In Central Trust Company v. Chicago Auditorium Association 50 in discussing the question whether on bankruptcy of a party to a bilateral contract before a breach the solvent party had a provable claim, the Supreme Court of the United States held that he had, and unquestionably any other decision would have been unfortunate.51 But in doing so the court held that 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," and answering this argument thus;52

45 See wpra, Sec. 1320.

46 Ford v. Tiley, 6 B. A C. 325.

47 16 Q. B. D. 460. But see New-sum v. Bradley, [1918] 1 K. B. 271.

48 Page 468. There were also other grounds of decision to which the present criticism is not intended to apply.

49 In Louisville Packing Go. v. Grain, 141 Ky. 379, 132 S. W. 575, a statement of probable inability was held a breach.

50 240 U. S. 581,36 Sup. Ct. Rep. 412, 60 L. Ed. 811, L. R. A. 1917 B. 580.

51 The difficulty in reaching this result was due to a failure of the Bankthe bankruptcy itself amounted to an anticipatory breach, saying: "It is argued that there can be no anticipatory breach*

"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." 53 Decisions of lower federal courts had previously taken the same ground.54 It is to be observed that in order to sustain the position that the bankruptcy operates As a breach of contract which gives ruptcy Statute to express clearly that contingent claims should be provable. Unmatured claims are not on that account unprovable (see infra, Sec. 1984), but in an unmatured bilateral contract where the promises are mutually dependent the obligation of each party depends on the continuing performance or ability to perform of the other party. Since the Supreme Court had already held that a contingent claim might nevertheless be provable, if it could be valued (Williams v. United States Fidelity, etc., Co., 236 U. S. 549, 59 L Ed. 713, 35 Sup. Ct. 289), there would seem to have been no difficulty in holding that though there had been 38 yet no breach of contract in the case of Central Trust Company v. Chicago Auditorium Assoc, there was nevertheless a provable claim. Such a claim though both unmatured and conditional is provable in England. Re Fits George, [1905] 1 K. B. 462.

52 Central Trust Co. v. Chicago Auditorium Assoc, 240 U. S. 581, 36 Sup. Ct. Rep. 412, 415, 60 L. Ed. 811, L. R. A. 1917 B. 580.

53 The decisions in bankruptcy denying proof of unmatured rent {infra, Sec. 1985), may be considered in this connection.

54 Ex parte Pollard, 2 Lowell, 411; In re Imperial Brewing Co., 143 Fed. 579; In re Inman, 175 Fed. 312, and after the decision of the Supreme Court the same doctrine was followed in Equitable Trust Co. v. Western Pacific Railroad, 244 Fed. 485, 250 Fed. 327, 162 C. C. A. 397, 246 U. S. 672, 62 L. Ed. 932, 38 S. Ct. Rep. 423. See also In re Mullings Clothing Co., 238 Fed. 58, 151 C. C. A. 134, L. R. A. 1918 A. 639, 252 Fed. 667.

a provable claim to the solvent party, it is necessary to assert that not the adjudication in bankruptcy but the petition is the breach, for only claims are provable which existed as provable claims at the time of the petition.55 It is for this reason that some courts have distinguished in this matter between a voluntary and an involuntary bankruptcy.56 In voluntary bankruptcy the debtor himself petitions and the adjudication follows immediately after. It is easier to regard such a voluntary petition as a repudiation than to regard the filing by a creditor of a petition in bankruptcy as such a repudiation. It is certainly difficult to see how a creditor can repudiate the debtor's contract for him. Moreover, if filing the petition is a repudiation on the theory that the debtor must at his peril keep his credit good, it seems equally a repudiation and breach of contract whether the petition is ultimately sustained and followed by an adjudication in bankruptcy or not. A further objection to the theory that bankruptcy whether involuntary or voluntary is a breach of contract, arises from the well-settled doctrine that the trustee in bankruptcy may adopt the obligations of the bankrupt under a contract and thereby become entitled to the benefits of the contract on behalf of the estate.57 On any sound principle, the trustee can have no greater rights than the bankrupt and if there has been repudiation or material breach, it seems impossible to deny the solvent party the right to refuse to proceed with the contract even though the trustee in bankruptcy subsequently desires to adopt it.