41 Tenn. 591 | Tenn. | 1860
delivered the opinion of the Court.
This is an action on the case, brought by McWhirter, against Douglas, in the Court below, on an instrument in these words:
*593 “Nashville, Nov. 27, 1852, Mr. And. J. McWhirter, I will pay you the estimated discrepancy between what the business of H. & B. Douglas & Co. promises for the nest three years, as compared with an offer made to you, by another party for, same time, which we now presume to be, from one dollar to three thousand dollars, so soon as a correct amount can be arrived at.
“Hu. Douglas.”
In order to comprehend this writing, we must look to the facts, and circumstances under which it was executed, and to which it refers. On the 1st of December, 1849, Hugh and Byrd Douglas, merchants of Nashville, having an actual capital of $174,843.33, took into partnership with them, till November 30th, 1852, said McWhirter, Samuel C. Godshall, and Jagper N. Bailey, neither of whom had any capital. By the articles of partnership, dated December 1st, 7849, Hugh Douglas was to be head salesman, regular cashier, and controlling proprietor; Byrd Douglas, head purchaser, correspondent and controlling proprietor; Godshall, book-keeper, assistant correspondent and cashier; McWhirter, salesman, and general business man, and Bailey, the same. Balances were to be made to the last of May and November, yearly, to ascertain the gross debt due, from which was to be deducted the uncollectible debt, not less than two and a half nor more than five per cent, to defray the expense of closing the business to the date of the balance, the annual salaries of the partners, to wit: To Hugh Douglas, $1,000; Byrd Douglas, $1,000; Godshall, $1,000: McWhirter, $750, and Bailey, $750, to be placed to the credit of each, by charging the same to “expense account,” and six per cent, per annum interest on the active capital of Hugh
On the 29th of November, 1852, the new firm of H. & B. Douglas & Go., was formed, by articles executed at that date, to continue three years from the 1st of December, 1852. The capital to be furnished by Hugh and Byrd Douglas, was to be $200,000, and that by the junior members each, $2,500, to be employed in the same business, by the same parties, and in the same capacities, as before. Balances were to be made to the last of May and'November, to ascertain the gross debt due, from which was to be deducted the uncollectible debt, not less than two and a half, nor more than five per cent., to be used to pay extraordinary losses, in conducting the business to which it belonged, an annual salary of $2,000 to each of the partners, and six per cent, per annum, interest on the active capital furnished by each partner; thus ascertaining the profit, or dividend, which was to be appropriated as follows: Seventy per cent, thereof, equally, to Hugh and Byrd Douglas, and the
There existed in Memphis, a copartnership of merchants of long standing, who did business under the firm name of Cossett, Howard & Hill, composed of E. PI .Cos-sett, James M. Howard and Ira M. Hill, which would expire, by limitation, on the 1st of July, 1853. When the old partnership of H. & B. Douglas & Co., was about expiring, McWhirter opened a negotiation with the house at Memphis, for a partnership with them. This negotiation was carried on by letters and telegrams, between Cossett and McWhirter, of which we have only those written by the former to the latter.
The result of the negotiation was, that Cossett and Hill offered to lake McWhirter into their firm, commencing in January, 1853; first, as a clerk, with a salary at the rate of $2,000 per annum, until the first of July thereafter; and if, after the six months active business acquaintance with each other, growing out of that relation, all parties were mutually agreed, (of which it was supposed there could not be the slightest doubt,) then, as a partner with them, with an interest of twenty per cent, in their business; they to furnish the capital, about $100,-000, at six per cent, interest, and the partnership to commence July 1, 1853, and to continue from three to five years — say for three years, or even two years — if desired by McWhirter; but subject to be dissolved by either partner upon thirty days written notice: the stock — which was thirty to forty thousand dollars — to be taken at New York cost, and depreciated goods at value; in case of
On the 25th of November, McWhirter, by dispatch to New York, accepted the offer of Oossett and Hill, and on the same day, Hugh and Byrd Douglas telegraphed
McWhirter remained in the firm of H. & B. Douglas & Co., for the three years ensuing the 1st of December, 1852, and received — as is proved by G-odshall — in salary and profits — not including interest — on and before the 5th of January, 1856, $15,776.04, from this firm, for the whole time it was in business. And we are not able — from our construction of the articles of partnership, and the proof — to say that he received a greater amount.
McWhirter, assuming that he had not realized from the business of his firm, as much as he would have made, had he accepted the proposal made to him by Cossett and Hill, brought the suit against Hugh Douglas, upon the paper of the 27th of November, 1852.
Cossett proves that the offer to McWhirter was made in good faith, that the statements in the letters were substantially correct, and that, if all parties were satisfied, the offer would have been carried out. He declines saying anything as to the value of McWhirter's situation under the offer.
The witness declined to state, unless directed to do so by the Court, and caused the question of his obligation to answer the interrogatory to be argued by counsel of his own. The Court refused to compel the witness to answer and state the profits as requested, but overruled Douglas’ objection to the testimony.
Thereupon, he was asked this question: How much ought your house to have made ? This was objected to by Douglas; but the Court permitted the witness to answer, and he said: His house, or rather, a house with the capital of his, ought to have made $35,000 or $40,000 a year, and that his house met with no reverses in the years 1852-3-4 and 5. And this answer was allowed to go to the jury, as evidence of the measure of the plaintiff’s damages — the defendant excepting to the evidence. It was proved by Godshall, that the business of the house of H. & E. Douglas & Co., for the three years in question, promised to realize $20,000 a year for the junior partners ; that is, the witness expected them to make that amount, but did not know the expectation of others, nor was there any computation among them in reference to it, so far as he knew. There is no proof beyond what has already been stated, as to the value of the offer made by the Memphis House, or how far it exceeded what the business of H. & B. Douglas & Co. promised.
The Court in substance, charged the jury — that, if they found the contract was made and'carried into effect, the plaintiff was entitled to recover from the defendant,
The jury, on the 18th of May, 1859, rendered a verdict in favor of McWhirter, for $4,262.84. Douglas moved for a new trial, which was overruled, and took his bill of exceptions, and prosecutes an appeal in the nature of a writ of error, to this Court.
We do not agree with the Circuit Judge in his construction of this contract. In his view, if the Douglas House, as it is called, had, by some bad fortune, or ill luck, made nothing, Douglas was bound to pay McWhir-ter the entire amount of twenty per cent, of the profits of the Memphis House. And on the other hand, if the share of McWhirter, in the profits of the Douglas House, proved to be equal to, or to exceed what he would have received in the Memphis House, Douglas’ contract was saved, and he owed him nothing. In other words, the actual result, or profit, in the business of the two houses, constituted the data, or basis upon which the parties were to settle. This insured McWhirter the chances of the labor and skill of both firms. If his own failed, and the other succeeded, he was safe. If they both succeeded — but the other house beyond his — he was, at all events, to have his part of the excess. Certainly they might have made such a contract. But
This, we take to be the legal effect of the writing. They did not intend to wait, or look to the actual result of the business of these two firms; nor are we permitted to do so. They had already, at the time of the writing, estimated, within certain limits, the difference, or, (as the writing has it,) discrepancy between the value of the two propositions; and the certainty of the same was to be worked out as soon as it could be correctly done. It
Now, according to the view we have already taken of the case, it is apparent upon the face of the contract, that the parties themselves considered that some amount — ranging from one dollar to three thousand dollars — was due from Douglas to MeWhirter. So that, without more, the plaintiff could never be dismissed out of Court; and we apprehend, unless it were shown by proof aliunde the contract, — that his' rights were merely nominal, — he must recover substantial damages — namely, some amount intermediate the one dollar and three thousand dollars — designated by the parties. Perhaps, in such a case — there being no legitimate proof at all, but the writing — it would be fit and just to assume $1,500, with proper interest, as the true sum; and this upon the principle, that the parties themselves had the right to set a value upon the contract in dispute; and having done 'so, their own rule of damages will not be disregarded by the Court: Me-
Another reason why speculative estimates of profits will not be allowed, is, that it is not proper to admit witnesses to testify their opinion, as to the amount of damage which the plaintiff has sustained in their loss, or deprivation. They can only testify as to facts: Sedg-wick, 589, 591. And to permit a witness to testify as to what a mercantile house ought to have made upon a given capital — in order to reach anticipated profits — is even more objectionable. Here McWhirter, in the offer of Cossett and Hill, was to share only in the 'profits. He was to take none of the capital. It was uncertain whether they would all agree — upon the six months probation — to form the partnership; and then it was dissolvable by death, or by the action of either of the parties in thirty day’s time; and the good fortune of the house, in its successive schemes of investment, sale and re-investment — was all to risk. How then could the value of the offer to McWhirter — unless fixed by him and Douglas — be anything but conjectural? It may turn out, therefore, from the very nature of the contract itself, that as to a part of the plaintiff’s claim for damages precise accuracy cannot be attained, because of the impracticability of its establishment by legal proof.
We cannot see that this contract is illegal, as being in restraint of trade, immoral, or against public policy; or that, in its enforcement, it is at all necessary to exercise any power violative of the private rights of the Memphis House, which may lead to social disturbances
How far the members of the firm at Memphis may be protected from answering particular interrogatories relevant and material to the issue in this cause, that may be propounded to them, wo need not now decide, as we cannot see that it is requisite that we should do so, and no special question of the kind has been raised, or argued before us. It is enough to dispose of such questions as they arise.
The result is, the judgment of the Circuit Court must be reversed, and a new trial awarded.