Putnam v. Shoaf

620 S.W.2d 510 (1981)

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Nature of the Case

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Facts

The Frog Jump Gin was a partnership with a spotty financial record of profits and losses in some years. One of the partners, Mrs. Putnam desired to sever her relationship with the other two partners. The partnership was heavily indebted to The Bank of Trenton and Trust Company. John and Marie Shoaf displayed an interest in obtaining Mrs. Putnam's 1/2 interest in the partnership. The books revealed a negative financial position of $90,000. The Shoafs agreed to take over her position if Mrs. Putnam and the Charltons (the other partners) would each pay $21,000 into the partnership accounts. Both parties paid the monies in, and the Shoafs assumed all partnership obligations. A quitclaim deed was executed. When a new bookkeeper was hired, it was learned that the old bookkeeper had engaged in a scheme of systematic embezzlement. Gin sued the bookkeeper and the banks that honored the forged checks. Mrs. Putnam was allowed to intervene claiming an interest in any fund paid by the banks and the judgment was in excess of $68,000. The monies were properly divided, and the estate of Mrs. Putnam and the Shoafs argued about their $34,000 windfall.