Davidson v. Clearman
391 S.W.2d 48 (1965)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
A party who fails to substantially perform a contract and recovers under the equitable theory of quantum meruit is not entitled to recover benefits provided for in the original contract, such as attorney's fees, contractual interest rates, or the foreclosure of a contractual lien.
Facts:
- John L. Davidson and his wife contracted with Clearman for the construction of a house.
- The Davidsons executed a mechanic's and materialman's lien contract and a promissory note for $28,750 to secure payment for the construction.
- Clearman began construction, but disputes arose regarding his compliance with the contract's terms.
- The Davidsons paid Clearman $4,000 of the total amount.
- On February 15, 1962, the Davidsons moved into the partially completed house and continued to occupy it.
- The Davidsons refused to make any further payments on the note, claiming that Clearman had not performed his obligations under the contract.
Procedural Posture:
- Clearman sued the Davidsons in a Texas trial court to recover on a mechanic's lien contract and promissory note.
- During trial, Clearman amended his complaint to add an alternative claim for recovery in quantum meruit.
- A jury found that Clearman had not substantially performed the contract but determined the reasonable value of the work and materials he provided was $27,150.
- The trial court entered a corrected judgment for Clearman based on quantum meruit but also awarded him attorney's fees, interest at the contract rate, and foreclosure of the mechanic's lien.
- The Davidsons, as appellants, appealed to the Court of Civil Appeals, which affirmed the trial court's judgment.
- The Davidsons, as petitioners, then appealed to the Supreme Court of Texas.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does a contractor who recovers on a quantum meruit basis, rather than on the contract itself, have the right to enforce the contract's specific provisions for attorney's fees, interest, and foreclosure of a mechanic's lien?
Opinions:
Majority - Justice Griffin
No. A contractor who recovers on a quantum meruit basis cannot enforce the specific remedial provisions of the contract because the right to recover in quantum meruit is independent of the contract. The court reasoned that quantum meruit is an equitable remedy based on an implied promise by law to pay for beneficial services knowingly accepted, not on the express terms of the written agreement. Since the recovery is outside the contract, the provisions for attorney's fees, the 10% interest rate, and the mechanic's lien—all of which arise from the contract—are unenforceable. The court concluded that while interest may be awarded as damages for the wrongful detention of money, it must be calculated at the legal rate (6%) from the date the debt was due, not the higher rate specified in the contract.
Analysis:
This decision firmly establishes the legal wall between remedies under a contract and remedies in equity. It prevents a party who has breached a contract from 'cherry-picking' its benefits, reinforcing the principle that contractual rights are contingent upon contractual performance. The case serves as a clear warning to contractors that failure to substantially perform not only exposes them to damages but also strips them of significant contractual protections like fee-shifting provisions and liens. For future litigants, this ruling clarifies that pleading in the alternative for quantum meruit is a fallback position that carries fundamentally different, and often less advantageous, remedial consequences than a successful breach of contract claim.
