1 Aahton v. Dakin, 4 H. & N. 867. "If the law were held to be otherwise, nearly every contract for the sale of stock on the London Stock Exchange would be gambling; for in almost every instance the jobber buys intending to resell before a delivery is made to him, and giving up the name of a third party as the purchaser." Biddle on Stock Brokers, 305.

2 Cameron v. Durkheim, 55 N. Y. 425; Pixley v. Boynton, 79 111. 351; Sawyer v. Taggart, 14 Bush, 727; Pickering v. Cease, 79 111. 727.

3 Brua's App., 55 Penn. St. 294;.

Fareira v. Gabell, 89 Penn. St. 89; North v. Phillips, 89 Penn. St. 250; Gheen v. Johnson, 90 Penn. St. 38; Ruchizky v. De Haven, 97 Penn. St. 202; Dickson v. Thomas, 97 Penn. St. 278.

4 See, for a criticism of the Pennsylvania cases above cited, Dos Passos on Stock Brokers, 431 et seq.

In Hatch v. Douglass, 48 Conn. 116, the defendant wrote to the plaintiffs, who were stock brokers in New York city, " I want to buy one hundred shares Union Pacific stock on margin. Will you take $1000 first mortgage New sec 453a. Sales on option are sometimes spoken of as gambling transactions; but this is not necessarily the case. The fact is, the meaning of the term "option" varies with local usage.

York and Oswego Railroad, and do it ?" The plaintiffs answered that they would, and at once bought the stock, and soon after sold it by defendant's order at a profit. Other stocks were afterwards bought and sold under the same arrangement, resulting in a loss on the entire account. The suit was brought to recover this loss. It was held that the suit could be maintained. Carpenter, J., in delivering the opinion of the court, said: "The authorities are clear that a contract relating to stocks or other commodities, to be performed at a future day, by which the parties contemplate only the payment of the difference in the market value by one or the other as the case may be, is a mere gaming contract and void. So if parties in form contract to sell goods to be delivered in the future, the seller in fact having no goods, and the parties not intending an actual delivery, but contemplating merely a payment of the difference between the market value on that day and the agreed price, it is a gaming contract and cannot be enforced. Contracts of this nature, however, are distinguishable from speculating contracts. A man may legitimately buy goods or stocks intending to sell in a short time and take advantage of an advance in the price if there is one. In such a case he takes the risk of a decline, but that does not make it a gambling contract. And he may purchase goods at a fixed price to be delivered at a future day, if the parties intend an actual delivery and acceptance. The actual intention may be difficult to prove or disprove; but when once the fact is established, one way or the other, there is no difficulty in applying the law.

"Now there are in the transactions between these parties some of the elements which are usually found in a gambling contract. For instance, it is pretty evident that the parties did not contemplate that the stock should be actually transferred to the defendant; but he would have been satisfied with the receipt of the difference between the price paid and the price received, less interest and commissions, if the price advanced, and expected to pay the difference if the price declined. To that extent it was a contract for the payment of differences. But it was more than that. The defendant through his agents, the plaintiffs, actually purchased the stock, and there was an actual delivery - not to the principal, but to the agents for the principal. The plaintiffs advanced the money and held the stock in their hands as security. The plaintiffs were ready at any time to transfer the stock to the defendant on payment of the purchase-money. The import of the finding is, and we must so regard it, that it was an actual and bona fide employment of the plaintiffs to purchase stocks, and not a mere formal employment designed to cover a betting operation. It does not appear that the plaintiffs assumed any risk. They were entitled to their commissions and interests on their advancements, whether the stocks went up or down. The most that can be said of them is, that they knew that the defendant was speculating, and that they advanced him money for that purpose. But that was neither illegal nor immoral."

In a recent excellent work on stockbrokers1 is the following;: "Option signifies in America a right or privilege to receive or deliver a certain number of shares of a specified stock on a certain day at a certain price with or without interest. In England it signifies the right to buy or sell at a future day at a certain price, or to do neither." Now if this were all, there is nothing in such contracts necessarily illegal. Contracts to sell or purchase at a future date at the election of the promisor, subject to certain contingencies, are no more illegal than are other contracts conditioned on a future contingency.2 Nor is there anything necessarily illegal in a conditional agreement to buy or sell in the future at the election of one of the parties. I may own, for instance, a house in a particular block, and I may say to my neighbor who owns the next house, "now there may come a contingency in which it may be important for me to own both houses, or to own neither, give me the 'option' to do this, and I will pay you so much at once for this privilege." This, as we will presently see, is what, were the bargain made in the stock-market, would be called a "straddle;" nor, however disreputable may be some of the brokerage transactions to which the name is applied, is there anything in such a bargain which is in itself immoral or inequitable, or which should prevent it from being enforced. If this be the case, we must a fortiori hold that an agreement by one party to give another an "option" has in it nothing necessarily immoral or inequitable. There may be a contingency, for instance, which may