FILED

January 28, 1999

Cecil Crowson, Jr.

Appellate C ourt

Clerk

 IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

EARL L. KEISTER, JR., and ) C/A NO. 03A01-9807-CH-00225

CHARLOTTE KEISTER, )

) KNOX CHANCERY

Plaintiffs-Appellants, )

) HON. H. DAVID CATE,

v. ) CHANCELLOR

)

J. HARRY LEWIS and )

ERWIN A. COLLINS, ) AFFIRMED

) AND

Defendants-Appellees. ) REMANDED

MARY JANE BORDEN, EGERTON, McAFEE, ARMISTEAD & DAVIS, P.C.,

Knoxville, for Plaintiffs-Appellants.

DONALD K. VOWELL, and KENNETH E. MORROW, Knoxville, for DefendantsAppellees.

O P I N I O N

Franks, J.

This is an action to recover under a contract of sale for the purchase of

real estate entered between plaintiffs and a limited partnership against defendants,

genera l partners of that partnership. 

The partnership agreed to return the real estate to the plaintiffs who, in

turn, released the partne rship “from any further liabilities under the contract of sale”. 

The Trial Judge held that the release of the partnership, released the defendant
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partners from any liability, and plaintiffs have appealed.

The dispositive issue on appeal is whether the re lease of the partnership

released the partners from any contra ctual liability under the sales agreement.

The contract of sale was entered in 1982 between the plaintiffs and

Northside Properties Ltd., a limited partnership. The contract was executed by the

buyer, as Northside Properties, Ltd., by each of the defendants herein who executed

the agreement as a “general partner”.

At the time of the release of the partnership, which was court-approved,

because the partnership was in receivership, it was agreed by the partnership and the

plaintiffs that the release would not “affect any claims” which the plaintiffs “may have

against the general partners.” The plaintiffs’ theory in their complaint, is that:

“pursuant to Tennessee law, the defendants, as general partners, are personally liable

for the terms of the Contract of Sale.” They further point to the Uniform Partnership

Act in this jurisdiction where it is stated that all partners are liable, jointly and

severally, for everything chargeable to the partnership.” T.C.A. §61-1-114. This is a

correct statement of the law but does not address the Trial Judge’s holding which

essentially states that since the partners’ contractual liability is vicarious by the terms

of the Act, the rele ase of the partne rship releases the partne rs. 

We believe the Trial Judge reached the proper result, and we affirm.

It is widely held that where the partnership entity is released from all

liability, the partners’ liability for the partnership’s acts and omissions is also released,

because such liability is vicarious. See, e.g.,Kinetics, Inc. v. El Paso Products Co., 99

NM 22, 653, P.2d 522 (1982); M.A. Shaw, Individually and d/b/a Contractors Co-op

Co., and d/b/a 3C Roofing v. Kennedy Ltd., et al., 879 S.W.2d 240 (Ct. App. TX.

1994). There can be no doubt that these partners signed the contract in their

representative capacity as general partners, and on this record have no personal
3

liability to plaintiffs independent of the Contract. Accordingly, the release having

extinguished their vicarious liability, the judgment entered for the defendants was

appropriate and the Trial Court is affirmed.

The cost of the appeal is assessed to appellants.

__________________________

Herschel P. Franks, J.

CONCUR:

___________________________

Houston M. Goddard, P.J.

___________________________

Charles D. Susano, Jr., J.