the bankruptcy itself amounted to an anticipatory breach, saying: "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," and answering this argument thus; 52

"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, § 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 as 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 con

ditional is provable in England. Re Fitz 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, § 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. 539, 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.

§ 1328 There can be no anticipatory breach of unilateral obligations.

If the reasoning suggested in Frost v. Knight 58 and adopted by the Supreme Court of the United States 59 for the doctrine of anticipatory breach is accepted, namely, that a contract gives immediately an inchoate right to the performance of the

55 See infra, § 1984.

56 In re Imperial Brewing Co., 143 Fed. 579; In re Inman, 175 Fed. 312. But see contra, In re Pettingill, 137 Fed. 143.

57 See supra, § 880. This difficulty

was suggested by the court in Wolins v. Conrad, 172 N. Y. S. 216.

58 L. R. 7 Ex. 111.

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

bargain, which becomes complete when the time for performance has arrived; giving, in the meantime, a right to have the contract kept open as a subsisting and effective contract, the reasoning is as applicable to unilateral obligations to pay money, for instance by promissory note, as to any other form of contract. Indeed, the right to the unimpeached efficacy of the obligation before its maturity, is perhaps as desirable in the case of a promissory note as in any other case which can be put; yet it is probable that no court would enforce a promissory note prior to the date of its maturity.60 And it seems also unlikely that a unilateral promise for executed consideration to pay money at a future day can be enforced until that day arrives; 60 nor is it easy to draw a distinction between unilateral promises to pay money and unilateral promises for other performances. The distinction, therefore, taken by the Court of Appeals of New York,61 and approved by the Supreme Court of the United States,62 will probably be generally adopted. It was said by the latter court: 63 "It is not intimated that in the bald case of a party bound to pay a promissory note which rests in the hands of the payee, but which is not yet due, such note can be made due by any notice of the maker that he does not intend to pay it when it matures. We decide simply this case where there are material provisions and obligations interdependent. In such case, and where one party is bound, from time to time, as expressed, to deliver part of an aggregate and specified amount of property to another, who is to pay for each parcel delivered at a certain time and in a certain way, a refusal to be further bound by the terms of the contract or to accept further deliveries, and a refusal to give the notes already demandable for a portion of the property that has been delivered, and a refusal to give any more notes at any time or for any purpose in the future, or to pay moneys at any time, which are eventually to be paid under the contract, all this constitutes a

"Roehm v. Horst, 178 U. S. 1, 17, 44 L. Ed. 953, 20 Sup. Ct. 780; Benecke r. Haebler, 38 N. Y. App. D. 344, 58 N. Y. S. 16, aff'd without opinion, 166 N. Y. 631, 60 N. E. 1107.

Werner v. Werner, 169 N. Y. App. D. 91 154 N. Y. S. 570.

61 Nichols v. Scranton Steel Co., 137 N. Y. 471, 487, 33 N. E. 561.

62 Roehm v. Horst, 178 U. S. 1, 17, 44 L. Ed. 953, 20 Sup. Ct. 780.

63 Ibid.

breach of the contract as a whole, and gives a present right of action against the party so refusing to recover damages which the other may sustain by reason of this refusal." 64

§ 1329. Independent obligations.

As independent promises in a bilateral contract are in effect separate unilateral obligations, a rule which forbids enforcement of anticipatory repudiation as a breach in unilateral contracts also forbids such treatment in case of an independent obligation in a bilateral contract.65 Therefore when a tenant repudiates a lease, the landlord cannot at once sue for future rent.66

For the same reason a seller of goods in a jurisdiction where, after a wrongful refusal of the goods by the buyer, the seller under an executory contract may treat the goods as the buyer's and recover the full price,67 cannot be allowed this remedy for an anticipatory repudiation by the buyer before an agreed period of credit has expired. The seller may sue at once for damages based on the difference between the market price and the contract price, but he can not recover the full price. In a jurisdiction which treats a lease like a bilateral contract with dependent promises," a landlord on an anticipatory repudiation of the lease might similarly have the right to recover the difference between the agreed rent and the rental value of the premises.70

§ 1330. Repudiated contract of insurance.

The uncertainty which marks the boundaries of the doctrine of anticipatory breach is well illustrated by three cases which arose in the States of Massachusetts, New Jersey and New York, respectively, on precisely the same facts. The Legion of Honor, a beneficiary society, issued a number of insurance policies and subsequently undertook by a change in its by-laws to increase the assessment payable by policy holders in order to continue their policies. A holder of an unmatured policy thereupon brought suit against the society in each of the States

Nicholes v. Swift, 118 Ga. 922, 45 S. E. 708. Viewing the action as one for rent, it is not distinguishable, in principle, from Tatum v. Ackerman, 148 Cal. 357, 83 Pac. 151, 3 L. R. A. (N. S.) 908, 113 Am. St. Rep. 276.'" In this connection also may be considered the decisions in bankruptcy denying proof of unmatured rent (infra, 1985) if a petition in bankruptcy is to be regarded as equivalent to repudiation (see supra, § 1327).

tion of the contract in toto by the vendee is no waiver of the single stipulation as to credit. The plaintiffs refused to acquiesce in such repudiation and insist that the contract shall be enforced according to its terms, which they have the right to do, but they have no right to make a new contract for the defendant. If, against the will of the vendee, the contract is to stand, the vendee may still insist that it shall stand according to its terms."

69 See infra, § 1403.

70 In re Mullings Clothing Co., 238 Fed. 58, 151 C. C. A. 134, L. R. A. 1918 A. 539, 252 Fed. 667. But see Johnstone v. Milling, 60 Q. B. D. 460.