. Appeal from the District Court of the United States for the District of Montana; Geo. M. Bourquin, Judge.

Suit in equity by the Mackey Wall'Plaster Company against the United States Gypsum Company. Decree for complainant, and defendant appeals.'

This is a suit for specific performance of an option contract. On Juno 15, 1909, the Mackey Wall Plaster'Company, appellee, made a lease of certain premises to the United States Gypsum Company, appellant. The lease ran a year, with an option of purchase of all the property and rights described in the contract under certain conditions of payment. The property involved consisted of all the right, title, interest, and estate of the Plaster Company in and to a certain tract of land in Riceville, Mont., and a described tract near Great Falls, the latter tract having been acquired by the Plaster Company through an indenture of lease theretofore entered into between the Great Northern Railway Company and the Plaster Company on June 22, 1908, and subject to all of the terms and conditions therein set forth, a copy of which indenture of lease being attached to the contract of leaste. By agreement on July 1,’ 1910, the lease and option were extended for five years, and thereafter, by an agreement dated July 6, 1915, the agreements of June 15, 1909, and July 1, 1910, were extended for the further period of one year from July 6, 1915. In the last extension the manner of the exercise of the option was provided for as follows: “Now, therefore, in consideration of the premises, * * * it is agreed that the said instruments dated June 15, 1909, and July 1, 1910, be in all things and respects extended, renewed, and made valid and of full force and effect for the further period of one (1) year from and after the date hereof: And as a further consideration for said extension lessee agrees that, if it shall determine that it will not avail itself of the option in said several agreements contained to purchase -the property of the lessor, Mackey Wall Plaster Company, upon the terms and conditions in said several instruments provided, it will at least sixty (60) days prior to-the first day of July, 1916, give the lessors in writing a notice to the effect that lessee will not purchase the said property under' and by virtue of said agreements; and it is agreed that if lessee shall neglect or fail to give such notice, at least sixty days before the first day of July, 1910, it will thereby become obligated to make such purchase and pay the consideration in said instruments provided to be paid in the event of purchase. * * * ” It is admitted that the Gypsum Company took possession of the property leased and remained in the enjoyment thereof during the term of the lease; that it paid all rents and otherwise lived up to the conditions of the contract and kept in possession thereof during the extensions heretofore referred to.

The appellant denied that it had elected to purchase the premises, and alleged that by letter dated April 19, 1916, it had notified appellee of its intention not to purchase. The Mackey Company, on the other hand, took the position that the option was exercised by the Gypsum Company by failure to give the notice referred to in the agreement of July 6, 1935, and accordingly, upon July 5, 1916, sent to the Gypsum Company deeds of conveyance to the property described in the agreement; but these deeds were returned' by the Gypsum Company with the statement that it had not purchased the property. The Gypsum Company, appellant, also contends that the giving of the notice of nonaceeptance was waived by the conduct of the Mackey Company, or that it had estopped itself to assert that such notice was never given, and further that, even if the option had been exercised specific performance of the agreement should not bo decreed-for the reason,that the Mackey Company could not give satisfactory title to a part of the premises agreed to be conveyed inasmuch as a part of such premises were held under a lease from the Great, Northern Railway Company 1o the Mackey Company, which lease contained the usual provision against assignment or subletting without the consent of the lessor, and because no satisfactory consent had been made by the Great Northern Railway Company.

The court, decreed specific performance. The Gypsum Company appealed.