208 F. 479 | D. Maryland | 1913
The bankrupt corporation made ladies’ shirt waists. The claimant, a Miss Grinoch, was a designer of them. On the 21st of September, 1912, she entered into a contract with the bankrupt to continue in its employ for a period of one year at the rate of $60 per week. In December, 1912, the bankrupt became financially embarrassed. It placed its affairs in the hands of a liquidating committee of its creditors. This committee retained claimant’s services. An involuntary petition in bankruptcy was filed in February, 1913. An adjudication promptly followed. While the referee liquidated the
Claimant’s contention may be briefly summarized. Whether claims for such salary are or are not provable depend entirely upon whether or not a breach of the contract of employment has been committed before bankruptcy or whether the bankruptcy itself operates as a breach. 3 Remington, 167.
So soon as one of the parties to an executory contract breaks or repudiates it, the other may sue, although the time for performance has not arrived. Hochster v. Delatour, 2 E. & B. 678; Roehm v. Horst, 178 U. S. 1, 20 Sup. Ct. 780, 44 L. Ed. 953.
An adjudication in bankruptcy is,- as of the date of the filing of the petition, an anticipatory breach by the bankrupt of its unfulfilled contracts.. In re Neff, 19 Am. Bankr. Rep. 23, 157 Fed. 57, 84 C. C. A. 561, 28 L. R. A. (N. S.) 349; In re Pettingill, 14 Am. Bankr. Rep. 757, 137 Fed. 840, 70 C. C. A. 338; In re Swift, 7 Am. Bankr. Rep. 374, 112 Fed. 315, 50 C. C. A. 264; In re Spittler (D. C.) 18 Am. Bankr. Rep. 425, 151 Fed. 942; In re Stern, 8 Am. Bankr. Rep. 569, 116 Fed. 604, 54 C. C. A. 60; Wood v. Fisk, 156 App. Div. 497, 141 N. Y. Supp. 343; Woodman on the Raw of Trustees in Bankruptcy, § 447. The above-stated principles are specifically applicable to a claim such as hers. In re Silverman (D. C.) 4 Am. Bankr. Rep. 83, 101 Fed. 219; In re Dunlap Carpet Co., 20 Am. Bankr. Rep. 882, 163 Fed. 541. Some of the authorities say that it is not every adjudication in bankruptcy which amounts to an anticipatory breach but only those in which the adjudication is the result of a voluntary act on the part of the bankrupt.
In this case the adjudication was in form voluntary. She asserts that it was in substance otherwise. It is unnecessary to pass on that question. It is one which may be raised in not a few cases. Sometimes a bankrupt is anxious, and perhaps legitimately anxious, to have bankruptcy proceedings instituted at once. A voluntary petition must be accompanied by proper schedules. The preparation of such schedules may take some time. A creditors’ petition can be filed with greater expedition. It does not seem desirable that the provability of such a claim as that here at issue shall depend upon a distinction which may so often be without real substance. The trustee and the objecting creditors rely upon In re Inman & Co. (D. C.) 171 Fed. 185; In re American Vacuum Cleaner Co. (D. C.) 192 Fed. 939. In the former of those cases Judge Newman made an elaborate review of all the authorities. If the cases of In re Silverman and In re Dunlap
The Circuit Court' of Appeals further says that the lessee may quit the premises with the lessor’s consent precisely as in contracts of service the contract may at any time be terminated by mutual consent. That distinguished court felt that rent contracts and contracts for services were in the same class and cited as authority for their own decision In re Inman & Co., supra.
Roth v. Appel has been expressly followed by the Circuit Court of Appeals for the Ninth Circuit in Colman v. Withoft, 195 Fed. 250, 115 C. C. A. 222. It is not easy to, distinguish between contracts which are contingent and those which are not. It is highly important that the rule applied in such matters shall be uniform. The later cases and those of the higher authority reject such claim as that made in this case. I should not feel justified in differing with them even if I had a greater theoretical doubt as to their correctness than I do in fact entertain. They certainly are not opposed to any sound public policy. There are some grave objections to upholding such contracts against a bankrupt’s estate. No one will ever try to do so when the market value of his services is equal to or exceeds the value placed upon them by his contract with the bankrupt. Claims of this kind will be most insistently urged in those very cases in which the disparity between the contract and the market value of the services is the greatest. Such differences will be perhaps most marked when the contract valuation is the result of the partiality of relatives and friends or of the recipro
For the reasons stated, the order of the referee will be affirmed at the cost of the claimant.