Case Name: William L. KEARNEY and Cecelia Lazard Kearney v. Hardy MALONEY et al.
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1973-11-02
Citations: 296 So. 2d 865
Docket Number: No. 5835
Parties: William L. KEARNEY and Cecelia Lazard Kearney v. Hardy MALONEY et al.
Judges: Before SAMUEL, STOULIG and SCHOTT, JJ.
Reporter: Southern Reporter, Second Series
Volume: 296
Pages: 865–870

Head Matter:
William L. KEARNEY and Cecelia Lazard Kearney v. Hardy MALONEY et al.
No. 5835.
Court of Appeal of Louisiana, Fourth Circuit.
Nov. 2, 1973.
On Rehearing Dec. 10, 1973.
On Limited Rehearing June 11, 1974.
Murray & Murray, Ltd., Stephen B. Murray, New Orleans, for plaintiffs-appellants.
Shushan, Meyer, Jackson, McPherson & Herzog, Donald A. Meyer, New Orleans, for Hardy Maloney, defendant-appellee.
Flettrich & Hennesy, Albert J. Flettrich, New Orleans, for Dryades Savings and Loan Assn., defendant-appellee.
Joseph F. Blasi, Jr., John J. Blasi and Thomas J. Blasi, New Orleans, for James H. Smith, defendant-appellee.
Before SAMUEL, STOULIG and SCHOTT, JJ.

Opinion:
STOULIG, Judge.
Plaintiffs have appealed a judgment maintaining defendants' exception of prescription and dismissing their suit. The ruling of the trial court is based on the allegations in plaintiffs' petition, which, for the purposes of deciding this exception, are deemed to be true.
On March IS, 1967, plaintiffs, William L. Kearney and Cecelia Lazard Kearney, signed an agreement to buy from Hardy Maloney a house located at 1013 West William David Parkway in Metairie. James H. Smith was the realtor who brought buyer and seller together. On May 15, 1967, plaintiffs acquired title through an act of sale and resale from Maloney to Dryades Savings and Loan Association to plaintiffs. The seller, the realtor and the lending institution were all named defendants.
It was not until plaintiffs moved in that they learned the foundation and supports had been irreparably damaged by a fire of which they had not been made aware before taking title. They claim the sellei made repairs only to those parts of the house that were visible and readily inspect-able. Plaintiffs consulted contractors and engineers with a view toward effecting the necessary repairs, but they were advised it was not economically feasible to do so.
Plaintiffs did not precisely state when they learned of the concealed fire damage or when they abandoned hope of remedying it. In fact their allegation as to the time of discovery, upon which the defendants' plea of prescription is based, reads: " Petitioners do not recall the date on which they were advised, except to state that it was more than one year after the date of purchase of the said home, and more than one year prior to the filing of this action." Suit was filed May 11, 1972.
The relief sought by plaintiffs, as reflected by their prayer, is for a judgment " rescinding the sale and ordering defendants to return to petitioners the price paid for the said home " pius damages. This demand is based on allegations of fraudulent conduct by each defendant involved in the transaction. Plaintiffs allege these specific acts of fraud:
1. The seller represented the house was in sound condition when he knew it was not.
2. The realtor knew of the fire damage, and not only failed to disclose this information, but further represented the home to be in sound condition.
3. The homestead learned of the damage after the buy-sell agreement was signed but before the act of sale was passed, and withheld this information from plaintiffs.
Defendants contend that this petition sets forth an action in redhibition that is subject to the one-year limitation set forth in LSA-C.C. arts. 2534 and 2546; that plaintiffs admit suit was filed more than one year after the sale and more than one year after they discovered and abandoned any thought of repairing the defective structure; and that, therefore, the right to sue for an avoidance of the sale has prescribed.
Plaintiffs concede that if redhibition is their exclusive remedy the judgment of the trial court is correct. However, they argue the allegations of fraud setting forth affirmative misrepresentations as to the quality of the object exempts them from the one-year limitation imposed in actions of redhibition and permits them to bring an action in nullity under LSA-C.C. art. 2547. They point out the prescriptive period for rescission of a contract based on error induced by fraud is five years under LSA-C.C. art. 3542. In other words, they claim the affirmative misrepresentation as to quality of the thing sold gave them the option to bring an action in redhibition or an action to rescind the contract.
We find merit in plaintiffs' position. When we analyze those articles defining the liability of the seller under various circumstances when the sale is judicially avoided, the logic of plaintiffs' contention is persuasive. We note at the outset the introductory article of Title VII of the Civil Code dealing with the contract of sale states:
"In all cases, where no special provision is made under the present title, the contract of sale is subjected to the general rules established under the title: Of Conventional Obligations.'' Art. 2438.
Chapter 6 of this title, addressing itself to the Obligations of the Seller, includes a section (3) entitled "Of the Vices of the Thing Sold" (Articles 2520-2548). These articles, inter alia, set forth the seller's liability under three different sets of circumstances, namely, (1) when he delivers a defective object to the buyer but is unaware of the vice; (2) when he knows of the vice at the time of delivery and fails to disclose it to the buyer; and (3) when he is aware of a defect, but affirmatively represents to the buyer the object has a quality he knows it does not possess.
In the first instance if the contract is avoided, the good faith seller must " restore the price, and reimburse the expenses occasioned by the sale, as well as those incurred for the preservation of the thing ." Article 2531. In the second and third instances, the seller in bad faith may be made to restore the price, to reimburse the expenses occasioned by the sale (including the buyer's attorney's fees), and to respond in damages. Articles 1934, 2545 and 2547. This is true whether the seller's breach was a failure to disclose or an affirmative misrepresentation as to quality. For purposes of comparison, we quote:
"The seller, who knows the vice of the thing he sells and omits to declare it, besides the restitution of price and repayment of the expenses, including reasonable attorneys' fees, is answerable to the buyer in damages." Art. 2545.
"A declaration made by the seller, that the thing sold possesses some quality which he knows it does not possess, comes within the definition of fraud, and ought to be judged according to the rules laid down on the subject, under the title: Of Conventional Obligations.
"It may, according to the circumstances, give rise to the redhibition, or to a reduction of price, and to damages, including reasonable attorneys' fees, in favor of the buyer." Art. 2547.
How Article 2547 differs from Article 2545 is in affording the buyer victimized by an affirmative representation the option of proceeding in redhibition or in nullity to have his action " judged according to the rules laid down on the subject, under the title: Of Conventional Obligations." Article 2438 states where specific rules are enacted concerning sales the contract and all actions arising therefrom are governed thereby. The article makes it clear that only in the absence of a specific rule does the law regulating conventional obligations govern. As we view it, the redactors of the Code enacted Article 2547 and adopted language similar to Article 2438 in its passage to clearly state the buyer, relying on a false declaration as to quality in entering the contract, was not restricted to the rules set forth in the red-hibition section in seeking redress.
Article 2547 has no counterpart in the Code Napoleon. However, Article 2534, establishing the one year prescriptive peri od for actions in redhibition is derived from Code Napoleon Article. 1648, which required institution of such actions "within a short time."
In commenting on the prescriptive period in cases of redhibition, Planiol in his Treatise on The Civil Law distinguishes between the action in redhibition and the action in nullity that might result from the sale of a defective object. Section 1466 states in part:
"In the terms of Art. 1648, these actions should be instituted 'within a short time' which the law has not fixed. The judge therefore has, in principle, discretionary power in determining whether the buyer still has time to act (Cass., 27 June 1887, D. 88.1.300, S. 87.1.316: Cass. Civ., 8 April 1925, D. 1927.1.41, P. and S. 1925.1.131). However it is intended chat he should conform to local customs when these exist (same article)."
In the following section the French commentator explains the rationale behind allowing the buyer a longer time within which to bring his suit where the error as to quality existed at the time of the sale but was concealed by the seller, as follows:
"Because of this exceptional rule, it is very important to distinguish the redhibi-tory action founded on a concealed vice, and the action in nullity because of an error as to a substantial quality. The first prescribes in a very short time, the second prescribes in ten years (Art. 1304). If the law accords only a brief delay to act in the case of vice, it is because such vice has perhaps not always existed, and it may arise after the sale, in which case the vendor is not responsible, while the substantial quality of a thing does not change; it is inherent in its nature."
In enacting LSA-C.C. art. 2547, we think the redactors of the Civil Code incorporated into Louisiana law the distinction pointed out by Planiol between redhi-bition and nullity. Accordingly, we find the seller cannot avail himself of the provisions of LSA-C.C. art. 2534 to have plaintiffs' suit against him dismissed.
As to the realtor and the homestead, plaintiffs' suit against them is not governed by that section of the Code regulating actions in redhibition simply because there is not a vendor-vendee relationship between these protagonists. While it is true the homestead is a nominal vendor for the limited purpose of securing a vendor's lien on the property on which it holds the mortgage, our courts have held it is not a seller within the contemplation of codal articles dealing with redhibition. See Ready v. Rhea, 222 So.2d 560 (La.App. 2d Cir. 1969). It therefore follows that since Smith and Dryades Savings and Loan Association are not vendors in the sale, they cannot urge the redhibitory prescriptive limitation of one year in bar of plaintiffs' action against them.
For the reasons assigned, the judgment of the trial court insofar as it maintains the exceptions of prescription urged by Hardy Maloney in bar of an action in red-hibition is affirmed; however, insofar as it dismissed the plaintiffs' suit in its entirety said judgment is reversed and the matter is remanded to the trial court for further proceedings consistent with the views herein expressed. Appellees are to pay all costs of this appeal.
Affirmed in part; reversed in part; and remanded.
. Volume 2, Part I, translated by the Louisiana State Law Institute.