Hunt v. Street

• Decision Date: 06 January 1945
• Citation: 184 S.W.2d 553,182 Tenn. 167
• Parties: HUNT v. STREET et al.
• Court: Tennessee Supreme Court

184 S.W.2d 553

182 Tenn. 167

HUNT v. STREET et al.

Supreme Court of Tennessee.

January 6, 1945

Appeal from Chancery Court, Hamilton County; J. Lon Foust Chancellor.

Suit by Ben F. Hunt against T. G. Street and others, for purpose of winding up the partnership business of complainant and named defendant, and to enjoin the defendants from using the partnership name. From decree entered, both parties appeal.

Reversed and remanded.

Wilkerson & Wilkerson and Chas. C. Moore, all of Chattanooga, for complainant.

Whitaker Hall, Haynes & Allison, of Chattanooga, for defendant.

NEIL, Justice.

The complainant filed his original bill in the Chancery Court of Hamilton County for the purpose of winding up the partnership business of complainant Ben F. Hunt and defendant T. G Street who had been engaged in the profession of architecture under the partnership name of R. H. Hunt Company, and to enjoin the defendants from using the said partnership name. The cause was set for hearing on bill and answer. The Chancellor, after a careful review of the record, in an oral opinion correctly stated the issues presented under the pleadings as follows:

'There are two real questions involved in this cause at this time the others being of little importance as the record stands. The first is, shall an injunction issue prohibiting the defendants from using the name of 'R. H. Hunt Company' on their letterheads, office doors, or in any other way? The next question is, whether or not the name 'R. H. Hunt Company' is an asset of the old partnership which is salable.'

While a temporary injunction was granted after a notice to show cause why it should not be so granted, it was not continued in force pending an appeal to this Court. It appears however that the parties have been in no way prejudiced by this action of the Chancellor and for this reason the assignment of error bearing upon it need not be considered. The learned Chancellor decided that the complainant was entitled to such an injunction and that the name of the old partnership was 'a partnership asset' and that 'it is salable.' It was further decided, 'The bill prays for a receiver, and a receiver will be appointed and directed to sell the firm name of R. H. Hunt Company to the highest and best bidder for cash, and this will be done by advertisement once a week for four consecutive weeks in some paper published in Chattanooga.'

Both complainant and defendants excepted to certain portions of the decree and prayed an appeal to this Court. Complainant has filed three assignments of error. Since we have pretermitted the question raised in the third assignment, it will be omitted. The first and second assignments are as follows:

1. The Chancellor committed reversible error in holding and decreeing that the firm name of R. H. Hunt Company, under which complainant and defendant, T. G. Street, conducted their partnership business, as architects, before and up to dissolution of said partnership, was a salable asset of said partnership and decreeing its sale at public outcry, for cash and to the highest bidder.

2. The Chancellor should have found, held and decreed that said partnership of complainant and defendant Street was a professional partnership; that the reputation of said partnership, symbolized by its name R. H. Hunt Company, depended upon the individual skill of its members, Ben F. Hunt and T. G. Street, had no good will to be distributed as a firm asset on its dissolution and, therefore, no formal sale or transfer thereof could be made on dissolution of the partnership, and he committed reversible error in not so holding and decreeing.

The defendants assigned the following error:

'The Court erred in holding that the complainant was entitled to an injunction enjoining defendants from using the name R. H. Hunt Company.'

Before discussing the legal questions raised in the foregoing assignments of error, it is necessary to state the pertinent facts found in the record. R. H. Hunt began the practice of architecture in Chattanooga, Tennessee, about fifty years ago. He was a brother of Ben F. Hunt, the complainant, who began the practice of architecture with his brother in 1903, or forty years ago. About twenty years ago defendant T. G. Street married the only daughter of R. H. Hunt and two years later he was brought into the firm by his father-in-law. It thus appears that the partnership was composed of R. H. Hunt, Ben F. Hunt, and T. G. Street, and that they, individually and collectively, maintained the good name of the partnership 'R. H. Hunt Company'. The record fails to show when R. H. Hunt Company was formed. In the latter part of 1936 R. H. Hunt became gravely ill and on December 31, 1936, he caused a written agreement to be prepared which he signed. This partnership agreement was never signed by complainant Ben F. Hunt and the defendant T. G. Street, but they operated under it in accordance with its terms from December 31, 1936, until the partnership was dissolved on January 31, 1944. The said R. H. Hunt died in May, 1937, about five months after he signed the above mentioned articles of partnership. The said partnership agreement recites: 'The parties hereto have for some time been operating a partnership for the practice of architecture under the name of R. H. Hunt Company, but said parties have never entered into a formal agreement of partnership. The informal agreement heretofore existing is hereby abrogated and the following partnership agreement is this day entered into between the above mentioned parties in lieu thereof.' The substance of this agreement is to the effect that the name 'R. H. Hunt Company' shall continue as the name of the partnership; that the assets of the old firm shall become the property of the firm under the new articles of agreement, including 'good will'; that on dissolution each partner shall be entitled to one third of the partnership assets; that each shall share in one third of the profits and be liable for one third of the losses; that upon the death of any partner the firm shall continue as between the surviving partners; that for a period of three years after the death of any partner the net income shall be paid one third to each surviving partner and the assignee of a deceased partner, after paying $3600 annual salary to the surviving partners.

The agreement clearly contemplated giving the right of succession to partnership interest to heirs of a deceased member. It appears that Mr. R. H. Hunt died about five months after he had signed the foregoing instrument. His widow, Mrs. Katherine DeG. Hunt, and his daughter, the wife of Thomas G. Street, succeeded to his interest. The partnership thus continued from May, 1937, until its dissolution on January 31, 1944.

Complainant rented the firm's quarters in the James Building for use by himself for the practice of architecture under the name 'B. F. Hunt Associates'. The defendant Street undertook to rent the same space on the following day for the use of a new partnership which he had formed or was forming.

The new partnership that was formed by Thomas G. Street was composed of himself, W. C. Caton, who had been connected with the old partnership, and Katherine DeGeorgis Hunt, widow of R. H Hunt. This firm opened offices in the Hamilton National Bank Building under the old partnership name of R. H. Hunt Company. In an effort to settle the partnership affairs there was a disagreement as to the use of the old name as well as its value. ...