Why can't Jars in Jars see the contents of other Jars in Jars if they are in the same Jar?

Somewhere in your configuration, you have ended up with the classname that is being used as the value:

'com.microsoft.sqlserver.jdbc.SQLServerDriver'

with single quotes around it. Normally the class name being loaded is printed without quotes, double or single.

This would explain why you are able to load the class but the API jar is not. Check you configuration/build files for where the driver name is set.

DEMO

The only way I can get a message like yours:

Caused by: java.lang.ClassNotFoundException: 'com.microsoft.sqlserver.jdbc.SQLServerDriver'

and not:

Caused by: java.lang.ClassNotFoundException: com.microsoft.sqlserver.jdbc.SQLServerDriver

Is to deliberately ask to load a class with single quotes in the name. For example:

import java.lang.*;

public class myclass {

        public static void test(String thename) {
                System.out.println("trying " + thename);
                try {
                        myclass test = (myclass) myclass.class
                                .getClassLoader()
                                .loadClass(thename)
                                .newInstance();
                        System.out.println(test.toString());
                } catch (Exception e){
                        System.out.println("failed to load " + thename);
                        e.printStackTrace();
                }
        }

        public static void main(String[] args) {
                test("my.package.itwontexist");
                test("'my.package.itwontexist'");
        }
}

outputs:

trying my.package.itwontexist
failed to load my.package.itwontexist
java.lang.ClassNotFoundException: my.package.itwontexist
    at java.net.URLClassLoader.findClass(URLClassLoader.java:381)
    at java.lang.ClassLoader.loadClass(ClassLoader.java:424)
    at sun.misc.Launcher$AppClassLoader.loadClass(Launcher.java:331)
    at java.lang.ClassLoader.loadClass(ClassLoader.java:357)
    at myclass.test(myclass.java:10)
    at myclass.main(myclass.java:20)
trying 'my.package.itwontexist'
failed to load 'my.package.itwontexist'
java.lang.ClassNotFoundException: 'my.package.itwontexist'
    at java.net.URLClassLoader.findClass(URLClassLoader.java:381)
    at java.lang.ClassLoader.loadClass(ClassLoader.java:424)
    at sun.misc.Launcher$AppClassLoader.loadClass(Launcher.java:331)
    at java.lang.ClassLoader.loadClass(ClassLoader.java:357)
    at myclass.test(myclass.java:10)
    at myclass.main(myclass.java:21)

Its possible that you are getting driver value from configuration, e.g.

my.driver = 'com.microsoft.sqlserver.jdbc.SQLServerDriver'

And that configuration is returning value with single quotes. Please check your configuration files.