Putnam v. Shoaf
Court of Appeals of Tennessee
620 S.W.2d 510 (1981)
Putnam owned a half partnership interest in the Frog Jump Gin Company (Frog Jump). All the assets of Frog Jump were held in the name of the partnership. As Frog Jump’s debts increased over time, Putnam decided to sell her partnership interest and get out of the business. The Shoafs (defendants) agreed to purchase Putnam’s partnership interest, thereby assuming all her personal liability and partnership debts, by paying $21,000 into the partnership account. Putnam conveyed her partnership interest to the Shoafs by a quitclaim deed, including Putnam’s interest in the personal and real property associated with Frog Jump. After the Shoafs acquired Putnam’s interest in Frog Jump, it was discovered that a bookkeeper had been embezzling from Frog Jump. Frog Jump sued the bookkeeper and banks that honored checks the bookkeeper had forged. Putnam intervened in the lawsuit, claiming she was entitled to half of any amount recovered by Frog Jump. The trial court awarded $68,000 to Frog Jump. Putnam died during the litigation. Putnam’s estate (Putnam Estate) (plaintiff) sued the Shoafs for half of the $68,000, contending that because Putnam had a half interest in the partnership when the banks honored the Bookkeeper’s forged checks, Putnam is entitled to the disputed amount.
Rule of Law
Holding and Reasoning (Nearn, J.)