Hamilton v. Zimmerman

• Citation: 37 Tenn. 39
• Parties: M. HAMILTON v. JOHN M. ZIMMERMAN.
• Decision Date: 31 December 1857
• Court: Tennessee Supreme Court

37 Tenn. 39

M. HAMILTON

v.JOHN M. ZIMMERMAN.

Supreme Court of Tennessee.

December Term, 1857.

FROM DAVIDSON.

The complainant filed this bill in the chancery court at Nashville, for a settlement of partnership accounts between himself and the defendant, with whom he claims to have been a secret partner in the business of druggist. The facts are fully given in the opinion. At the November term, 1857, Chancellor Frierson, rendered a decree for the complainant. The defendant appealed.

E. H. Swing and W. F. Cooper, for the complainant; John Trimble and Foster, for the defendant.

McKinney, J., delivered the opinion of the court.

This was a bill for a partnership account. The complainant alleges that, for several years, he was a secret partner with the defendant in a drug store in the city of Nashville, carried on in the name of J. M. Zimmerman, under a verbal agreement between them, to share equally the profits of the business. The fact of partnership is expressly denied by the defendant. To establish his interest as a partner in the concern, the complainant relies on the oral admission of the defendant, made to various persons, at different periods during the continuance of the alleged partnership. And to show that such was not the fact, and that the complainant's only connection with the business was in the capacity of clerk, in the employ of defendant, resort is had to the same sort evidence, namely, the verbal declarations of the complainant, often repeated, to the effect that he was not a partner with defendant in the business, but simply a salaried clerk; and, in addition, the defendant relies upon the complainant's implied admission in a more solemn form, contained in his answer to a bill in chancery, to disprove the allegation of the present bill. It seems, from the allegations and proof in the cause, that on the 18th of November, 1850, McNairy & Hamilton, druggists, of Nashville (the firm consisting of the complainant, M. Hamilton, and W. H. McNairy), being about to fail, sold and transferred their stock to the defendant, Zimmerman, who executed his several notes for the consideration agreed to be paid payable in future installments which notes were transferred by Mc Nairy & Hamilton to N. A. McNairy, as collateral security, to indemnify him on account of his liabilities for the firm of McNairy & Hamilton.

The bill, in substance, charges that about the time of the sale by McNairy & Hamilton to Zimmerman, the complainant, reduced to poverty by the failure of said firm, and deprived of the means of support for his family, proposed to Zimmerman, who was comparatively a stranger in Nashville, that he, the complainant, who was familiar with the business, and had an extensive acquaintance in the community, would, as a secret partner, join with the former in the purchase of the said stock of drugs and medicines from McNairy & Hamilton, and in carrying on said business in Nashville, upon the terms that they should equally share the profits of the business. To this proposition, as the bill alleges, Zimmerman readily assented. The bill further states, in substance, that, being insolvent, and looking to his interest in the profits of this new business as the only means of furnishing a support for his increasing family, “it was absolutely necessary that his (complainant's) connection with Zimmerman in the purchase should be kept secret, otherwise the whole object had in view might at any moment be defeated. Accordingly the fact was not made known to the public,” and complainant “went into the new business, ostensibly, as clerk, and so held himself out to the world,” etc. But that in reality he was a full and equal partner in the business, and so continued up to some time in 1856, when Zimmerman sold out the entire establishment, and denied that complainant had any interest as partner in the same, or any right to a share of the profits. The bill alleges that the complainant withdrew from the concern upwards of $4,000, and the defendant nearly $8,000; and that after this deduction, and an adjustment of all the liabilities of the concern, there remains a balance of clear profits of from $10,000 to $14,000 to be divided; and to one-half of which, complainant, by the agreement, is entitled.

The answer denies, in strong terms, the existence of any agreement or understanding that Hamilton was to have any interest, or that he ever had any interest, as partner, in the purchase of the stock of drugs and medicines, or in the business carried on by the defendant, and positively asserts that he was merely employed and taken into the store as clerk, in the early part of the year 1852; and that he remained, and served in that capacity alone, until in 1856, when defendant sold out the establishment; and that the money stated to have been drawn from the concern by the complainant was received as compensation for his services as clerk, and not otherwise.

This is an extraordinary case. The solemn asseverations of the parties in the bill and answer--both of which are sworn to--are positively contradicted and disproved by the previous repeated declarations of the parties. It is satisfactorily proved that the defendant, on different occasions, during the continuance of the business, distinctly admitted the interest of complainant as a partner, and that, as such, he was entitled to a share of the profits. And, on the other hand, it is as fully established that the complainant denied more frequently, perhaps, that he had any interest whatever as partner; and asserted that he was merely a clerk, receiving a salary for his services.

Perhaps no case of conflicting evidence, of more difficult solution than the present, can be imagined, if we look merely to the oral admissions and declarations of the parties. It is impossible to reconcile the statements of the parties with each other; and it is no less impossible to reconcile the statements of either, made prior to this suit, with his own allegations in the pleadings. The attempt to do so would be alike...