Cain v. Traction Co. the street cars were being run to the fair grounds; saw one or more of the loaded cars going in that direction before he entered the hack; on his way out he crossed the street railway track on Pine street some distance east of Sweitzer and before he arrived on Sherman street; but he did not know upon what street he would meet or cross the tracks in going out by the route he was going. He did not look or listen at the approach to the Sweitzer street crossing, nor did he use any other precautions for his safety at this crossing, but relied upon the hack driver. It is true he did not know that the street railway was located upon that particular street, but he did know that he would in all probability be in proximity of the track at some point in that neighborhood. The plaintiff was, therefore, guilty of contributory negligence, (1) in taking passage with an incompetent driver, and, (2) in failing to use due care for his own protection, knowing or having opportunity to know, the incompetency of the driver. The plaintiff cannot, therefore, recover, unless after the motorman knew of the perilous situation of plaintiff, he failed to use due care to avoid the injury. Some difficulty always presents itself in a case of this kind in determining when to apply the rule that the defendant is liable for its negligence in not avoiding the injury, notwithstanding the negligence of the plaintiff. It is clear that the negligence of the defendant must be subsequent to that of the plaintiff, and not concurrent with it. Elliott, Railroads Sec. 1175; Cincinnati, H. & D. Ry. Co. v. Kassen, 49 Ohio St. 230 [31 N. E. Rep. 282; 16 L. R. A. 674]; Schweinfurth v. Railway Co. 60 Ohio St. 215 [54 N. E. Rep. 89]; Krause v. Morgan, 53 Ohio St. 26 [40 N. E. Rep. 886]. To make the negligence of the defendant subsequent to that of the plaintiff, it must appear that the motorman saw and realized the danger to the plaintiff, and then failed to use due care to avoid the injury. If the driver was negligent in going upon the tracks in front of the car, or was negligent in not getting off the tracks, when, in the use of due care, he could have done so, and the motorman was mistaken in assuming that he could not get off the tracks, or in assuming that he would get off the tracks when he had an opportunity to do so, this would be concurrent negligence, and the plaintiff's negligence would be proximate and, therefore, contributory in a legal sense. The time when the negligence of the plaintiff ceased to be proximate, was when the motorman in good faith realized the peril, and if from that time he failed to use due care to avoid the collision, such negligence would constitute the proximate cause of the injury. New York, C. & St. L. Ry. Co. v. Kistler, supra. The motorman, when he observed the hackman pull up and turn his Darke Common Pleas. horses as if to avoid the cars, released the brake. This was evidently upon the belief that the hackman heeded the approach of the car, and was intending to avoid it. Either because he was unable to do so, or because he was careless in his efforts, the hackman failed to clear the car with the hack, and the collision was the result. The motorman, evidently, in good faith, believed at the time he released the brake that Scott was either out of the way or would be able to get out of the way, and when he recovered his hand brake and attempted to apply it, it was too late to be of any avail. This was a miscalculation on his part, but did not constitute negligence of that character which creates a liability, notwithstanding the contributory negligence of the plaintiff. Burket, J., in New York, C. & St. L. Ry. Co. v. Kistler, supra, discusses this question, and maintains the doctrine that the engineer of a train when suddenly confronted with danger should not be held too strictly to an account to persons to whom he owes only the duty of ordinary care, and in such cases, it is sufficient if the engineer determines for himself, in good faith, the course to be pursued. The same principle applies here. The theory of such liability is, that when the defendant realizes the peril in which the plaintiff has been placed by his own negligence, and fails to use due care to avoid the injury, it amounts to wilfulness or wantonness, and becomes the proximate cause of the injury. It may be said that the motorman should have used his power brake when he became aware of the danger instead of attempting to reapply the hand brake, but under the rule of New York, C. & St. L. Ry. Co, v. Kistler, supra, if he acted in the emergency according to his own best judgment, and in good faith, the company is not liable. The evidence does not show that he did not act in good faith; nor does it show that after the motorman became aware of the peril, the power brake could have been applied in time to have avoided the collision, and the judgment is, therefore, in favor of the defendant. PARTNERSHIP-FRAUDULENT CONVEYANCES. NATIONAL LAFAYETTE BANK et al. v. George E. Scott et al. 1. INSOLVENCY SHOULD BE ALLEGED IN SUIT TO SET ASIDE TRANSFER. A suit by creditors of an insolvent firm to set aside a transfer of property made by one of the partners to his wife cannot be maintained, where the petition makes no reference to prior efforts to realize upon the debt out of the partnership property, and does not allege insolvency or any other fact justifying proceedings directly against the undivided property of one of the partners. 2. JUDGMENT AGAINST ONE PARTNER DISCHARGES OTHERS, WHEN. Partnership obligations are of a joint nature and are within the rule that a judgment upon a joint obligation against one of the joint obligors dis Bank v. Scott. charges the others. Hence, a judgment against a partner upon an unquestioned partnership liability operates as a discharge of the other partners. 3. PARTNERSHIP DEBT DEfined. Money borrowed expressly for firm uses is a partnership debt, although evidenced by the individual notes of the partners. 4. SUBSEQUENT INSOLVENCY DOES NOT DEFEAT CONVEYANCE, The validity of a conveyance is determined by the circumstances of the grantor at the time it is made and a transfer by a solvent grantor will not be rendered fraudulent by his subsequent insolvency. 5. FACTS NOT CONSTITUTING FRAUDULENT INTENT. Technical responsibility of a partner for disaster to a solvent business will not be accepted as indicating a fraudulent purpose on the part of such partner in transferring his property while the business was still solvent. Maxwell & Ramsey, Dempsey & Fridman and Kelley & Follett, for plaintiffs. J. H. Charles Smith, for defendants. HOSEA, J. The suit is brought by creditors of the late firm of George Scott's Sons, to set aside a transfer of the family residence property of George E. Scott, made by him to his wife on July 7, 1900, as being in fraud of the rights of creditors, and to subject said property to their claims. The bank sues upon a debt of about $6,000, based upon notes signed by individual partners-George E. and Samuel J. Scott-to and endorsed by the firm. It is pleaded as, and in fact is, a partnership debt; as are the claims of the Winifrede Coal Company and the Eagle White Lead Company, who are joined in the suit. The only right of action against George Scott individually, therefore, is based upon the legal liability of a partner for the firm debt. Certain questions, therefore, suggest themselves at the outset as preliminary to the consideration of the question of fraudulency in the transfer of the property by Scott to his wife. The petiton makes no reference to any prior efforts to realize the debt out of the partnership property; nor does it allege insolvency, or any other fact that might serve to explain the omission and justify a proceeding directly against the individual property of George E. Scott as a partner; nor does it state any other fact or reason for ignoring the rule requiring a firm creditor to first exhaust the partnership assets. The present suit asks the aid of a court of equity in what is properly a supplementary proceeding against the individual partner to enforce the collection of a debt against a firm. It is well settled that equity will not lend its aid to subject the estate of one partner to a judgment against a firm while the joint property is unexhausted; still less will it do so where it does not affirmatively appear that the proper legal steps have been taken and have failed to secure Superior Court of Cincinnati. payment of the debt, or that some impediment or good reason exists for not taking such steps. The partnership property is the proper fund for the payment of partnership debts, and must be resorted to before the separate property of partners can be reached through the agency of a court of chancery. (Hubble v. Perrin, 3 Ohio 287; Lindley, Partnership *744 et alia.) What is said above applies equally to all the creditors who appear in the suit. There is another objection which applies only to the claim of the National LaFayette Bank. It appears in testimony that the bank previously brought a suit in this court, against the partnership and the individual partners, upon the identical claim presented here; and that in said suit it took a personal judgment against Samuel J. Scott, a partner, for the entire sum; that an execution was ordered, and that an order was also entered directing the sheriff to hold a certain fund in his hands, belonging to said Samuel J. Scott, subject to the order of the court in the case referred to; and this seems to be all that has been done so far. These facts bring into operation another well-established rule of law, namely, that where a joint obligation is sued upon and a judgment taken against one of the joint obligors, such judgment operates to discharge the others from liability. This is so for the reason that the parties are bound, at law, in respect of one and the same debt; and if judgment is entered upon the debt, the claim is merged in the higher security of the judgment. Partnership obligations are of this joint nature, and fall within this rule. Lindley, Partnership *191, 192, 255; Shumaker, Partnership 342. This principle was accepted and applied in Sloo v. Lea, 18 Ohio 279, and has been recognized in subsequent cases, to wit: Reynolds v. Stansbury, 20 Ohio 344-351; Clinton Bank v. Hart, 5 Ohio St. 33, 34; Avery v. Vansickle, 35 Ohio St. 270; Yoho v. McGovern, 42 Ohio St. 11. The facts that the notes constituting this debt sued upon by the bank were signed by the individual partners, makes no difference. Equity looks through the form of transactions to the substance. Not only is the debt sued upon here as a whole and as a partnership debt, but, in the other suit circumstances are pleaded showing that the money was borrowed expressly for firm uses the transaction being put in the form of individual notes for nrm purposes. And it is also clear, from the testimony in this case of the bank president, Mr. Goodman, that the credit was given to the firm as such, and not to the individual partners. This debt, upon such a state of fact, is unquestionably a partnership liability and subject to all the limitations governing such liability, notwithstanding it stands upon the individual notes of partners. McKee v. Hamilton, 33 Ohio St. 7; Merchants Nat. Bank v. Little, 2 Circ. Dec. 496 (4 R. 195); First Nat. Bank v. Stiles, 4 Circ. Dec. 481 (8 R. 532). Bank v. Scott. Under the operation of these established principles, the plaintiffs and cross-petitioners have not shown their right to maintain. his suit or to have granted to them the relief sought; but, in justice to all parties, I have carefully considered the main question upon a wholly independent basis, and will state my conclusions and the reasons therefor. The law of England, whence we derive our statutes relating to conveyances in fraud of creditors, has always been severe and strictly administered. It is quite within the memory of some yet living that the principle of imprisonment for inability to pay a debt-a principle whose evils were so forcibly exposed by Dickens' touching story of Little Dorrit has been laid aside in English jurisprudence as obsolete, in recognition of the higher considerations of the public good, excepting only where by actual and intentional fraud, a man has forfeited his right to consideration under more beneficent modern statutes and adjudications. But even under the English decisions of a quite recent period, much of the old spirit of harshness prevails; and, influenced by these decisions, our own courts, in some instances, have felt constrained to apply rules which probably would not obtain today upon the same state of fact. Without dwelling further here upon the more lenient-or, at least, more discriminating-attitude of modern courts of equity (which will be found very fairly stated in 14 Am. & Eng. Enc. Law 304), I will call attention to a few considerations that are controlling factors in this examination. The statute upon which this suit proceeds is Sec. 6343 Rev. Stat., as amended April 26, 1898, 93 O. L. 290; and relates to a conveyance or transfer made in contemplation of insolvency, or with intent to prefer one or more creditors to the exclusion of others, or with intent to hinder, delay or defraud creditors, etc. It is an elementary principle that fraud or fraudulent intent will not be presumed. It must be pleaded and proved as a fact. But in cases of fraudulent conveyance an intent may be held to exist by force of circumstances, where perhaps no conscious purpose existed, under the rule that a man must be held to intend the natural and inevitable consequences of his acts. Again, insolvency, in these cases, is frequently to be judged of by the after event; and, usually, if it takes place shortly after the making of the conveyance, it is, under the English authorities, sufficient proof of fraudulent intent at the time. American authorities, however, recognize an exception where a man is perfectly solvent at the time of the transfer, but is afterwards rendered insolvent through unexpected losses which could not have been reasonably reckoned on at the time of the conveyance. (Bump, Fraudulent Conveyances Sec. 254; 1 Bailey 575.) And, indeed, the fair and just rule, as it seems to me, is that the inquiry should be limited to the circumstances of the grantor at the time. (Bump, Fraudulent Conveyances Secs. 263-265.) And this I understand to be the rule in Ohio. Miller v. Wilson, 15 Ohio 108. |