its assets to another company, that a policy-holder was entitled to regard his contract as terminated and demand whatever damages he had sustained thereby. And see Carr v. Hamilton, 129 U. S. 252, 256. In support of the provability of the claim in controversy, Ex parte Pollard, 2 Low, 411; Fed. Cas. No. 11,252; In re Swift (C. C. A. 1st), 112 Fed. Rep. 315, 319, 321; In re Stern (C. C. A. 2d), 116 Fed. Rep. 604; In re Pettingil & Co. (D. C., Mass.), 137 Fed. Rep. 143, 146, 147; In re Neff (C. C. A. 6th), 157 Fed. Rep. 57, 61, are referred to; and see Pennsylvania Steel Co. v. New York City Ry. Co. (C. C. A. 2d), 198 Fed. Rep. 721, 736, 744. To the contrary, In re Imperial Brewing Co. (D. C., Mo.), 143 Fed. Rep. 579; In re Inman & Co. (D. C., Ga.), 171 Fed. Rep. 185; S. C. 175 Fed. Rep. 312; besides which a number of cases arising out of the relation of landlord and tenant are cited: In re Ells, 98 Fed. Rep. 967; In re Pennewell, 119 Fed. Rep. 139; Watson v. Merrill, 136 Fed. Rep. 359; In re Roth & Appel, 181 Fed. Rep. 667; Colman Co. v. Withoft, 195 Fed. Rep. 250. Cases of the latter class are distinguishable, because of the 'diversity between duties which touch the realty, and the mere personalty.' Co. Litt., 292, b, 513.

"The contract with which we have to deal was not a contract of personal service simply, but was of such a nature as evidently to require a considerable amount of capital, in the shape of equipment, etc., for its proper performance by the Transfer Company. The immediate effect of bankruptcy was to strip the company of its assets, and thus disable it from performing. It may be conceded that the contract was assignable, and passed to the trustee under 70a (30 Stat. 565), to the extent that it had an option to perform it in the place of the bankrupt (see Sparhawk v. Yerkes, 142 U. S. 1, 13; Sunflower Oil Company v. Wilson, 142 U. S. 313, 322); for although there was a stipulation against assignment without consent of the Auditorium Association, it may be assumed that this did not prevent an assignment by operation of law. Still, the trustee in bankruptcy did

not elect to assume performance, and so the matter is left as if the law had conferred no such election.

"It is argued that there can be no anticipatory breach of a contract except it result from the voluntary act of one of the parties, and that the filing of an involuntary petition in bankruptcy, with adjudication thereon, is but the act of the law resulting from an adverse proceeding instituted by creditors. This view was taken, with respect to the effect of a state proceeding restraining a corporation from the further prosecution of its business or the exercise of its corporate franchises, appointing a receiver, and dissolving the corporation, in People v. Globe Ins. Co., 91 N. Y. 174, cited with approval in some of the Federal Court decisions above referred to. In that case, it did not appear that the company was the responsible cause of the action of the State, so as to make the dissolution its own act; but, irrespective of this, we cannot accept the reasoning. As was said in Roehm v. Horst, 178 U. S. 1, 19:

"The parties to a contract which is wholly executory have a right to the maintenance of the contractual relations up to the time for performance, as well as to a performance of the contract when due.' Commercial credits are, to a large extent, based upon the reasonable expectation that pending contracts of acknowledged validity will be performed in due course; and the same principle that entitles the promisee to continued willingness entitles him to continued ability on the part of the promisor. In short it must be deemed an implied term of every contract that the promisor will not permit himself, through insolvency or acts of bankruptcy, to be disabled from making performance; and, in this view, bankruptcy proceedings are but the natural and legal consequence of something done or omitted to be done by the bankrupt, in violation of his engagement. It is the purpose of the Bankruptcy Act, generally speaking, to permit all creditors to share in the distribution of the bankrupt, and to leave the honest debtor thereafter free from liability upon previous obligations. Williams

v. U. S. Fidelity Co., 236 U. S. 549, 554. Executory agreements play so important a part in the commercial world that it would lead to most unfortunate results if, by interpreting the Act in a narrow sense, persons entitled to performance of such agreements on the part of the bankrupts were excluded from participation in bankrupt estates, while the bankrupts themselves, as a necessary corollary, were left still subject to action for non-performance in the future, although without the property or credit often necessary to enable them to perform. We conclude that proceedings, whether voluntary or involuntary, resulting in an adjudication of bankruptcy, are the equivalent of an anticipatory breach of an executory agreement, within the doctrine of Roehm v. Horst, supra.

"The claim for damages by reason of such a breach is 'founded upon a contract, express or implied' within the meaning of 63a-4, and the damages may be liquidated under 63b. Grant Shoe Co. v. Laird, 212 U. S. 445, 448. It is true that in Zavelo v. Reeves, 227 U. S. 625, 631, we held that the debts provable under 63a-4 include only such as existed at the time of the filing of the petition. But we agree with what was said in Ex parte Pollard, 2 Low, 411, Fed. Cas. No. 11,252, that it would be 'an unnecessary and false nicety' to hold that because it was the act of filing the petition that wrought the breach, therefore, there was no breach at the time of the petition. And as was also declared in In re Pettingill, 137 Fed. Rep. 143: 'The test of provability under the Act of 1898 may be stated thus: If the bankrupt, at the time of bankruptcy, by disenabling himself from performing the contract in question, and by repudiating its obligation, could give the proving creditor the right to maintain at once a suit in which damages could be assessed at law or in equity, then the creditor can prove in bankruptcy on the ground that bankruptcy is the equivalent of disenablement and repudiation. For the assessment of damages proceedings may be directed by the court under 63b (30 Stat. 562).' It was in effect so ruled by

this court in Lesser v. Gray, 236 U. S. 70, 75, where it was said: 'If, as both the bankruptcy and 'state courts concluded, the contract was terminated by the involuntary bankruptcy proceeding, no legal injury resulted. If, on the other hand, that view of the law was erroneous, then there was a breach and defendant Gray became liable for any resulting damage; but he was released therefrom by his discharge.' Of course, he could not be released unless the debt was provable.

"We therefore, conclude that the Circuit Court of Appeals was correct in holding that the intervention of bankruptcy constituted such a breach of the contract in question as entitled the Auditorium Association to prove its claim.

"The denial of all damages except such as accrued within six months after the filing of the petition was based upon the ground that the contract reserved to the Association an option to revoke the privileges by giving six months' notice in writing of its election so to do, in which case both parties were to be released from further liability at the expiration of the six months. Here the obligation of the bankrupt was clear and unconditional. The right reserved to the Auditorium Association to cancel and revoke the privileges was reserved for its benefit, not that of the grantee of those privileges. It does not lie in the mouth of the latter, or of its trustee, to say that its service would not be satisfactory, and there is no presumption that otherwise it would have been advantageous to the Association to exercise the option. It results that the decree, in so far as it limits the provable claim to a period of six months after the bankruptcy, must be reversed, and the cause remanded for further proceedings in conformity with this opinion."

Question 819: What is anticipatory breach of contract? If a party to a contract is put into bankruptcy so that he is thereby disabled from performing such contract, is the other party to the contract entitled to file in the bankruptcy proceedings his claim for damages caused by the breach? Illustrate by the facts in this case.

§ 859. (Bankruptcy, Sec. 69.) Unliquidated claims. (1) When provable.

(Note: After enumeration of the claims in Bankruptcy, the act provides: "Unliquidated claims against the bankrupt may, pursuant to application to the court be liquidated in such a manner as it shall direct, and may thereafter be proved and allowed against his estate." This has always been held not to extend the class of claims provable but merely to provide for the liquidation of those that come within the enumerated classes. For instance, if arising upon contracts, express or implied, they may be liquidated by the court. See next section for unliquidated claims that are not provable.)

860. (Bankruptcy, Sec. 70.) Unliquidated claims. (2) When not provable.

Case 820. Schall v. Camorrs, 251 United States, 239. Facts: Claim filed by Muller, Schall & Company against LeMore and Carriere, partners, bankrupts, based upon commission of a tort (fraud) not reduced to judgment.

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MR. JUSTICE PITNEY: The first and fundamental question is whether a claim for unliquidated damages, arising out of a pure tort which neither constitutes a breach of an express contract nor results in any unjust enrichment of the tort-feasor that may form the basis of an implied contract, is provable in bankruptcy.

*

"That clause b [Sec. 63] provides the procedure for liquidating claims provable under clause a, if not already liquidated, especially those founded upon an open account, or a contract express or implied, is entirely clear, and has been recognized repeatedly in our decisions. Grant Shoe Co. v. Laird Co., 212 U. S. 445, 447-448; Central Trust Co. v. Chicago Auditorium Assn., 240 U. S. 581, 592. Has it the further effect of admitting all unliquidated claims including those of tortious origin?

66* * * Since claims founded upon an open account or upon a contract express or implied often require to be liquidated some provision for procedure evidently