All claims which are of a provable kind are provable and allowable whether due or not.
In bankruptcy, it is not necessary that a claim be due in order to be proved. It need only be owing.148
148. Germania S. B. & T. Co. v. Loeb, (C. C. A. 6th Cir.) 188 Fed. 285; In re Percy Ford Co. (D. C. Mass.) 199 Fed. 334.
A claim is not provable unless it is owing before the petition is filed.
A claim need not be mature but at least must be owing before the petition is filed. As the trustee takes the title to property owned by the bankrupt prior to the filing of the petition and not property acquired after that time, so claims arising before but not after the filing of the petition are provable. As stated, they need not be due, but they must be owing. The line of cleavage between the old and the new life both in respect to property going to the trustee and debts dischargeable is through the day the petition is filed. It is true of course that costs of administration, etc., arising after the petition is filed are payable out of the assets in the hands of the trustee. This must be so in the nature of the case.
A claim consisting in a judgment secured prior to the filing of the petition is a claim provable in bankruptcy.
Considering now a judgment irrespective of its effect to give a lien (and the lien thereof is dissolved when the judgment is entered within the four months' period) such judgment represents a claim that is provable as a debt of the estate.
Notes and debts due under written instruments are provable in bankruptcy.
This is the express provision of the law. These, with indebtedness for goods sold, for services rendered, and on open account, make up the vast majority of commercial claims.
Rents to accrue are not provable.
Rent which has accrued prior to the filing of the petition is provable against the estate, but rent to accrue thereafter is not provable.149
Such are provable.
The act recites that claims founded on "open account" are provable.
Under this provision a claim for damages arising out of the breach of a contract, has been sustained.150
See next section that claims arising out of tort, not reduced to judgment, are not provable, but if it is a case in which the party damaged may elect to sue in tort or in contact, he may "waive the tort and sue in contract."151
Is the act of bankruptcy a breach of an executory contract where such bankruptcy makes it impossible for the bankrupt to perform? And, if so, are the damages thereby sustained, provable in bankruptcy? This has been a mooted question, but some late decisions seem to favor it. In Central Trust Co. v. Chicago Auditorium, 240 U. S. 581 (1916) the court says: "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 the court held that the bankruptcy (although involuntary) constituted a breach and damages were provable. See also Heyward v. Goldsmith, (C. C. A. 3rd Cir.) 269 Fed. 946.
149. In re Mullins Clothing Co. (D. C. Conn.) 230 Fed. 681.
150. In re Stern, (C. C. A. 2nd Cir.) 116 Fed. 604.
151. First Nat. Bk. v. Bamforth, 37 A. B. R. (Vt.) 315; 269 Fed. 123, 251 U. S. 239.
(1) WHEN PROVABLE. If a claim is unliquidated at the time the petition in bankruptcy is filed, it may thereafter be liquidated, proved, and allowed, provided it is in the class of provable claims.
SEC. 63 of the Act after reciting the sorts of claims that are provable provides: "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."
This has always been construed to mean merely that if claims of the kind mentioned above this provision (see SEC. 64-68 supra) are unliquidated, they are not for that reason not provable, but may be liquidated and proved; but this paragraph does not mean to allow generally all unliquidated claims. It does not include a new class of claims, but merely refers to the claims enumerated in the act.
But damages arising out of breach of contract can be liquidated by the bankruptcy court and proved.
(2) WHEN NOT PROVABLE. An unliquidated claim for damages for the commission of a tort, not yet reduced to judgment, is not provable.
A claim arising out of the commission of a tort, not yet liquidated by agreement or judgment, is not provable,152 and therefore not dischargeable. But if reduced to judgment it is provable153 and would in that event be dischargeable unless the injury was wilful or malicious.
Fines levied as a punishment by a court are not provable.
Bankruptcy proceedings in no way affect fines adjudged against a bankrupt.