195 F. 250 | 9th Cir. | 1912
(after stating the facts as above).
It is held by the decided weight of authority that subdivisions 1 and 4 of section 63a of the Bankruptcy Act are in pari materia, and that the words “absolutely owing at the time of the filing, of the petition against him” are to-be read into subdivision 4. In re Roth & Appel, 181 Fed. 667, 104 C. C. A. 649, 31 L. R. A. (N. S.) 270; In re Swift, 112 Fed. 315, 50 C. C. A. 264; In re Adams (D. C.) 130 Fed. 381; In re Burka (D. C.) 104 Fed. 326. It is apparent that the appellant’s claim was not a debt due and owing at the time when the petition was filed, but that it was contingent; that is to say, all the facts necessary to be shown to establish the bankrupt’s liability to the claimant had not occurred before the petition in bankruptcy was filed.
“Where a liability of tbe bankrupt is not fixed, so that it can be liquidated by legal proceedings' instituted at tbe time of bankruptcy, it is not a debt. It is. deemed so far contingent that it cannot be i>roved in bankruptcy, nor is it released by tbe bankrupt’s discharge. A sum of money payable upon a contingency is ,not provable because it does not become a debt until tbe contingency has happened.” Loveland on Bankruptcy (3d Ed.) 342.
In Dunbar v. Dunbar, 190 U. S. 340, 23 Sup. Ct. 757, 47 L. Ed. 1084, it was said:
“W9 do not think that by the use of the language in section 63a it was intended to permit proof of contingent debts or liabilities or demands, the valuation or estimation of which it was substantially impossible to prove.”
At the time when the petition was filed, not only was the bankrupt not indebted to the appellant, but it could not then be known that he ever would be indebted to it, either for money to be paid for rent or for money to be paid for the rescission of the lease. As far as the rent was concerned, there were the contingencies that the lessee might cancel the lease, or that the trustee in bankruptcy might elect to pay the rent, or that the appellant might fail to pay more than its half thereof. As to the agreement looking to a rescission of the lease, there were the contingencies that the agreement, which was without consideration, might be revoked by either party thereto before it was acted upon, or that it might be impossible to secure rescission on the terms stipulated by the bankrupt.
The decision in Re Bingham (D. C.) 94 Fed. 796, is in point. At the time of the filing of the petition in that case the bankrupt and one Hartshorn were jointly liable on a note to a bank, but as between themselves each owed one-half the amount due thereon. The bank proved its claim on the note, and the other party to the note thereafter took up the note and proved his claim against the estate. The court said:
“The bankrupt was bound to save him harmless from this part of the debt, and has not done so; but the indebtedness has occurred since the filing of the petition, and until that time Hartshorn had no provable claim on that account. By this bankruptcy act all claims, turn on their status at the time of the filing of the petition.”
The order of the District Court is affirmed.