Court Opinion

ID: 9648269
Source: CourtListenerOpinion
Date Created: 2023-08-23 14:12:14.644896+00
Date Added: 2024-06-11T18:11:58.075093
License: Public Domain

KILGARLIN, Justice,
concurring.
I concur in the court’s judgment only because Jack Truly did not preserve error by seeking an accounting, which I consider to be the proper method for him to recoup that to which he claims he is entitled. Clearly, quantum meruit is not the right vehicle.
Truly was involved in a joint venture. A joint venture is in the nature of a partnership. Brown v. Cole, 155 Tex. 624, 631, 291 S.W.2d 704, 709 (1956); Holcombe v. Lorino, 124 Tex. 446, 455, 79 S.W.2d 307, 310-11 (1935). Consequently, a joint venture is generally governed by the rules applicable to partners. Thompson v. Duncan, 44 S.W.2d 904, 907 (Tex.Comm’n App. 1932, judgm’t adopted). See also J. Crane & A. Bromberg, Crane and Bromberg on Partnership § 35 (1968); H. Reuschlein & W. Gregory, Handbook on the Law of Agency and Partnership § 266 (1979); 47 Tex.Jur.3d, Joint Ventures § 4 (1986). Thus, when a joint venture agreement is silent on an issue, this court will turn to the Texas Uniform Partnership Act. See Park Cities Corp. v. Byrd, 534 S.W.2d 668, 672 (Tex.1976).
In refusing to sign the development loan note and assume joint and several liability for this joint venture debt, Truly breached the joint venture agreement. Tex.Rev.Civ. Stat.Ann. art. 6132b, § 15 (Vernon 1970).
A suit for an accounting is the appropriate remedy for a joint venturer or partner who has breached the joint venture or partnership agreement. See Dobson v. Dobson, 594 S.W.2d 177 (Tex.Civ.App. — Houston [1st Dist.] 1980, writ ref’d n.r.e.) (part*939nership); Lane v. Phillips, 509 S.W.2d 894 (Tex.Civ.App.—Beaumont 1974, writ ref’d n.r.e.) (joint venture). See also Tex.Rev. Civ.Stat.Ann. art. 6132b, § 22 (Vernon 1970). I agree with the court that quantum meruit relief is not a suitable remedy when sought by a venturer who has failed to perform his obligations under the joint venture agreement. See, e.g., White v. Lemley, 328 S.W.2d 694 (Mo.1959); Pem-berton v. Ladue Realty & Const. Co., 237 Mo.App. 971, 180 S.W.2d 766 (1944).1 Further, a materially breaching venturer may not recover damages under the contract. See Schnitzer v. Josephthal, 122 Mise. 15, 16-17, 202 N.Y.S. 77, 78 (1923), affd, 208 App.Div. 769, 202 N.Y.S. 952 (1924) (“As in the case of any claim to damages for breach of contract, [the claimant] must show his own substantial performance of essential conditions” [citations omitted]).
A suit for an accounting of the partnership affords some protection against forfeiture to breaching parties such as Truly. Breach of the joint venture or partnership agreement does not result in the forfeiture of the joint venturer’s or partner’s interest.2 Dobson, 594 S.W.2d at 181-82; Lane, 509 S.W.2d at 898-99. See also Hillman, Misconduct as a Basis for Excluding or Expelling a Partner: Effecting Commercial Divorce and Securing Custody of the Business, 78 Nw.U.L.Rev. 527, 542 n. 57 (1983).
One commentary says:
A joint venture is to be conducted by the parties to the undertaking, and the failure of any party completely to perform his part does not forfeit his fully acquired interest. Notwithstanding defaults and omissions, each has an interest in such assets as have been preserved or accumulated. Thus, default by a member of a joint venture will not justify the other members in excluding him from participation in the accrued assets.
46 Am.Jur.2d, Joint Ventures § 38 (1969). See also 47 Tex.Jur.3d, Joint Ventures § 11 (1986).
The interests of the non-breaching ven-turers are also protected by this procedure. The breaching venturer is not entitled to assets accruing after his default. Id. More important, the breaching venturer must pay, in an accounting, for the damages caused by his misconduct. Dobson, 594 S.W.2d at 181. The Dobson court quoted from Fisher v. Fisher, 352 Mass. 592, 227 N.E.2d 334, 336 (1967): “A partner does not lose his rights in the accrued profits of a firm by reason of breaches of the partnership articles, whether or not committed in bad faith, although of course he will be subject to charges for all unexcused breaches in the final accounting.”
By not seeking an accounting, however, Truly has failed to preserve his right to do so. For this reason, I concur with the decision arrived at by the court.
PHILLIPS, C.J., and RAY, J., join in this concurring opinion.

. The court ably discusses some of the policy reasons disfavoring quantum meruit recovery in this context.
The court, however, incorrectly asserts that the only Texas cases permitting a breaching plaintiff to recover in quantum meruit have involved building or construction contracts. See, e.g., Cotton v. Rand, 93 Tex. 7, 51 S.W. 838, reformed, 93 Tex. 7, 26, 53 S.W. 343 (1898) (agency agreement to procure mineral lands).

. Of course, a different result would obtain when the joint venture agreement contains a forfeiture clause. Dobson, 594 S.W.2d at 181.