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depends upon its status at the time the petition in bankruptcy is filed. Contingent debts or liabilities, the valuation or estimation of which it is substantially impossible to fix, cannot be proved in bankruptcy.

prove it if he had no knowledge of the insolvency.

8 Re Swift, C. C. A., 112 Fed. 315; Re Pettingill & Co., C. C. A., 137 Fed. 840; Re Reading Hosiery Co., 171 Fed. 195; Re Progressive Wall Paper Corp., C. C. A., 229 Fed. 489; Re Mullings Clothing Co., 230 Fed. 681; Re Henry & S. G. Lindeman, 238 Fed. 639. But see Re Shatz, 251 Fed. 351.

9 Dunbar v. Dunbar, 190 U. S. 340, 350, 47 L. ed. 1084; Schall v. Camors, 251 U. S. 239; Harv. Law Rev. XVIII, 469. The amount of a note may be proved although it does not mature until subsequent to the filing of the petition. Re Percy Ford Co., 199 Fed. 334. Re Wisconsin Engine Co., C. C. A., 234 Fed. 281. See Matter of Fleet v. Yawger, or People v. Metropolitan Surety Co., 205 N. Y. 135; and supra, § 320. The notes of a bankrupt corporation, given to its officers are provable. Spencer V. Lowe, C. C. A., 198 Fed. 961. So is a note given to a stockholder for money borrowed to effect a composition. Re C. H. Bennett Shoe Co., 162 Fed. 691. The liability of the bankrupt as indorser or surety is a provable debt, although default is not made by the principal until after the filing of the petition and the adjudication. Moch V. Market Street Bank, C. C. A., 107 Fed. 897, Re Philip Semmer Glass Co., C. C. A., 135 Fed. 77; Re Rothenberg, 140 Fed. 798. But see Re O'Donnell, 131 Fed. 150; Re Pettingill & Co., 137 Fed. 143; Morgan v. Wor

dell, 178 Mass. 350, 55 L.R.A. 33; Goding v. Rosenthal, 180 Mass. 43. It seems that this can only be done when the liability becomes fixed and absolute, within one year from the date of adjudication. Ibid.; Remington on Bankruptcy, § 643. Where a surety or indorser is liable upon the obligation of the bankrupt for the absolute and unconditional payment of a sum of money, the claim may be proved in bankruptcy, and the obligation takes effect from the date when the surety signed the obligation. Re Stout, 109 Fed. 794; Swarts V. Siegel, C. C. A., 117 Fed. 13; Livingstone v. Heineman, C. C. A., 120 Fed. 786; Cohen v. Goldman, C. C. A., 250 Fed. 599. The fact that the surety makes no payment until after the adjudication in bankruptcy does not deprive him of the right to prove his claim. Ibid. Williams v. U. S. Fidelity & Guaranty Co., 236 U. S. 549; Re Schmechel Co., 104 Fed. 64; Moch v. Market Street Bank, C. C. A., 107 Fed. 897, affirming Re Gerson, 5 Am. B. R. 89. It has been held: that where the surety's obligation is conditional upon the failure of the bankrupt to perform some other act than the payment of money, the surety cannot prove his claim unless it matures before the petition in bankruptcy. Clemmons v. Brinn, 36 Misc. (N. Y.) 157, 35 Misc. (N. Y.) 844, 7 Am. B. R. 714 (a forthcoming bond in replevin). Re Merrill & Baker, C. C. A., 186 Fed. 312. But see Williams v. U. S.

§ 648. Set-offs and counter-claims. “(a) In all cases of mutual debts or mutual credits between the estate of a bankrupt

Fidelity & Guaranty Co., 236 U. S. 549. It seems that when there is a condition to the surety's liability, such as the recovery of a judgment, or decree, it is not provable if no judgment was obtained before the petition in bankruptcy. Hibberd v. Bailey, C. C. A., 129 Fed. 575, reversing Re Wiseman, 123 Fed. 185. Directors who have endorsed the notes of a bankrupt corporation may prove the amount they have paid thereupon, Re Salvator Brewing Co., C. C. A., 193 Fed. 989; but it has been held, can prove no claim until after payment by them, Re Dr. Voorhees Awning Hood Co., 187 Fed. 611. A judgment for a deficiency after a foreclosure, which was entered within a year after the bankruptcy, may be proved. Re Fitzgerald, 191 Fed. 95. Where such a judgment was obtained by a trustee for bondholders prior to the bankruptcy and afterwards proved by such trustee, the bondholders were allowed to prove their individual claims upon the bonds in their own name SO that they might be able to protect their rights. Mackay v. Randolph Macon Coal Co., C. C. A., 178 Fed. 881. Claims have been proved which were based upon the liabil ity of the bankrupt upon a stock subscription, Farnsworth v. Union Trust & Deposit Co., C. C. A., 211 Fed. 914. Proof has been denied to the holders of what purported to be bonds of a bankrupt corporation when these by their terms gave the holders no greater right than an annual payment out of the profits and a right to share in the assets upon the final distribution thereof. Fed. Prac. Vol. III-81

Synnott v. Tombstone Consol. Mines Co., C. C. A., 208 Fed. 251. Re Fechheimer Fishel Co., C. C. A., 212 Fed. 357, certiorari denied 234 U. S. 760, in which the author was counsel. But see Re Interborough Realty Co., C. C. A., 223 Fed. 646; Burt v. Rattle, 41 Ohio St. 116; Hilson Co. v. State Board of Assessors, 82 N. J. Law 2; Cass v. Realty Sec. Co., 148 App. Div. 96; s. c., 149 App. Div. 43, aff'd 206 N. Y. 649. Creditors have been allowed to prove dividends declared by a corporation before its bankruptcy, Spencer v. Lowe, C. C. A., 198 Fed. 961; but not a guarantee of dividends so far as concerned those which fell due after the petition in bankruptcy, Re Pettingill & Co., 137 Fed. 143; the liability upon a bond to secure the payment of an annuity may be proved while the annuity is still alive. Dunbar v. Dunbar, 190 U. S. 340, 47 L. ed. 1084; Cobb v. Overman C. C. A., 54 L.R.A. 369, 109 Fed. 65. But see Re Hartman, 166 Fed. 776. Where an annuity is to cease upon the marriage of the annuitant, it is not a provable claim. Dunbar v. Dunbar, 190 U. S. 340, 47 L. ed. 1084. Contra, Ex parte Blakemore, 5 Ch. Div. 372. It has been held that a claim for damages for breach of a contract to pay royalties on a minimum number of patented articles during the term of the patent, can be proved, but that claim for future royalties canRe Dr. Voorhees Awning Hood Co., 187 Fed. 611. The amount due for work under a building contract, performed after the petition in bankruptcy, may be

not.

and a creditor the account shall be stated and one debt shall be

proved as a claim for a breach of contract, if there is such a liability therefor; but not upon a quantum meruit. Re Adams, 130 Fed. 788. Where, by his contract, a subcontractor had no claim against the builder until the owners had made a payment on account of the labor and material, which he had furnished, and no such payments had been made; it was held that the claim could not be proved. Re Ellis, C. C. A., 143 Fed. 103. It has been held that a materialman cannot prove against the estate of a contractor with the United States, his claim under a contract with a subcontractor, but that his remedy is confined to the bond. Re Hawley, 194 Fed. 751. Where bankruptcy, either voluntary or involuntary, disables the bankrupt from the performance of an executory contract this may be treated as an anticipatory breach thereof, and the damages, if capable of liquidation may be proved, Central Trust Co. v. Chicago Auditorium, 240 U. S. 581; Board of Commerce of Ann Arbor v. Security Trust Co., C. C. A., 225 Fed. 454; Re Spengler, 238 Fed. 862. It was 80 held where the contract itself liquidated the damages for a breach thereof,

Board of Commerce of Ann Arbor v. Security Trust Co., C. C. A., 225 Fed. 454. Bankruptcy may mature the obligation for installments which would not otherwise be due until subsequently and justify the proof of a claim therefor; Re Swift, C. C. A., 112 Fed. 315; Re Adams, 130 Fed. 788; Re Pettingill & Co., 137 Fed. 143. But see Re Imperial Brewing Co., 143 Fed. 579. It will not always justify the rescission of

an executory contract, Re 35% Automobile Supply Co., 247 Fed. 379. Damages for the breach of a contract of employment may be proved, although the term of service has not expired; Re Silverman Bros., 101 Fed. 219; Re Miller, 225 Fed. 331; Re Schultz & Guthrie, 235 Fed. 907. If not, it has been held, the salary of an officer of the corporation. Re Dr. Voorhees Awning Hood Co., 187 Fed. 611; Re Montague & Gillet, 212 Fed. 452; Contra, Re Inman & Co., 171 Fed. 185; Re Am. Vacuum Cleaner Co., 192 Fed. 939. But see Cf., Re D. Levy & Sons Co., 208 Fed. 479. Minor children are allowed to prove claims for the value of their serv ices to a bankrupt father when he had given them their time, Re Kanter, 215 Fed. 276. Proof may be made of damages for the breach of continuing contract to supply goods, Re Stern, C. C. A., 116 Fed. 604; Re Glick, 184 Fed. 967; Contra, Re Inman & Co., 175 Fed. 312, or to buy property, where the trus tee does not assume it; Re Saxton Furnace Co., 142 Fed. 293; Re Im perial Brewing Co., 143 Fed. 579; Re Spittler, 151 Fed. 942; Re Neff, C. C. A., 28 L.R.A. (N.S.) 349, 157 Fed. 57; Contra, Phenix National Bank v. Waterbury, 123 App. Div. (N. Y.) 453, see Re Duquesne Incandescent Light Co., 176 Fec1. 785; and damages for a breach of ranty, although the amount has not yet been fixed, Re Grant Shoe Co., C. C. A., 130 Fed. 881; Switzer v. Henking, C. C. A., 15 (N.S.) 1151, 158 Fed. 784. settled that bankruptcy does cancel a lease, Gazlay v. Williams, 210 U. S. 41, 52 L. ed. 950; Re Pen

a

war

L.R.A. It is

not

set off against the other, and the balance only shall be allowed.

newell, C. C. A., 119 Fed. 139; Watson v. Merrill, C. C. A., 69 L.R.A. 719, 136 Fed. 359; even though it is forfeited by an assignment by the lessee, or by the sale of his interest under execution, or other legal process. Gazlay v. Williams, 210 U. S. 41, 52 L. ed. 950.

Rent, which has accrued prior to the filing of the petition, may be proved, Re Arnstein, 101 Fed. 706; Re Sherwoods, Inc., C. C. A., 210 Fed. 754; Re Mullings Clothing Co., 230 Fed. 681; although it is payable in advance for a period which has not then expired. Wilson v. Pennsylvania Trust Co., C. C. A., 114 Fed. 742; Re Mitchell, 116 Fed. 87; Re Roth & Appel, 174 Fed. 64. It has been held that a claim for rent accruing before the adjudication but after the filing of the petition may be proved. Re Hinckel Brewing Co., 123 Fed. 942. Contra, Re Adams, 130 Fed. 788. Where the lease, by its terms, is terminated by the tenant's bankruptcy, neither future rent nor damages for loss may be proved. Re Shaffer, 124 Fed. 111; South Side Trust Co. v. Watson, C. C. A., 200 Fed. 50. A number of authorities hold that claims for rent, which is not due before the adjudication, are not provable against the estate unless the trustee has assumed the lease or accepted the premises, Re Jefferson, 93 Fed. 948; Re Mahler, 105 Fed. 428; Atkins v. Wilcox, C. C. A., 53 L.R.A. 118, 105 Fed. 595; Re Hays, Foster & Ward Co., 117 Fed. 879; Re Hinckel Brewing Co., 123 Fed. 942; Re Adams, 130 Fed. 788; Watson v. Merrill, C. C. A., 69 L.R.A. 719, 136 Fed. 359; Re Rubel, 166 Fed. 131; Colman Co. v.

Withoft, C. C. A., 195 Fed. 250; even where the lease provides that rent, subsequently accruing, shall become due upon default in one installment, Re Quaker Drug Co., 204 Fed. 689; Re Merwin & Willoughby Co., 206 Fed. 116; or upon the bankruptcy of the tenant; Re Winfield Mfg. Co., 137 Fed. 984; s. c., 140 Fed. 185; Wm. Filene's Sons Co. v. Weed, C. C. A., 230 Fed. 31. But see Atkins v. Wilcox, C. C. A., 105 Fed. 595, 598; Re Keith-Gara Co., 203 Fed. 585; Re Caswell-Massey Co., 208 Fed. 571; Re Miller Bros. Grocery Co., C. C. A., 219 Fed. 851. In cases of leases of machinery with clauses that they might be terminated by the bankruptcy of the lessees whereupon a fixed sum for deterioration, freight and return charges should become due, the lessors have been permitted to prove claims therefor; Re D. C. Clark Shoe Co., 211 Fed. 341; Re Jorolemon-Oliver Co., 213 Fed. 625; Re Desnoyers Shoe Co., C. C. A., 227 Fed. 401. The landlord is not allowed to prove the cost of pumping a mine necessitated by the lessor's abandonment of work upon the latter's bankruptcy. Re Gallacher Coal Co., 205 Fed. 183. It has been held that the same rule applies to notes for future rent, which are in the hands of the landlord, Atkins v. Wilcox, C. C. A., 53 L.R.A. 118, 105 Fed. 595; Contra, Re Wisconsin Engine Co., C. C. A., 234 Fed. 281, notes for royalties; that a person jointly liable with the bankrupt upon a lease cannot prove his claim for contribution against the bankrupt. Colman Co. v. Withoft, C. C. A., 195 Fed. 250. But see Re Baker & Edwards, 224 Fed.

or paid. (b) A set-off or counter-claim shall not be allowed in

611. Landlords have been permitted to prove claims for damages based upon the difference between the rent which the tenant covenanted to pay and what he was able subsequently to collect from another, Re Caloris Mfg. Co., 179 Fed. 722; Re Sherwoods, Inc., C. C. A., 210 Fed. 754; Re Mullings Clothing Co., C. C. A., 238 Fed. 58; reversing 230 Fed. 681; s. c., 252 Fed. 667. But see Re Gallacher Coal Co., 205 Fed. 183; Re Leslie & Griffith Co., 230 Fed. 465; but not when they had accepted a surrender; or enforced a forfeiture of the lease; Wilson v. Pennsylvania Trust Co., C. C. A., 114 Fed. 742; Re H. M. Lasker Co., C. C. A., 251 Fed. 53; Ratshesky v. Whiting, C. C. A., 251 Fed. 268; even when there was a covenant to indemnify the landlord for damages in such a case. Re Shaffer, 124 Fed. 111. As to tenant's improvements. See Re O'Malley, 191 Fed. 999. But these decisions have not yet been approved by the Supreme Court of the United States. It has been held that sureties for rent, subsequently accruing, are not released by the bankruptcy of the tenant. Witthaus v. Zimmerman, 91 App. Div. (N. Y.) 202, 11 Am. B. R. 314. See Re Baker & Edwards, 224 Fed. 611. In a recent case the Supreme Court has said that damages for a tort which constitutes neither a breach of contract nor results in an unjust enrichment of the wrongdoer upon which a contract might be implied are not provable in bankruptcy. Schall v. Camors, 251 U. S. 239. Previous decisions of the inferior courts are to the same effect. Re Yates, 114 Fed. 365; Re

N. Y. Tunnel Co., 159 Fed. 688; S. C., C. C. A., 166 Fed. 284; Brown & Adams v. United Button Co., C. C. A., 8 L.R.A. <N.S.) 961, 149 Fed. 48; Re Hute hcraft, 247 Fed. 187. The case in the Supreme Court is distinguishable since it might have been decided upon another ground mentioned in the opinion. There is a possibility that this unjust doctrine which leaves without relief those most injured by the bankruptcy of corporations may not eventually prevail. Such claims which have been reduced to judgment before the petition in bankruptcy adjudication may be proved. Re Yates, 114 Fed. 365; Burnham v. Pidcock, 58 App. Div. (N. Y.) 273, 68 N. Y. Supp. 1007; Moore v. Douglas, C. C. A., 230 Fed. 399; Re Lockwood, 240 Fed. 159. It has been held that a verdict for damages is not a sufficient Liquidation to authorize the proof of the claim; Re Ostrom, 185 Fed. 988. That the liability for a statutory penalty cannot be proved. Re Southern Steel Co., 183 Fed. 498; even if it has been reduced to judgment, Re Abramson, C. C. A., 210 Fed. 878. Where the tort may be waived and the suit brought upon an express contract, or an implied contract deduced from an unjust enrichment, the claim for damages therefrom resulting may be proved, Crawford v. Burke, 195 U. S. 176, 49 L. ed. 147; Tindle v. Birkett, 205 U. S. 183, 51 L. ed. 762; Re Swift, 114 Fed. 947; Re Upson, 123 Fed. 807; Re Arnold & Co., 133 Fed. Brown & Adams v. United Co., C. C. A., 149 Fed. 48, ing Re United Button Co., 140 Fed. 495; Re Nuttall, 201 Fed.

789;

Button affirm.

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