ments after the filing of the petition and before the consideration of the bankrupt's application for a discharge, less costs incurred and interests accrued after the filing of the petition and up to the time of the entry of such judgments.

b. Unliquidated claims against the bankrupt may, pursuant to application to the court, be liquidated in such manner as it shall direct, and may thereafter be proved and allowed against his estate.

A. What Claims Provable in Bankruptcy.

§ 852. In respect to whether due or not.

§ 853. In respect to whether owing before or after petition filed.

§ 854. Claims based upon judgments.

§ 855. Fixed liabilities as evidenced by written instruments.

§ 856. Rents to accrue.

§ 857. Claims founded on open accounts.

§ 858.

Claims arising on any contract express or implied for payment of money.

§ 859. Unliquidated claims (1) When provable.

§ 860. Unliquidated claims (2) When not provable.

§ 852. (Bankruptcy, Sec. 62.) In respect to whether claim is due or not.

(Note: A debt is provable whether due or not at the time of bankruptcy. Being provable, it must be proved; otherwise it is dischargeable as though it had been proved.)

§ 853. (Bankruptcy, Sec. 63.) In respect to whether owing before or after the petition is filed.

(Note: A debt to be provable or in any manner affected by the bankruptcy proceedings need not be due, but must be "owing." The day of bankruptcy is here, as in case of assets, the day of cleavage. Debts arising after the petition is filed are not provable. But see § 858 herein as to the operation of the petition as a breach of executory contracts.)

§ 854. (Bankruptcy, Sec. 64.) Claims based upon judgments.

(Note: Judgments secured prior to bankruptcy proceedings are provable; although the lien thereof is discharged if obtained

within the four months period. See § 860 post, to the effect that judgments are provable (and therefore must be proved) even if obtained upon unliquidated claims that would not have been provable if no judgment had been obtained prior to the proceedings.)

§ 855. (Bankruptcy, Sec. 65.) Fixed liabilities as evidenced by written instruments.

(Note: This refers to forms of indebtedness as set forth in notes, leases, or any other written instrument setting forth a fixed liability.)

§ 856. (Bankruptcy, Sec. 66.)

Rents.

(Note: Rents to accrue are not provable. Even under the doctrine that a petition in bankruptcy is a breach of an executory contract, ren to accrue are not provable. However, it has been held that where the lease was broken prior to bankruptcy proceedings and the landlord re-let at reduced rental, he had a provable claim for the difference. In re Mullins Clothing Co. 238 Fed. 58 (C. C. A. 2nd Cir.). The landlord would have had a right to sue for damages, and these damages he could prove in bankruptcy. The court said "we do not overlook the doctrine that a covenant to pay rent creates no debt until the time stipulated for the payment arrives and therefore that rent accruing under a lease after the filing of the petition in bankruptcy against the lessee is not provable against his estate as a fixed liability absolutely owing at the time of the filing of the petition."

The trustee may claim the lease as an asset, or reject it if he chooses. He may take possession for a reasonable time without thereby electing to accept the lease. If he accepts he may assign it, with the consent of the court, notwithstanding a provision in the lease against assignment or subletting.)

§ 857. (Bankruptcy, Sec. 67.) Claims founded on open

accounts.

(Note: These are perhaps the most common sorts of claims provable against bankrupt mercantile concerns. There is very little need for discussion. Payments made by the debtor on open account are not preferential payments where the net result is not to diminish the estate.)

§ 858. (Bankruptcy, Sec. 68.) Claims arising upon any contract express or implied for the payment of money.

Case 819. Central Trust Company v. Chicago Auditorium, 240 United States, 581.

MR. JUSTICE PITNEY delivered the opinion of the court: "On July 22, 1911, a creditors' petition in bankruptcy was filed against the Frank E. Scott Transfer Company, an Illinois corporation, and it was adjudged a bankrupt on August 7. The act of bankruptcy charged and adjudicated does not appear. When the proceedings were commenced, the bankrupt held contract relations with the Chicago Auditorium Association under a written agreement made between them February 1, 1911, which had been partially performed. By its terms the Association granted to the Transfer Company, for a term of five years from the date of the contract, the baggage and livery privilege of the Auditorium Hotel, in the City of Chicago, that is to say, the sole and exclusive right, so far as it was within the legal capacity of the Association to grant the same, to transfer baggage and carry passengers to and from the hotel and to furnish livery to its guests and patrons. For the baggage privilege the Transfer Company agreed to pay to the Association the sum of $6,000, in monthly instalments of $100 each, and for the livery privilege the sum of $15,000 in monthly instalments of $250 each, and also agreed to furnish to the hotel and its guests and patrons prompt and efficient baggage and livery service at reasonable rates at all times during the continuance of the privileges, It was further agreed as follows:

"The party of the first part (Chicago Auditorium Association), however, reserves the right, which is an express condition of the foregoing grants, to cancel and revoke either or both of said privileges, by giving six months' notice in writing of its election so to do, whenever the service is not, in the opinion of the party of the first part, satisfactory, or in the event of any change

in management of said hotel; and in case of the termination of either or both of said privileges by exercise of the right and option reserved by this paragraph, such privilege or privileges shall cease and determine at the expiration of the six months' notice aforesaid, and both parties hereto shall in that case be released from further liability respecting the concession so cancelled and revoked.

"Said rights and concessions shall not be assignable without the express written consent of the party of the first part, nor shall the assignment of the same, with such written consent, relieve the party of the second part (Scott Transfer Company) from liability on the covenants and agreements of this instrument.'

"The contract authorized the Association, in the event of default by the Transfer Company in the payment of any installment of money due, or in the performance of any other covenant, if continued for thirty days, to terminate the privileges at its option, without releasing the Transfer Company from liability upon its covenants. Should either or both of the privileges be thus terminated before January 31, 1916, the Association was to be at liberty to sell the privileges, or make a new or different contract for the remainder of the term, but was not to be obliged to do this, and the Transfer Company, unless released in writing, was to remain liable for the entire amount agreed to be paid by it.

"Up to the time of the bankruptcy this contract remained in force, and neither party had violated any of its covenants. The trustee in bankruptcy did not elect to assume its performance, and the Association entered into a contract with other parties for the performance of the baggage and livery service and obtained therefrom the sum of $234.69 monthly as compensation for those privileges. On February 28, 1912, it exhibited its proof against the bankrupt estate, claiming an indebtedness of $6,537.94, of which $311.20 had accrued prior to the bankruptcy proceedings, and the remainder was claimed as unliquidated damages arising under the con

tract for alleged breach thereof on the part of the bankrupt through the bankruptcy proceedings. Of this amount $691.86 represented the loss incurred during the first six months of bankruptcy. Objections filed by the trustee were sustained by the referee, except as to that portion of the claim which had accrued prior to the bankruptcy proceedings. On review, the District Court sustained this decision. On appeal to the Circuit Court of Appeals, the order of the District Court was reversed, and the cause remanded with direction to allow $691.86 upon the claim, and to disallow the remaining portion. 216 Fed. Rep. 308.

"An appeal to this court by the trustee in bankruptcy was allowed, under 25b-2 of the Bankruptcy Act (of July 1, 1898, c. 541; 30 Stat. 544, 553), upon a certificate by a Justice of this court that the determination of the questions involved was essential to a uniform construction of the Act throughout the United States.

66#

"Coming to the merits: It is no longer open to question in this court that, as a rule, where a party bound by an executory contract repudiates his obligations or disables himself from performing them before the time for performance, the promisee has the option to treat the contract as ended, so far as further performance is concerned, and maintain an action at once for the damages occasioned by such anticipatory breach. The rule has its exceptions, but none that now concerns us. Roehm v. Horst, 178 U. S. 1, 18, 19. And see O'Neill v. Supreme Council, 70 N. J. L. 410, 412. There is no doubt that the same rule must be applied where a similar repudiation or disablement occurs during performance. Whether the intervention of bankruptcy constitutes such a breach and gives rise to a claim provable in the bankruptcy proceedings is a question not covered by any previous decision of this court, and upon which the other Federal courts are in conflict. It was, however, held in Lovell v. St. Louis Life Ins. Co., 111 U. S. 264, 274, where a life insurance company became insolvent and transferred