Owen J. Roberts

“ The respondent asserts a substantial difference between rent and other kinds of indebtedness, and presents equitable considerations thought to weigh in its favor, but especially stresses the legislative history of the bankruptcy laws passed by Congress, and insists that the preponderant construction of them by the courts excludes claims for future rents from the class of provable debts. ”

“ The issue is not one of power, for plainly Congress may permit such claims or exclude them. The sole inquiry is the intent of the act. The construction for which the petitioners contend is, as a matter of logic, an admissible one. But that construction is contrary to the great weight of authority as to the effect of similar provisions in earlier acts, and section 63 of the present act.
In England such claims were not provable under the Act of 7 Geo. I, c. 31; Mayor v. Steward, 4 Burr. 2439; and a discharge could not be pleaded in defense of an action for rent accruing subsequent to bankruptcy. ”

“ Since many events may occur which will absolve the tenant from further obligation for rent, the claim is said to be too contingent, both because of the uncertainty at the date of adjudication that the lessor will re-enter, and the doubt as to his suffering loss of rent if he should re-enter. ”

“ The lease contained a covenant that, if the tenant should default in the payment of rent, or abandon the premises, or if they should become vacant, the tenant become insolvent, or make an assignment for the benefit of creditors, or if bankruptcy proceedings should be instituted by or against the tenant, the landlord might without notice re-enter the premises ”

“ A discharge in bankruptcy shall release a bankrupt from all of his provable debts. * * *' [5]
A majority of the Circuit Court of Appeals felt bound to follow its earlier decision In re Roth & Appel, 181 F. 667, 31 L.R.A. (N.S.) 270, which denied a landlord's right to prove a claim for future rents arising under a similar lease. The view there expressed was that the occupation of the land is the consideration for the rent, and, if the right to occupy terminates, the obligation to pay ceases; and the covenant to pay rent creates no debt until the time stipulated for payment arrives. ”

“ Debts of the bankrupt may be proved and allowed against his estate which are (1) a fixed liability, as evidenced by a judgment or an instrument in writing, absolutely owing at the time of the filing of the petition against him, whether then payable or not, with any interest thereon which would have been recoverable at that date or with a rebate of interest upon such as were not then payable and did not bear interest; * * * (4) founded upon an open account, or upon a contract express or implied. ”

“ If the rule is to be changed, Congress should so declare.
The petitioners call attention to the last clause of section 74 (a) , which is one of the sections added to the Act in 1933: [12] 'A claim for future rent shall constitute a provable debt and shall be liquidated under section 63b (section 103 (b) ) of this title.' Sections 73 to 76, inclusive, were enacted to permit extensions and compositions not theretofore possible. They apply only to individuals. ”

“ Since 1900 the Circuit Courts of Appeals in six circuits, and the District Courts in another, have agreed with these early adjudications. Slocum v. Soliday, (C.C.A. 1) 183 F. 410; McDonnell v. Woods, 298 F. 434 (C.C.A. 1) ”

“ Unliquidated claims against the bankrupt may, pursuant to application to the court, be liquidated in such manner as it shall direct, and may thereafter be proved and allowed against the estate.' [3]
'Section 1. (11) 'Debt' shall include any debt, demand, or claim provable in bankruptcy.' [4]
'Sec. 17. ”