. It is not important that the acceptor has the power to withdraw his acceptance from the mails. An inference is possible from an English case (Ex parte Cote, L. R. 9 Ch. 27) that the doctrine that an acceptance is complete when it is mailed is based on the assumption that thereafter the letter is no longer within the sender's control. This doctrine can hardly

be accepted in the United States.

The conclusion is that while there are authorities pointing the other way, and while it is possible that there may be a development of the law in that direction, the better view is that this right to withdraw a letter from the mails has no effect on the present doctrine and notwithstanding that fact, a contract is complete when the acceptance is posted, provided that was the authorized mode of acceptance, and provided there was no stipulation that the acceptance must actually reach the offeree in order to be complete.)