### FILED January 28, 19

99 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. ) CHANCELL OR ) J. HARRY LEW IS and ) ERWIN A. COLLINS, ) AFFIRMED ) AND Defendants-Appellees. ) REMANDED

MA RY JA NE B ORD EN, E GER TON , McA FEE, A RM ISTE AD & DAV IS, P.C ., Knoxville, for Plaintiffs-Appellants.
DONA LD K. VO WELL, and K ENNET H E. MOR ROW, Kn oxville, for DefendantsAppellees.

O P I N I O N Franks, J.
This is an action to recover under a cont ract of sale for

the purchase of real estate entered between plaintiffs and a li mited partnership against defendants, genera l partner s of tha t partner ship.

The partn ership agre ed to return th e real estate to th e plaintiffs w ho, in turn, rele ased th e partne rship “f rom an y further lia bilities un der the c ontract o f sale”. The Trial Judge held t

hat the release of the partner ship, rele ased the defendant2

partners from any

liabili ty, and plaintiffs have a ppealed. The dispo sitive issue on appeal is w hether the re lease of the partnership released the partners fro m any contra ctual liability under th e sales agree ment.

The contract of sal

e was entered in 1982 between t he plaintiff

s and Northside Propert

ies Ltd., a

limited part

nership. The contr

act was executed by

the buyer, as Nort

hside Properti

es, Ltd., by

each of the defendants her ein who executed the agreement as a “gene ral partner

”. At the time of the r

elease of the par

tnership, whic

h was court-approved, because the partne

rship was in recei

vership, it

was agreed by the par

tnership and t

he plaintiffs that the rel

ease would not “affect any claims” which the plaintiffs “may have against the g eneral partn ers.” The p laintiffs’ theo ry in their comp laint, is that: “pursuan t to Tenne ssee law, the defenda nts, as gener al partners, are personally liable for the term s of the C ontract of S ale.” They fu rther point to th e Unifor m Partner ship Act in this j urisdicti

on where it is st

ated that al

l partners ar

e liable,jointly

and severally, for every

thing chargeable to the partnership.” T.C.A. §61-1-114. This is a correct sta

tement of the law but does not address the Trial Judge’s holdi ng which
essentia lly stat es th at si nce t he par tners’ co ntra

ctua l li abil ity is vicari ous by

the t erms of the A ct, the rele ase of th e partne rship rel eases th e partne rs.

We beli eve t he Tri al Ju dge re ached

the pr oper r esul t, a nd we aff

irm. It is widely held th at where th e partnersh ip entity is released f rom all liabili ty, t he partners’ l

iabilit y for the par

tnership’s

acts and omissions

is also rel

eased, becau se such liability is vic arious. See, e.g., Kinetics, I nc. v. El Paso Products Co. , 99 NM 22 , 653, P.2d 522 (198 2); M.A. Shaw, Individuall y and d/b/a Contractor

s Co-op Co. , and d/b/a 3C Roofing v. Kennedy Lt d., et al ., 8 79 S. W.2d 240 (Ct . App.TX. 1994). Th ere can be no doub t that these par tners signed the contrac t in their representat

ive capacity

as general part

ners, and on thi s record have no personal3

liabili ty to pl aintiffs i

ndependent of the Contract . Accordingly , the release having extinguished t

heir vicarious liabil

ity,the judgment enter

ed for the defendants

was appropriate and t

he Trial Court i s affirmed. The cost of the appeal is assessed to appellants.

__________________________ Herschel P. Franks, J.
CONCUR:

___________________________ Houston M. Godd ard, P.J.

___________________________ Charles D. Susano, Jr., J.