Centex Corporation v. Dalton
Supreme Court of Texas
840 S.W.2d 952 (Tex. 1992)
Centex (defendant) agreed to pay executive Dalton (plaintiff) $750,000 over three years if Centex successfully acquired a group of Texas thrift institutions with his help, but shortly after signing, Centex learned the federal Bank Board would likely disapprove such finder's fee payments; Centex proceeded with the acquisition anyway, and the Bank Board approved the acquisition itself but specifically prohibited the fee payment to Dalton, later followed by a broader Bank Board amendment and, after Congress replaced the Bank Board with the Office of Thrift Supervision, an explicit OTS order barring the payment. Dalton, having fully performed his own obligations, sued for the $750,000; the trial court found the contract enforceable despite the regulatory changes, and Centex appealed.
Whether a party's performance of a contract is excused by supervening impossibility due to illegality when a change in governing law renders that performance illegal, even if the change was foreseeable at the time of contracting, and whether a party who never pled quantum meruit may raise it for the first time on appeal.