Opinion ID: 2491629
Heading Depth: 1
Heading Rank: 7

Heading: Principles of Obligations Law

Text: The law of obligations is found in Book III of the Louisiana Civil Code, and is entitled Of the Different Modes of Acquiring the Ownership of Things. Whereas property law encompasses the legal relationship which a person has in things, the law of obligations deals with a specific legal relationship between persons. The Civil Code defines an obligation as a legal relationship whereby a person, called the obligor, is bound to render a performance in favor of another, called the obligee. La. C.C. art. 1756. Obligations may arise from contracts and other declarations of will. La. C.C. art. 1757. In a contract of sale, for example, the seller is obligated to deliver the thing sold and to warrant to the buyer ownership and peaceful possession of, and the absence of hidden defects in, that thing. The seller also warrants that the thing sold is fit for its intended use. La. C.C. art. 2475. [44] Specifically, the seller warrants the buyer against redhibitory defects, or vices, in the thing sold, as follows: A defect is redhibitory when it renders the thing useless, or its use so inconvenient that it must be presumed that a buyer would not have bought the thing had he known of the defect. The existence of such a defect gives a buyer the right to obtain rescission of the sale. A defect is redhibitory also when, without rendering the thing totally useless, it diminishes its usefulness or its value so that it must be presumed that a buyer would still have bought it but for a lesser price. The existence of such a defect limits the right of a buyer to a reduction of the price. La. C.C. art. 2520. Thus, when defects are discovered in a thing sold which were not apparent, or hidden, at the time of the sale, the law of obligations provides to the buyer a cause of action in redhibition and the right to sue for rescission of the sale or for a reduction of the purchase price. However, the seller owes no warranty for defects in the thing that were known to, or should have been discovered by, a reasonably prudent buyer. La. C.C. art. 2521. When the defects of the thing sold are apparent, the law of obligations does not provide a cause or right of action to the buyer. Thus, the Civil Code makes a distinction between apparent (overt) and non-apparent (hidden) defects in a thing sold, and what rights and causes of action are provided for the buyer/new owner, within the law of obligations. Obligations may also arise directly from the law, regardless of a declaration of will, in instances such as wrongful acts, the management of the affairs of another, unjust enrichment, and other acts or facts. La. C.C. art. 1757. An example of an obligation that arises as a matter of law is found in La. C.C. art. 2315, which establishes the basis of tort liability and provides: [e]very act whatever of man that causes damage to another obliges him by whose fault it happened to repair it. [45] In general, obligations are divided in the Civil Code into strictly personal, heritable, and real. An obligation is strictly personal when its performance can be enforced only by the obligee, or only against the obligor. La. C.C. art. 1766. An obligation is heritable when its performance may be enforced by a successor of the obligee or against a successor of the obligor. La. C.C. art. 1765. A real obligation is a duty correlative and incidental to a real right. La. C.C. art. 1763. [46] Thus, a real obligation does not exist in the absence of a real right. Real obligations are pertinent to our discussion of the present issue because a real obligation and real right both attach to a thing. La. C.C. art. 1764, Revision Comments1984, (b). La. C.C. art. 1764 explains the effects of a real obligation: A real obligation is transferred to the universal or particular successor who acquires the movable or immovable thing to which the obligation is attached, without a special provision to that effect. But a particular successor is not personally bound, unless he assumes the personal obligations of his transferor with respect to the thing, and he may liberate himself of the real obligation by abandoning the thing. The nature of a real obligation has been thus described: Real obligations are always duties incidental and correlative of real rights. They are obligations in the sense that they are duties imposed on a particular person who owns or possesses a thing subject to a real right, and they are real in the sense that, as correlative of a real right, these obligations attach to a particular thing and are transferred with it without the need of an express assignment or subrogation. They are also real in the sense that the responsibility of the obligor may be limited to value of the thing. [47] Both real rights and real obligations may be contrasted with personal rights. The legal right that a person has against another person to demand the performance of an obligation is called a personal right. [48] Distinct from a real right, which can be asserted against the world, a personal right is effective only between the parties. La. C.C. art. 1758. [49] This court has declared that a personal right ... defines man's relationship to man and refers merely to an obligation one owes to another which may be declared only against the obligor. Harwood Oil & Mining Co., 240 La. at 651, 124 So.2d at 767, citing Reagan, 235 La. at 541, 105 So.2d at 214. In some instances, a real right and a personal right may appear to be the same, but the underlying nature of the rights distinguishes them. For example, [a]ccording to appearances, a usufructuary and a lessee seem to have the use and enjoyment of a house in much the same way. But, technically, the usufructuary has a right in the enjoyment of a house; the lessee has a right against the owner of a house to let him enjoy it. One has a real right and the other a personal right. [50] This court has held [u]nder the civil law concept, a lease [a contract about property] does not convey any real right or title to the property leased, but only a personal right. Richard v. Hall, 2003-1488, p. 17-18 (La.4/23/04), 874 So.2d 131, 145. That a lease is not a real right under the civil law is well settled. Reagan, 235 La. 529, 541, 105 So.2d 210, 214. This concept was further explained: The rights of use, enjoyment, and disposal are said to be the three elements of property in things. They constitute the jura in re : The right of a lessee is not a real right, i.e., a jus in re. In other words, the lessee does not hold one of the elements of property in the thing. His right is a jus ad rem, a right upon the thing. Reagan, 235 La. at 541, 105 So.2d at 214, citing In Re Morgan R.R. & S.S. Co., 32 La.Ann. 371 (1880). Real rights, and real obligations pass to a subsequent acquirer of the thing to which it is attached without the need of a stipulation to that effect. La. C.C. art. 1764, Revision Comments1984, (c). [51] A personal right, by contrast, cannot be asserted by another in the absence of an assignment or subrogation. La. C.C. art. 1764, Revision Comments1984, (d) and (f). [52] We now examine the jurisprudential rule at issue in light of the principles of property law and the law of obligations.