National German-American Bank v. Wilder

Dickinson, J.

The Minnesota Elevator Company made an assignment to this appellant, Eli T. Wilder, pursuant to the insolvent law of 1881, (Laws 1881, c. 118,) in accordance with which law the assignment is being administered. The bank above named is a judgment creditor of the assignor, the judgment having been recovered, not only against the assignor, but also against several individual debtors. In the course of proceedings for the distribution of the insolvent estate, the district court, by its order, directed the assignee to pay a dividend to the bank upon the filing by it of a release in a form prescribed by the order. This appeal is from that order, and the only question involved is as to the form of the release. This instrument, in terms, releases to the insolvent assignor all claims of the bank against it, except such as may be paid under the provisions of the above statute, and authorizes judgment to be entered discharging the assignor from all such claims; but it expressly reserves the debt so far as the same shall remain unpaid, and all legal rights as against the other judgment debtors, who are designated by name. The release further declares that it is the intention of the bank that it shall be limited in its operation and effect to the debtor, the Minnesota Elevator Company, and that it shall be without force or effect as to such other debtors.

The assignee contends that the release should be simply and only “a release to the debtor of all claims other than such as may be paid under the provisions of this act,” which is the language of the statute. The respondent, the bank, fearing that a simple and unqualified release of one of its several joint debtors may have the legal effect to discharge all, claims the right to file a release, unqualified as to the insolvent assignor, but declaring its intention to reserve, and expressly reserving, its legal rights and remedies against other debtors.

The statute prescribes no form for the release, but from the language above recited it seems to contemplate merely and simply a release of the insolvent debtor. The instrument under consideration is, in terms, an unqualified release of this insolvent debtor, and is claimed to be objectionable only because of the attempted reservation of rights as against other debtors, and of the declared intention that its operation shall be so limited. But if the release, thus guarded or qualified, has the same legal effect, under this law, as it would have had if such qualifying terms had been omitted, the court was justified in treating it as complying with the requirement of the statute, disregarding whatever was in excess of the statutory requirement, but not contrary to the purposes or to the effect of the law,— expressio eorum qua tacite insunt nihil operatur. Broom’s Leg. Max. 669; In re Mann, 32 Minn. 60, (19 N. W. Rep. 347;) 2 Pars. Cont. 646; Henwood v. Oliver, 1 Q. B. 409.

The statute under which this release is given provides that no creditor of an insolvent debtor shall receive any benefit under its provisions, or any payment of any share of the proceeds of the debtor’s estate, “unless he shall have first filed with the clerk of the district court, in consideration of the benefits of the provisions of this act, a release to the debtor of all claims other than such as may be paid under the provisions of this act, for the benefit of such debtor; and thereupon the court or judge may direct that judgment be entered discharging such debtor from all claims or debts held by creditors who shall have filed such releases.” Exceptional provision is, however, made in respect to cases where fraudulent conduct on the part of the insolvent is shown. A release executed and filed pursuant to the provisions of this statute does not operate in itself to discharge the insolvent debtor. That is accomplished only by the judgment of the court. It is to be inferred from the terms of the statute that the judgment to be entered should be one “discharging such debtor,” and that, whatever may be its legal effect, it will not declare the discharge of any other debtors than such insolvent.

The release under consideration authorizes, so far as the consent of the creditor is necessary for that purpose, such a judgment to be entered as the statute contemplates; but the judgment will derive its force from the law, and not from the act of the creditor. The effect of the judgment will not be determined by the form or conditions of the release. If the proper legal effect of the judgment which the statute contemplates is to release only “such debtor,” the expressed purpose of the creditor in this release would not vitiate it, for that would be in harmony with and not opposed to the law. It would be merely an unnecessary attempt to effect what the law of its own force would have accomplished. If, on the other hand, the legal effect of the judgment is to discharge all those jointly liable with the insolvent, that will be its effect none the less by reason of the declared purpose or the qualifying terms of this instrument. We therefore hold that the court was justified in its determination.

We have refrained from deciding as to the effect of the discharge of the insolvent debtor as respects co-debtors, and have considered, without unnecessary comment, only what we deem to be necessarily involved in this ease, for the reason that neither of the parties to this proceeding argued that question, or asked our decision upon it; and counsel coming before us in behalf of the other debtors insisted that the question was not here involved, and should not be considered.

Order affirmed.