termination of the lease, since in such a case the damages, if any, could not be ascertained until the term of the lease had expired as originally limited, or there had been a reletting.279 A provision in a lease, authorizing the landlord to re-enter upon the bankruptcy of the tenant, and permitting the landlord to recover the difference between the rent reserved and the rent collected by the landlord from other sources, does not enable the landlord to prove a claim for rent accruing subsequent to the bankruptcy of the tenant.280 If the trustee 279. In re Shaffer (D. C., Mass.), 10 Am. B. R. 633, 124 Fed. 111; In re Ells (D. C., Mass.), 3 Am. B. R. 564, 98 Fed. 967; Evans v. Lincoln Co., 10 Am. B. R. 401, 204 Pa. St. 448, 54 Atl. 321. A claim for rent contingent upon the election of the lessor to enter and terminate the lease or to demand damages is not provable. Cotting v. Hooper, Lewis & Co., 34 Am. B. R. 23, 107 N. E. 931. Effect of landlord's right to re-enter. - Where bankrupt held under a lease authorizing the landlord to re-enter upon default in the payment of rent, and providing that bankrupt should surrender the premises upon breach of the covenant to pay rent, and it appeared that bankrupt had defaulted in payment of rent before bankruptcy intervened, a claim for rent accruing after the filing of the bankruptcy petition is not a debt due and owing to the landlord when the petition was filed, and therefore is not provable in the bankruptcy proceedings of the lessee. In re Abrams (D. C., Iowa), 29 Am. B. R. 590, 200 Fed. 1005. Claim against tenant for rent after surrender. Where before the filing of a petition in bankruptcy against a tenant, a levy was made upon his personal property, and subsequently the landlord accepted a surrender of the premises, he cannot claim against the bankrupt estate of the tenant for the whole of the unexpired term of the lease, although it provided that upon a levy against the tenant the whole rent for the unexpired portion of the term should become due. Matter of Heilbron Brothers (D. C., Pa.), 35 Am. B. R. 568, 226 Fed. 803. Where a bankrupt's trustee elects to give up the lease and the landlord's agent re-enters, but agrees to permit the occupancy of the premises pending the determination of a controversy as to the ownership of certain personal property located on the premises, the lease is nevertheless terminated, and the estate is not liable for the rent. In re Desmond & Co. (D. C., Ala.), 28 Am. B. R. 456, 198 Fed. 581. Where, after a tenant's receiver in bankruptcy had sold personal property which was upon premises leased by a bankrupt for one year, allowing the purchaser a reasonable time within which to remove the goods, the landlord, acting under a provision in the lease, instituted ejectment proceedings against the purchaser, wherein he declared that the lease had absolutely ceased and determined, and he was put in possession of the premises under a writ issued in such ejectment proceedings, his claim for rent for the unexpired term of the lease will be disallowed. South Side Trust Co. v. Watson (C. C. A., 3d Cir.), 29 Am. B. R. 446, 20 Fed. 50; Followed in Matter of Lasker Co. Inc. (C. C. A., 3d Cir.), 42 Am. B. R. 234, 251 Fed. 53. 280.. Matter of Roth & Appel (D. C., N. Y.), 22 Am. B. R. 504, 174 Fed. 64, 24 Am. B. R. 588, 181 Fed. 667; In re Abrams (D. C., Iowa), 29 Am. B. R. 590, 200 Fed. 1005; Matter of Mullings Clothing Co. (D. C., Conn.), 41 Am. B. R. 756, 252 Fed. 667. Re-entry and recovery of damages elects to assume the lease and sell the same and the landlord acquiesces, the trustee steps into the bankrupt's shoes, and the question here discussed will not arise.281 The trustee, however, usually retains possession for a brief period, paying on a quantum meruit basis meanwhile.282 (2) PERSONAL PROPERTY.— The principles applicable to rent due for the occupancy of real property do not apply to the same extent in the case of a lease of personal property, where by the terms of the lease the whole amount becomes due in case of a default; and it appears that most of the property will be practically worthless after removal by the vendor. In such a case the lessor may prove his claim for the whole amount due as a fixed liability." 283 But it seems that this rule does not apply where it is not shown that the property is practically valueless after being removed from the vendee's premises, since to apply the rule in such a case would be too much in the nature of a penalty or forfeiture.284 in case of bankruptcy.- Where a landlord's claim was founded upon a provision in his lease to bankrupt that if the tenant should petition to be or be declared bankrupt, the landlord might enter into and repossess the premises and terminate the lease, in which case the tenant agreed to pay to the landlord, as damages, a sum which at the time of such termination represented the difference between the rental value of the premises and the rent and other payments therein, named for the residue of the term, the claim was not provable, since there was no "fixed liability . . absolutely due and owing at the time of filing the petition" in bankruptcy, the lease being terminable by the entry of the landlord, which by the terms of the lease could not be made until after bankruptcy. Slocum v. Soliday (C. C. A., 1st Cir.), 25 Am. B. R. 460, 183 Fed. 410. 281. Matter of Sherwoods, Inc. (C. C. A., 2d Cir.), 31 Am. B. R. 769, 210 Fed. 754; In re Sapinsky & Sons (D. C., Ky.), 30 Am. B. R. 416, 206 Fed. 523. 282. Matter of Frazin & Oppenheim (C. C. A., 2d Cir.), 24 Am. B. R. 903, 183 Fed. 28. Reynolds v. Hourigan (C. C. A., 3d Cir.), 43 Am. B. R. 75, 254 Fed. 690. See discussion under section 70 of this work, subtitle "Leases." 283. Matter of Caswell-Massey Co. (D. C., N. Y.), 31 Am. B. R. 426, 208 Fed. 573. Return on cancellation of lease by lessor when property was obtained by a bankrupt under a lease terminable at the option of the lessor, and the lessee agreed to pay on the termination of the lease a fixed return charge, it was held that the lessor having terminated the lease within the time for proving claims, his action in so doing created a fixed liability or ascertained amount presently payable provable under section 63 a (1) of the Bankruptcy Act. Matter of Clark Shoe Company (D. C., Mass.), 32 Am. B. R. 238, 211 Fed. 341. 284. In re Merwin & Willoughby Co. (D. C., N. Y.), 30 Am. B. R. 485, 206 Fed. 116. Amount due under lease of personal property. Where a storekeeper leases apparatus for conveying cash and carrying parcels under a contract providing that in case of default in making payments the whole amount shall VIII. TORT CLAIMS 295 a. Rule under former law. Our earlier bankruptcy acts invariably have been regarded as excluding from consideration unliquidated claims arising purely ex delicto.286 The law of 1867 permitted the liquidation of damages for conversion only.287 With the single exception next noted, other liabilities sounding in tort were not provable.288 Debts created by the fraud or embezzlement of the bankrupt were, by the terms of another section, made provable, but were also declared not dischargeable. 289 b. Rule under present law. The provisions allowing proof of claims for conversion, fraud and embezzlement were omitted from the present law. The amendment of 1903 to section 17-a (2), adding liabilities which shall not be dischargeable, was designed to limit more narrowly the effect of a discharge and was not intended to enlarge. the description of provable claims set forth in this section.290 It is now conclusively established that a claim for unliquidated damages is not a provable debt, when it arises out of a pure tort, that is, where there is no breach of an express contract, nor such enrichment of the wrongdoer as may form the basis for an implied contract." become due without notice or demand for the entire period of the lease, and that the lessor may upon the bankruptcy of the lessee enter the premises and take possession of the apparatus, and it appears that the lessee has defaulted in the payment of an installment of rent payable in advance, prior to his bankruptcy and that thereafter the lessor took possession of the apparatus thereby terminating the lease, the lessor is only entitled to prove his claim for the installment due at the date of the bankruptcy. Matter of Miller Bros. Grocery Co. (C. C. A., 6th Cir.), 33 Am. B. R. 704, 219 Fed. 851, revg. 31 Am. B. R. 430, 208 Fed. 573. 285. In England, see Williams Bankruptcy (12th ed.), p. 138. on 286. Black v. McClellan Fed. Cas. 1,462; Doggett v. Emerson, Fed. Cas. 3,962; Dusar v. Murgatroyd, Fed. Cas. 4,199; In re Hennocksburgh, Fed. Cas. 6,367. See Schall v. Camors (U. S. Sup. Ct.), 251 U. S. 239, 44 Am. B. R. 547, 40 Sup. Ct. 135, 64 L. Ed. 247. 287. Act of 1867, § 19, R. S., § 5061; In re Bailey, Fed. Cas. 729; In re Hennocksburgh, Fed. Cas. 6,367; Weaver v. Voils, 68 Ind. 191. 288. In re Schuchardt, Fed. Cas. 12,483; Gilman v. Cate, 63 N. H. 278. 289. Act of 1867, § 33, R. S., § 5117. 290. Schall, Jr. v. Camors, 251 U. S. 239, 44 Am. B. R. 547, 40 Sup. Ct. 135, 64 L. Ed. 247; Dunbar v. Dunbar, 190 U. S. 340, 10 Am. B. R. 139, 23 Sup. Ct. 757, 47 L. Ed. 1084; Matter of United Button Co. (D. C., Del.), 15 Am. B. R. 390, 140 Fed. 495. 291. Schall v. Camors (U. S. Sup. Ct.), 251 U. S. 239, 44 Am. B. R. 547, 40 Sup. Ct. 135, 65 L. Ed. 247; In re Hirschman (D. C., Utah), 4 Am. B. R. 715, 104 Fed. 69; In re Filer (Ref., N. Y.), 5 Am. B. R. 582; Matter of United Button Co. (D. C., Del.), 15 Am. B. R. 390, 140 Fed. 495, affd. sub nom. Brown & Adams v. United Button Co. (C. C. A., 3d Cir.), 17 Am. B. R. 565, 149 Fed. 48, 79 C. C. A., 70. Matter of Griffin (D. C., Mass.), 33 Am. B. R. 894, 188 Fed. 389; Boyd v. Applewhite (Miss. Sup. Ct.), 45 Am. But where the tortious act constitutes at the same time a breach of contract, or the tort-feasor obtains something of value for which an equivalent price ought to be paid, there may be a provable claim under subsection a (4).292 Matters regarding the effect of a discharge on liabilities for tort have been considered under § 17, ante. Judgments for torts, obtained prior to filing the petition in bankruptcy, are provable under subdivision a (1).293 c. Injuries to person or property.-A claim for unliquidated damages for personal injuries alleged to have been caused to a servant by the failure of a master to furnish safe appliances, arises ex delicto and is not of such a nature as to authorize a waiver of the tort and a recovery upon the quasi-contract, and is, therefore, not provable against the master's estate in bankruptcy.204 So, a judgment, in an B. R. 325, 84 So. 16; Matter of N. Y. Tunnel Co. (C. C. A., 2d Cir.), 20 Am. B. R. 25, 159 Fed. 688, 86 C. C. A. 556; Stalick v. Slack (C. C. A., 8th Cir.), 46 Am. B. R. 385, 269 Fed. 123. Claims for pure torts not provable. -In Schall v. Camors (U. S. Sup. Ct.), 44 Am. B. R. 547, 40 Sup. Ct. 135, the court, speaking through Mr. Justice Pitney, said: "Can it be supposed that the present Act was intended to depart so widely from the precedents as to include mere tort claims among the provable debts? Its sixty-third section does not so declare in terms, and there is nothing in the history of the Act to give ground for such an inference. It was the result of a long period of agitation, participated in by commercial conventions, boards of trade, chambers of commerce, and other commercial bodies. To say nothing of measures proposed in previous Congresses, a bill in substantially the present form was favorably reported by the committee on the judiciary of the House of Representatives in the first session of the Fifty-Fourth Congress. Having then failed of passage it was submitted again in the second session of the Fifty-Fifth Congress as a substitute for a Senate bill after disagreeing votes of the two houses, it went to conference and as the result of a conference report became law. It is significant that section 63, defining "Debts Which may be Proved," remained unchanged from first to last, except for a slight and insignificant variance in clause (5) in the final print; the word "interests having been substituted for "interest." House Rept. No. 1228, 54th Cong. 1st Sess., p. 39; House Rept. No. 65, 55th Cong., 2d Sess., p. 21; Senate Doc. No. 294, 55th Cong. 2d Sess., p. 22. Evidently the words of the section were carefully chosen; and the express mention of contractual obligations naturally excludes those arising from a mere tort. Since claims founded upon an open account or upon a contract, express or implied, often requires to be liquidated, some provision for procedure evidently was called for. Clause b. fulfills this function, and would have to receive a strained interpretation in order that it should include claims arising purely ex delicto. Such claims might easily have been mentioned if intended to be included. Upon every consideration we are clear that claims based upon a mere tort are not provable." 292. See under this section, ante, subtitle "Claims tortious in character based on contract." 293. See under this section ante, subtitle "Evidenced by a judgment.” 294. Matter of Urgniore & Sons Co. (Ref., Cal.), 10 Am. B. R. 661. See action commenced subsequent to the adjudication of the defendant, under an employer's liability act to recover for personal injuries, is not a provable claim against the bankrupt's estate. A claim for unliquidated damages, resulting from injury to the property of another, not connected with or growing out of any contractual relation, is not a provable debt in bankruptcy.296 But a claim for waste founded upon a covenant contained in a lease is a provable claim.297 The question as to whether a claim for personal injuries or injuries to property is dischargeable is considered under § 17, ante.298 IX. TAXES It has been thought better to treat under § 64, post, all matters relating both to the provability and priority of claims for taxes. X. DEBTS BARRED BY STATUTE OF LIMITATIONS 299 Debts barred by a statute of limitations are not provable. There was some conflict on this question under the law of 1867, high authority holding that the provability of such a debt turned on whether the statute of limitations urged against it went merely to the remedy or actually destroyed the obligation.300 But the weight of authority under that law was the other way." The cases under the present law are to the same effect.302 The reason for this doctrine seems to be one of abstract equity. Strictly, an outlawed debt is within the ante, subtitle "Claims tortious in character based on contract." 295. In re Crescent Lumber Co. (D. C., Ala.), 19 Am. B. R. 112, 154 Fed. 724. A claim by an employee for personal injuries, unliquidated and not reduced to judgment, until after the adjudication in bankruptcy of the employer, is not a debt provable in the bankruptcy proceedings. Eberlein v. Fidelity & Deposit Co. (Wis. Sup. Ct.), 37 Am. B. R. 614, 159 N. W. 553. A claim by the New York State Industrial Commission based upon an award against the bankrupt for personal injuries to an employe, made nearly seven months after bankruptcy and not reduced to judgment, is not provable under this section. Matter of Rockaway Soda Water Co. (D. C., N. Y.), 36 Am. B. R. 640. 301 296. Brown & Adams v. United Button Co. (C. C. A., 3d Cir.), 17 Am. B. R. 565, 149 Fed. 48, affg. 15 Am. B. R. 390, 140 Fed. 495. 297. See under this section, ante, subtitle "Leases." 298. See section 17, ante, subtitle "Wilful and malicious injuries to the person or property of another." 299. In England, see Williams on Bankruptcy (12th ed.), p. 147. 300. In re Ray, Fed. Cas. 11,589; In re Shepard, Fed. Cas. 12,753. 301. In re Kingsley, Fed. Cas. 7,819; In re Hardin, Fed. Cas. 6,048; In re Cornwall, Fed. Cas. 3,250; In re Reed, Fed. Cas. 11,635; In re Noeson, Fed. Cas. 10, 288. 302. In re Lipman (D. C., N. Y.), 2 Am. B. R. 46, 94 Fed. 353; In re Resler (D. C., Minn.), 2 Am. B. R. 602, 95 Fed. 804; In re Watkinson |