Colorado § 7-60-136 - Effect of dissolution on existing liability.

§ 7-60-136. Effect of dissolution on existing liability.

(1) The dissolution of the partnership does not of itself discharge the existing liability of any partner.

(2) A partner is discharged from any existing liability upon dissolution of the partnership by an agreement to that effect between such partner, the partnership creditor, and the person or partnership continuing the business; and such agreement may be inferred from the course of dealing between the creditor having knowledge of the dissolution and the person or partnership continuing the business.

(3) Where a person agrees to assume the existing obligations of a dissolved partnership, the partners whose obligations have been assumed shall be discharged from any liability to any creditor of the partnership who, knowing of the agreement, consents to a material alteration in the nature or time of payment of the creditor's obligations.

(4) The individual property of a deceased person who was a partner shall be liable, to the extent the deceased person was or would have been liable under section 7-60-115, 7-60-118, or 7-60-134, for all obligations of the partnership incurred while the deceased person was a partner but subject to the prior payment of the deceased person's separate debts.

Source: L. 31: p. 666, § 36. CSA: C. 123, § 36. CRS 53: § 104-1-36. C.R.S. 1963: § 104-1-36. L. 95: (4) amended, p. 780, § 7, effective May 24. L. 2004: (2), (3), and (4) amended, p. 1428, § 91, effective July 1.

ANNOTATION

Conditions for discharge from liability found to exist. Wester & Co. v. Nestle, 669 P.2d 1046 (Colo. App. 1983).

Trial court erred in entering summary judgment since dissolution of partnership, without more, did not determine partner's remaining obligations to his partners; rather, obligations are dependent upon a variety of factual and legal issues, such as the partner's right to dissolve the partnership and the propriety of other partners' actions in winding-up or continuing the partnership. Travers v. Rainey, 888 P.2d 372 (Colo. App. 1994).

One partner's liability for overdue employment taxes was not discharged by an agreement concerning payment that was made by the other partner and the internal revenue service. Such agreement was merely an act of forbearance and did not constitute a material alteration of the nature or time of payment of the obligations as required by subsection (3) of this section. U.S. v. Hays, 877 F.2d 843 (10th Cir. 1989).

Where the limited partnership benefited from the loan entered into after the filing of the partnership certificate, the general partners were estopped from denying the validity of their acts on behalf of the partnership, even though the limited partnership was declared void as to the limited partner. Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).

Partner could not avoid his liability to his partners or lessor under the Soldiers' and Sailors' Civil Relief Act by providing notice of termination of a lease to his partners since termination of a lease under the Act can only be accomplished by providing notice in writing to the lessor. Travers v. Rainey, 888 P.2d 372 (Colo. App. 1994).

A limited partnership that is void as to a limited partner is not void as to the general partners. The general partners were liable because at the time the limited partnership's obligation to the lender arose, all parties had contracted in accordance with their belief based on the filing of a partnership certificate with the secretary of state that a limited partnership existed. Therefore, the general partners were jointly and severally liable when they executed a note and deed of trust to the lender. Also, because the limited partnership benefitted from the proceeds of the loan, the general partners were estopped from denying the validity of their acts on behalf of the limited partnership. Finally, regardless of when the limited partnership was dissolved, the general partners were not relieved of their personal liability for the partnership's obligations by virtue of the dissolution. Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).

Applied in Faricy v. J. S. Brown Mercantile Co., 87 Colo. 427, 288 P. 639 (1930) (decided prior to the earliest source of § 7-60-136); Colo-Tex Leasing, Inc. v. Neitzert, 746 P.2d 972 (Colo. App. 1987); Black v. First Fed. Sav. & Loan Ass'n, 830 P.2d 1103 (Colo. App. 1992).