This appeal is from a partial summary judgment of the Fayette Circuit Court holding appellant, Setzer’s Steel Systems, Inc., [Setzer] liable to appellee, Chenault Development Corporation, [Chenault] for rents and taxes arising out of a lease agreement.
On August 15, 1975, Chenault entered into a lease and construction agreement with Racquet Times, Inc., fоr the construction of a racquetball facility on property
On October 8, 1975, Racquet Times assigned its leasehold to a joint venture comprised equally of itself and U.S. Racquetball Courts, Inc., to do business as Racquet Times (Lexington). Chenault gave its written and signed consent to this assignment. Simultaneously with this transaction, Set-zer subcontracted with the joint venture to construct part of the building. Setzer also became a partner in the joint venture by purchasing a ten perсent undivided interest.
In April, 1976, the joint venture assigned its leasehold to a new joint venture comprised of Racquet Times, Inc., U.S. Rаcquetball Courts, Inc., and Setzer, to be known as Racquet Time of Lexington. The new joint venture assumed all the obligations of the original lease, and agreed to pay all rents from and after April, 1976. This assignment was made without Che-nault’s written and signed consent. The building was completed and the term of the lease began at this time.
In March, 1977, a settlement agreement was reached in the Fayette Circuit Court in a separate lawsuit brought by Setzer against Racquet Times. Setzer acknowledged its partnership and tenant status in the joint venture. The settlement, among other things, gave Setzer an additional five percent undivided interest in the joint venture.
As of July, 1984, the joint venture quit paying rent. Chenault filed an action in the Fayette Circuit Court in August of thаt year, and was granted partial summary judgments in December, 1984, February, 1985, and December, 1985. This appeal was taken from thе last judgment.
Setzer first argues that KRS 362.230 absolves it from any personal liability, and that it is only liable, if at all, out of the partnership property. KRS 362.230 states:
A person admitted as a partner into an existing partnership is liable for all the obligations of the partnership arising before his admission as though he hаd been a partner when such obligations were incurred, except that the liability shall be satisfied only out of partnеrship property-
Setzer takes the position that since the lease was originally signed in August, 1975, and it did not become a рartner in the joint venture until October, 1975, this statute relieves it from personal liability for the rents and taxes. This argument ignores the diffеrence between when a debt is incurred and when a debt arises. In this case, although the obligation to pay rent and tаxes was incurred in August, 1975, when the lease was originally signed, and before Setzer’s involvement in the venture, the obligation arose in April, 1976, after Setzеr became a partner. Therefore, KRS 362.230 does not provide Setzer with any relief.
Setzer also argues that the assignment from Racquet Time (Lexington) to the second joint venture was ineffective because it lacked Chenault’s written аnd signed consent. Therefore, Setzer argues, there was no mutuality of obligation between it and Chenault. In support therеof, Setzer cites Green River Steel Corp. v. Globe Erection Co., Ky.,
[Wjhere an agreement is made, subjeсt to the consent or approval of a third person, it must be looked on as a conditional agreement, dependent on such consent being given within a reasonable time, in default of which the agreement must be taken not to hаve been effective. Id. at 509.
This states the broad, general rule. However, Green River involved an original construction contract between two parties, conditioned uрon approval by a federal
Facts in the present case are entirely different, and call for a rule more focused upon landlord-tenant law. That rule is found in Cities Service Oil Co. v. Taylor,
Finally, Setzer claims the conveyance of its fifteen percent interest in the joint venture on December 31, 1984, ended its obligation. under the lease, and because of this avoidance defеnse the subsequent partial summary judgment was erroneous.
The record shows that Setzer transferred for a consideratiоn of five hundred dollars its fifteen percent interest in the joint venture, along with its obligations for rent and taxes, to a corрoration we think not coincidentally named “Setzer’s Investments Corporation.” Remarkably, this transaction took place between Chenault’s obtention of its first and second partial summary judgment awards against Setzer. We are convinсed that the transfer to “Set-zer’s Investments Corporation” was void as violative of Kentucky’s fraudulent transfer statute, KRS 378.010, and produced no issue of fact or law that would make the trial court’s granting of the partial summary judgment motion erroneous.
The judgment of the Fayette Circuit Court is affirmed.
All concur.