chase its capital stock.231 A contract or agreement made by directors of a corporation with an officer, to pay compensation for services rendered by such officer, unauthorized by the laws of the State under which the corporation was operating, is not the basis of a valid claim against the corporation.232 However, it has been held that an attorney may recover for the reasonable value of services rendered at the request of an officer and director of a corporation, and with knowledge of the other directors, although his employment was not the result of direct corporate action.233 Where a corporation has incurred a debt in excess of the amount authorized by its charter but the charter is subsequently amended to authorize debts in excess of the amount incurred such debt is provable.234 A claim of a foreign corporation against a bankrupt is provable, although the claimant has not complied with the laws of the State requiring the filing of certain papers with State officers, where it appears that the bankrupt has accepted the benefits of the contract.235

(10) IMPLIED CONTRACTS.- This means the same as quasi-contracts. A statutory liability may be contractual in its nature and

231. Matter of Sapulpa Produce Co. (Ref., Okla.), 26 Am. B. R. 900; In re Owen Pub. Co. (D. C., N. Y.), 20 Am. B. R. 639.

Agreement to repurchase capital stock. Where a corporation, when selling shares of the capital stock to claimant, agreed to repurchase the same after the expiration of three years, upon claimant's giving notice that he so desired, such contract is invalid and cannot be made the basis of a claim in the bankruptcy proceedings of the corporation, especially in view of section 664 of the New York Penal Law forbidding the purchase by a corporation of its capital stock except out of surplus profits arising from the business of the corporation. In re Tichenor-Grand Co. (D. C., N. Y.), 29 Am. B. R. 409, 203 Fed. 720. Compare Matter of National Piano Co. (D. C., Mass.), 42 Am. B. R. 111, 252 Fed. 950.

232. In re McCarthy Portable Elevator Co. (D. C., N. J.), 28 Am. B. R. 45, 196 Fed. 247, in which case it was also held that the mere rendition of

service does not necessarily carry the right to compensation; but where not performed on the request of the party sought to be charged therewith, the circumstances of its rendition must be such that, in law, it will be presumed to have been rendered for the benefit of such party and not the party rendering it.

233. Evidence of value of services. -An attorney who files a claim for services rendered a bankrupt corporation, must clearly establish the value of his services. And it seems that the value is to be fixed according to the standard of value in the State where the corporation was organized. Matter of United States Molybdenum Co. (D. C., Me.), 43 Am. B. R. 401, 255 Fed. 790.

234. In re Benedict Tea & Coffee Co. (D. C., Ky.), 27 Am. B. R. 409, 192 Fed. 1011.

235. Cobb v. McDonald-Weist Logging Co. (C. C. A., 9th Cir.), 48 Am. B. R. 173, 278 Fed. 165. Compare In re Montello Brick Works (D. C., Pa.), 20 Am. B. R. 855, 163 Fed. 621.

give rise to a provable claim as one based upon an implied contract; for instance it has been held that the liability of a stockholder of a banking corporation under a State statute, arises upon an implied contract, entered into when he acquires his stock, that he will be liable in the manner and to the extent prescribed by the statute.236 A claim for expenses incurred in securing the return of stock loaned to the bankrupt to be used as collateral to secure a loan is provable on the ground of implied contract for reimbursement.237 If a promise to pay in the form of a due bill is unenforceable because in violation of a State law, relative to the "doing of business" in a State by a foreign corporation, the claim may not be proved upon the theory of an implied contract.238

VI. JUDGMENTS ENTERED AFTER BANKRUPTCY 239

Subdivision 5 of subsection a permits the proof and allowance of debts "founded upon provable debts reduced to judgments after the filing of the petition and before the consideration of the bankrupt's application for a discharge, etc." This clause gives statutory recognition to the doctrine of Boynton v. Ball,240 which settled a controversy under the law of 1867, that outlasted the statute itself. The contention was that the debt, being merged in the judgment, and the latter post-dating the bankruptcy, became a new debt which could not be proved, and was, therefore, not discharged.241 There can now be no doubt. The debt, whether merged or not- and it seems it is not-may be proved in the form of the judgment, provided costs and interest after the bankruptcy are credited.242 But the judgment must (1) be founded upon a provable debt, and (2) be entered before "the consideration of the bankrupt's application for a discharge,' i. e., before the day on which the show cause order returnable thereon is called and heard.

236. Van Tuyl v. Schwab (N. Y. App. Div.), 38 Am. B. R. 161, 174 App. Div. 665, 161 N. Y. Supp. 326.

237. Walter v. Atha (C. C. A., 3d Cir.), 45 Am. B. R. 150, 262 Fed. 75.

238. In re Montello Brick Works (D. C., Pa.), 23 Am. B. R. 375, 174 Fed. 498.

239. For cases digested as to judg ments after petition is filed, see Am. Bankr. Dig., § 843.

240. 121 U. S. 457.

241. See In re Pinkel (Ref., N. Y.), 1 Am. B. R. 333; In re McBryde (D. C., N. Car.), 3 Am. B. R. 729, 90 Fed. 686; Chase v. Farmers & Merchants .Nat. Bank (C. C. A., 3d Cir.), 30 Am. B. R. 200, 202 Fed. 904.

242. Gordon v. Texas Co. (Me. Sup. Ct.), 45 Am. B. R. 157, 109 Atl. 368, citing Collier on Bankruptcy (4th ed.), 449.

VII. UNLIQUIDATED CLAIMS 243

a. In general.-Subsection b permits the liquidation, and subsequent proof and allowance, of an unliquidated claim against the bankrupt. This subsection adds nothing to the class of debts which may be proved under subsection a; its only purpose is to provide. the procedure for liquidating claims provable under that subsection if not already liquidated.244 It should be taken as evidence of an intent that contingent debts whose present value is capable of ascer-: tainment are provable and that those whose present value is not so capable of ascertainment are not provable.245 Only those claims can be admitted to proof under this provision which can be liquidated by legal proceedings instituted at the time of the bankruptcy,246 and if the nature of the claim is such that it can. only be liquidated in a court having exclusive jurisdiction conferred by statute, it cannot be proved.247

b. Liquidation, how accomplished. The proof of the claim, though unliquidated, may be filed, and thereupon the claim is before the court to be dealt with as the interests of the parties may require; there must be liquidation before proof by such means as the court or

243. In England, see Williams on Bankruptcy (12th ed.), p. 134.

244. Dunbar v. Dunbar, 190 U. S. 340, 349, 10 Am. B. R. 139, 47 L. Ed. 1084, 23 Sup. Ct. 757; Schall v. Camors (U. S. Sup. Ct.), 251 U. S. 239, 44 Am. B. R. 547, 40 Sup. Ct. 135, 64 L. Ed. 247; Matter of Hutchcraft (D. C., Ky.), 41 Am. B. R. 238, 247 Fed. 187; Matter of Roth & Appel (C. C. A., 2d Cir.), 24 Am. B. R. 588, 181 Fed. 667, affg. 22 Am. B. R. 504, 174 Fed. 64; In re Southern Steel Co. (D. C., Ala.), 25 Am. B. R. 358, 183 Fed. 498; Matter of Mullings Clothing Co. (C. C. A., 2d Cir.), 38 Am. B. R. 189, 238 Fed. 58, revg. on other grounds 37 Am. B. R. 166, 230 Fed. 681; Moore V. Douglas (C. C. A., 9th Cir.), 36 Am. B. R. 740, 230 Fed. 399, affg. 34 Am. B. R. 823, 225 Fed. 683.

An unliquidated claim will only be allowed under section 63-b, upon application to the court to direct the manner of liquidation. In re Silver

man Bros. (D. C., Mo.), 4 Am. B. R. 83, 101 Fed. 219.

245. Dunbar v. Dunbar, 190 U. S. 340, 10 Am. B. R. 139, 47 L. Ed. 1084, 23 Sup. Ct. 757; Matter of Hutchcraft (D. C., Ky.), 41 Am. B. R. 238, 247 Fed. 187.

246. Taxes and premiums of insurance, if they are not a fixed liability, are not such unliquidated claims against the bankrupt as can be proved. Matter of Pittsburg Drug Co. (D. C., Pa.), 20 Am. B. R. 227, 237, 164 Fed. 482.

Form of order for liquidation of claim, see Supplementary Forms, No.: 221, Vol. III, post.

247. In re Hawley (D. C., Wash.), 28 Am. B. R. 58, 194 Fed. 751, in which a claim by a subcontractor against a United States contractor, based upon the bond given by the contractor, was held not provable, because under the statute requiring the bond actions thereon can only be brought in the circuit court.

referee may direct.248 Unliquidated claims may be liquidated either by a hearing before the referee, by a plenary suit in any court of competent jurisdiction, or by permitting a pending action upon such claims to proceed to judgment.249. If it seems best the referee may withhold action on the claim or postpone the dividend thereon until the status of the claim is fully determined.250 It is not necessary to declare the rules for determining the amount due upon unliquidated claims; ordinarily such determination will be based upon the principles controlling the ascertainment of damages in other cases where there have been breaches of contractual obligations.251

c. Contingent liabilities.252-There is a broad distinction between "unliquidated damages" and "contingent liabilities. The phrase "unliquidated claims" may refer to both. The former law provided for the liquidation of contingent debts and liabilities,254 and the cases

under it, as well as those under its predecessor, drew a clear distinction between demands whose existence depended on a contingency and existing demands where the cause of action depended on a contingency; the former not being provable in any event and the latter only when liquidated.255 While, under the present law, contingent contractual obligations, other than the contingent liabilities of indorsers and sureties,256 may not be proved,257 yet if liabilities there