Pearce v. Pettit

• Decision Date: 05 May 1887
• Citation: 4 S.W. 526,85 Tenn. 724
• Parties: PEARCE v. PETTIT and another.
• Court: Tennessee Supreme Court

4 S.W. 526

85 Tenn. 724

PEARCE v. PETTIT and another.

Supreme Court of Tennessee.

May 5, 1887

Appeal from chancery court, Sheeley county.

Poston & Poston and Metcalf & Walker, for complainant, Pearce. Gantt & Patterson and U. W. Miller, for defendants, Pettit and others.

MCFARLAND Special Judge.

Prior to the eleventh March, 1884, complainant, Pearce, and defendants, Pettit and Suggs, were partners in the grocery and commission business in Memphis. One McElroy was the book-keeper of the firm. This firm had existed from first June, 1880. On the eleventh of March, 1884, Pearce sold his entire interest in the firm to Pettit for $20,750, of which $15,000 was cash, and balance, $5,000, in 12 months, with interest. Pettit was also to pay Pearce half of a $1,500 note due Hernando Insurance Company. This agreement was reduced to writing, and signed by the parties. On the fourteenth of April, 1884, Pearce filed this bill for a rescission of this contract. Alternative relief was also prayed as to some "uncollected assets of Pearce, Suggs & Co.," in case rescission was denied.

The material allegations of the bill, alleged as grounds for the rescission, were false representation on the part of Pettit as to the condition of the firm, specifying, among others that he represented that there would be a considerable loss on shipment of 600 bales of cotton; that the indebtedness of the firm to third parties exceeded its promptly available assets; that, after paying its debts, the firm would have nothing to pay partnership balances, etc.,--all of which the bill says were untrue, and specifying in what particulars they were untrue; the allegations as to compress stock and brick-yard stock, and value of other assets, being specifications under the above charge of misrepresentation as to condition of the firm. The oath of the defendants is not waived. It is not a bill which, under the rules of chancery pleading, is required to be sworn to. The bill further charges that Pettit was the financial manager of the firm and that he attended to the outdoor part of the business, and knew but little about the books. It also alleges that while negotiations were pending as to a contemplated sale, he (the complainant) directed the book-keeper, McElroy, to make up a statement showing how the complainant stood with the firm. In about half an hour this statement was handed to him, from which it appears that $15,000 would be only about 50 per cent. of the amount to his credit with the firm, after deducting complainant's one-third of the estimated bad debts due the firm. The bill further charges that this statement did not come up to the date it was called for; that for this reason it did not show the true state of his account; that the profits of that year had not been divided and for other reasons the statement was inaccurate. The complainant had this statement for a day before he made the trade with Pettit. There is no allegation of incompetency or want of skill upon the part of McElroy, nor of his participation in any way in perpetrating any fraud upon complainant. There is no allegation that either Pearce or Suggs instigated or influenced McElroy in making this statement, or had anything to do with it. And it must follow that whatever relief may be based upon the errors of this statement must be based upon "accident and mistake," and the relief incident to these, and the rules of equitable relief based upon these purely without the feature of fraud.

The defendants answer separately. Each answers under oath. Their answers each are responsive to the bill; and, as to facts alleged as to the fraud of Suggs & Pettit, and their misrepresentations to complainant of the condition of the firm, and upon which in part he bases his right to rescission, they are of their personal knowledge.

During the progress of the case the complainant took the depositions of both defendants. During the taking of the proof the complainant first called for the books of the firm. This being denied, he then, by formal motion, asked for a rule on defendants "to produce in court their books for inspection, and also for an order on them to furnish from the books a trial balance or detailed statement, showing the true condition of the firm of Pearce, Suggs & Pettit on the eleventh of March, 1884, together with a statement of the individual account of complainant with said firm to that date. The first part of this motion was denied, the second granted, and the defendants or McElroy ordered to furnish same. McElroy made these statements; and, upon exceptions thereto, he made other and very full statements upon every specific point asked by complainant; and the court below, while refusing complainant production or inspection of the books, seemed prompt and liberal in granting all orders for statements on specific matters.

The complainant called for a jury on the hearing, and the cause was tried with a jury. When the issues were presented by both complainants and defendants, those of complainant were, as he complains, materially changed, so that they did not present properly the issues to which he was entitled; but, under the direction of the court, some 22 issues, with 30 sub-issues, were preferred and submitted to the jury. On the trial of these issues complainant offered to read the depositions of Pettit and Suggs, previously taken by complainant, as a part of their cross-examination on witness stand as witnesses for themselves, "and as evidence." The court refused to permit complainant to do this, except for the purpose of contradicting witnesses on evidence given to jury, and saying this must be done by calling attention of witness to each part intended to be so used for contradiction. The court also permitted the answers of defendants to be read to the jury as evidence, saying, in the hearing of the jury, that the bill was not evidence. The court also charged the jury as to the weight to be given to their answers. The verdict of the jury was in favor of defendants upon all the issues submitted except one, and upon that their return was that "they were unable to determine;" this issue being immaterial to the question now involved. The complainant moved for a new trial, which was overruled, and for a decree upon the whole evidence. Exceptions were taken to all the rulings now complained of.

The grounds upon which complainant now seeks a reversal in this court are suggested by the foregoing. They are, substantially: (1) Refusal of the court to permit complainant to read as evidence the depositions he had taken of the defendants, except for contradiction of witnesses; (2) because the court permitted defendants to read as evidence their answers in the case; and error in the charge of the judge as to weight of their answers; (3) changing of issues presented by the complainant; (4) refusal of the court to grant an inspection of the books of the firm.

As to the first of these. We do not think the court erred in refusing to allow complainant to read the depositions of defendants he had previously taken in the cause, except for the purpose of contradiction. The complainant had closed his examination in chief. He offered these depositions as a part of his cross-examinations. As original evidence, it was within the discretion of the chancellor to...