Lambert v. Scandinavian-American Bank of St. Paul
| Decision Date | 09 November 1896 |
| Docket Number | 10,098--(29) |
| Citation | 68 N.W. 834,66 Minn. 185 |
| Parties | EZRA F. LAMBERT and Another v. SCANDINAVIAN-AMERICAN BANK OF ST. PAUL and Others |
| Court | Minnesota Supreme Court |
In the matter of the assignment of Ezra F. Lambert and Alfred H Lambert, copartners as Lambert Brothers, insolvents, pending in the district court for Ramsey county, the insolvents made application for an absolute discharge from all their debts and indebtedness. From an order, Otis, J., denying their application in part, the insolvents appealed. Affirmed.
Order affirmed.
William G. White, for appellants.
Munn Boyesen & Thygeson, for respondent Scandinavian-American Bank of St. Paul.
John B. & E. P. Sanborn, for respondents John P. Knowles and National German-American Bank of St. Paul.
Stringer & Seymour, for respondent First National Bank of Hastings.
W. C Goforth, for respondent Second National Bank of St. Paul.
The appellants herein made an assignment for the benefit of their creditors under the provisions of the insolvent law (Laws 1881, c. 148), and acts amendatory thereof. [2] Afterwards they made application in such insolvency proceedings to the district court for an absolute discharge from their debts pursuant to the provisions of Laws 1895, c. 67, approved April 24, 1895. Thereupon the court made its order directing that the order to show cause and citation to creditors be issued as provided by the law, which was done, and they were duly served. The respondents herein severally appeared in response to the citation, and opposed such discharge as to their respective debts. No other creditors appeared.
The answer of the respondent the National German-American Bank was to the effect that its debts against the insolvents were contracted, and the contract to pay them was made, prior to the enactment of the law of 1895, and made no other answer. The respondents the First National Bank of Hastings, the Second National Bank of St. Paul, and the Scandinavian-American Bank severally made substantially the same answer as did the National German-American Bank; but each further answered to the effect that the insolvents did, within six years next prior to the making of their assignment for the benefit of their creditors, fraudulently dispose of portions of their property for the purpose of defrauding their creditors. The appellants by their several replies admitted that the several debts of the respondent banks were contracted prior to the act of 1895, and denied the other allegations of the answers.
The respondent Knowles answered to the effect that on April 13, 1894, he loaned to one of the appellants $ 1,400, and took his promissory note therefor due in one year, and that when it matured the time of payment of the debt was extended for three months, and again for one year more; and, further, that on June 23, 1894, he loaned such appellant the sum of $ 1,000, taking his promissory note therefor due in one year, and that at and after its maturity the time of payment of the debt was twice extended, the entire extension being for one year from June 23, 1895. The reply to Knowles' answer admitted the facts therein alleged.
Upon the hearing the court made its order denying the appellants' application as to each of the respondents, as to all creditors residing without the state who had not appeared in the insolvency proceedings, and as to all creditors residing within the state whose debts were contracted prior to April 24, 1895, and who had not appeared in the insolvency proceedings, and granting it as to all other creditors. This appeal is taken from so much of the order as denied the appellants an absolute discharge.
1. It was conceded on the argument that, as to the National German-American Bank, the order appealed from must be affirmed.
As to the debts of the respondent Knowles, the appellants claim that the existing contracts to pay his debts were made since the bankrupt law of 1895 was enacted, and that hence, it does not impair the obligations of the contracts, for the reason that the contracts, entered into after the passage of the law, extending the time of the payment of the debts, superseded the contracts to pay them made when the debts were incurred. Whether such would have been the case if new notes had been taken in absolute payment of those given when the debts were contracted, we need not consider, for such is not this case. There is nothing in the record to suggest that new notes were taken for any purpose when the time for the payment of the debts was extended. The new contracts, simply extending the time of the payment of the debts, did not create the obligation to pay them, for that was done by the original contracts, and the contracts extending the time of payment merely postponed the time for discharging the obligations of the contracts made when the debts were incurred. The time agreed on by the parties, as to when payment of the debts should be made, was only an incident to the contract to pay them, and might be enlarged without extinguishing the primary contract obligation to pay them. The original contracts to pay the debts, after a change had been made in the time for the performance of the contracts, remained in all other respects unchanged. This contract obligation to so pay could not be impaired by the subsequent passage of the bankrupt law in question. The case of the respondent Knowles stands, then, on the same basis as that of the National German-American Bank, and the order must also be affirmed as to him.
2. The facts are substantially the same in the cases of the remaining respondents. Their respective cases differ from that of the National German-American Bank only in the fact that, in their answers to the citation, they alleged two objections or defenses why the application should not be granted as to them, viz. that their debts were contracted before the bankrupt law was passed, and, further, a fraudulent disposition of their property by the appellants. The trial court held the first defense, the facts being admitted, a conclusive reason for denying the application as to each of these respondents. But the appellants claimed that, by pleading the second defense, the respondents waived the first one, and that the court erred in not so ruling, and in not granting their request to set the cases for trial on the issue made by the second defense and reply thereto. The only question for...
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