Opinion ID: 1114956
Heading Depth: 1
Heading Rank: 1

Heading: Prohibited Substitution

Text: The double conditional legacy is not a prohibited substitution because it does not: (1) constitute a double disposition, in full ownership, of the same thing to persons called to receive it one after another; (2) impose upon the first beneficiary a charge to preserve and transmit the succession property; and (3) establish a successive order that causes the property to leave the inheritance of the burdened beneficiary and enter into the patrimony of the substituted beneficiary. A prohibited substitution, as defined by Civil Code Article 1520, must have all of these characteristics. Louisiana Civil Code Article 1520, as amended in 1962, provides: Substitutions are and remain prohibited, except as permitted by the laws relating to trusts. Every disposition not in trust by which the donee, the heir, or legatee is charged to preserve for and to return a thing to a third person is null, even with regard to the donee, the instituted heir or the legatee. The Louisiana State Law Institute, in its report to the Legislature accompanying the Trust Code, explained the essential elements of a prohibited substitution, defined by Civil Code Article 1520, as follows: The second paragraph of Article 1520 specifies and defines the disposition prohibited in the first paragraph, which is identical with its French counterpart, Article 896, C.N., except for the provisions relating to trusts. It is, for example, a disposition conceived in these terms: I bequeath my farm Blackacre to Paul, and I charge him to preserve and transmit it at his death to LeDoux. The constituent characteristics of this prohibited substitution that are implicit in this definition are: (1) A double liberality, or a double disposition in full ownership, of the same thing to persons called to receive it, one after the other; (2) Charge to preserve and transmit, imposed on the first beneficiary for the benefit of the second beneficiary; (3) Establishment of a successive order that causes the substituted property to leave the inheritance of the burdened beneficiary and enter into the patrimony of the substituted beneficiary. This is in accord with settled French doctrine and jurisprudence, and it is in this sense that the term substitution is used in the Civil Code, and by derivation from the Code in the Constitution. Report Trust Code 3A LSA.-R.S. p. XXXIII, XXXVIII (1965). We are convinced that the Law Institute's interpretation of Article 1520 is correct. As its report indicates, the Article implies the foregoing definition of a prohibited substitution, and the term is used in this sense in French doctrine and jurisprudence. 3 Civil Law Translations, Aubry & Rau § 694, pp. 307-23; 3 Planiol, Civil Law Treatise §§ 3278-83, pp. 593-95. Moreover, the report of the Law Institute is entitled to great weight as reflecting legislative intent in this instance. The Institute, to open the way for a new trust code which it had been instructed to draft by the Legislature, prepared amendments to Article 1520 to clarify the meaning of a prohibited substitution and to remove any obstacle to an effective trust device in Louisiana. See Oppenheim, Trust CodeIntroductory Comment 3A LSA.-R.S. XXVII p. XXIX (1965). The Legislature evidently endorsed the Law Institute's definition of a prohibited substitution by adopting the amendments and enacting the new trust code on the basis of its report. The definition of a prohibited substitution which we infer from Article 1520, furthermore, is consonant with the original legislative motive for prohibiting substitutions. The reasons assigned for the prohibition are to prevent the making of gratuities to future generations; to prevent property left to an existing generation from being made inalienable, 3 Planiol, supra, § 3197; and to ward off all of the objectionable consequences from such dispositions. See Tucker, Substitutions, Fideicommisa and Trusts in Louisiana Law: A Semantical Reappraisal, 24 La.L.Rev. 439, 454 (1964). The disposition at issue in the present case has none of the characteristics of a prohibited substitution, as defined by Article 1520. First, it does not make double disposition of the same thing, in full ownership, to persons called to receive it one after another. Since the widow's legacy was subject to a suspensive condition, she would not have received the succession in full ownership if she had failed to survive the testator for thirty days. The second legacy to the nephews was under condition of the failure of the condition of the widow's legacy. As a result of the retroactivity of the condition, the nephews could have received the property only in default of the widow's legacy, not after her. Second, there was no charge to preserve resting on the first legatee. It is not necessary for the creation of a substitution that the disposer make use of the identical terms found in Article 1520. It suffices that the charge to preserve and to deliver necessarily result from the tenor of the disposition, or, what amounts to the same thing, that it is impossible to execute the disposition without preserving and making restitution of the property given or bequeathed. See, 3 Aubry & Rau, supra, § 694, p. 315. The disposition at issue in the present case, however, by its wording, purpose and tenor, does not imply a charge to preserve. If the suspensive period had been longer, it could be argued that the legacy would be impossible to execute without a charge to preserve. The brief thirty-day suspensive period, however, allows execution of the disposition without this effect. Finally, for the same reasons that there was no double disposition, the will does not establish a successive order whereby the property could leave the inheritance of the first beneficiary and enter into the patrimony of the substituted beneficiary. The type of double conditional legacy presented in this case has been approved repeatedly by the French Courts and commentators. French jurisprudence has held that there is no prohibited substitution when a legacy, though made in full ownership, is made to depend on a suspensive condition, with the clause that in case the condition fails, the thing shall be given to a third person. 3 Aubry & Rau, supra § 694, p. 309. An illustration of this double conditional legacy is the legacy made to Primus on the condition that he marries, or that he marries before a certain age, or that he lives to a certain age, with the stipulation that, if this condition is not accomplished, the property will be bequeathed to Secundus. Tucker, supra, at 481; 3 Aubry & Rau, supra, at 309; 3 Planiol, supra, § 3295, p. 601. The underlying considerations upon which French jurisprudence has based its approval of such dispositions, according to John H. Tucker, Jr., are as follows: (1) It constitutes two legacies under a suspensive condition, the first legacy under the condition described in the illustration, the second legacy under the condition of the failure of the condition of the first legacy. (2) As a result of the retroactivity of the condition, the second legatee (Secundus) is considered as receiving the property not after the first legatee (Primus), but in default of him, and there is no successive order. (3) There is no real charge to preserve and render resting on the first legatee. (4) In such a case, the testator will be considered to have bequeathed the usufruct to Primus for the period intervening between his receipt of the legacy and the failure of the condition, even if he has not so specified. (5) In some instances, the courts have annulled a conditional legacy (e. g., I bequeath my property to X if he attain 21 years; if he die before that this legacy will fail and be as not written.), as containing a resolutory condition. However, the jurisprudence generally has validated double conditional legacies of the type given in the illustration, where the testator intends to maintain the first legacy, only if the legatee attains a certain age, or accomplishes a fact before a certain age without being concerned with whether the condition is resolutory or suspensive.       Tucker, supra, at 481-82. The court of appeal reasoned that, because the disposition in the present case is indistinguishable from a classic substitution, its enforcement would render Article 1520 and the jurisprudence developed around it meaningless. The rationale is based on a faulty postulate, however, because a classic substitution is one which contains all of the characteristics stated or implied by the second paragraph of Article 1520 and listed in the Law Institute's Report. Thus, it is a disposition bequeathing property to A in full ownership, but requiring that he preserve the property and that, upon his death, it be delivered to B in full ownership. Since the disposition at issue in this case contains none of the three characteristics of a substitution, its enforcement does not conflict with Article 1520. Also, as the appellate court recognized, a review of the Louisiana cases reveals none in which a double suspensive conditional legacy was evaluated. The enforcement of the disposition here, therefore, does not conflict with the holdings in our previous opinions. There is language in some of the cases which, if followed, would nullify conditional donations outside the ambit of Article 1520's strict definition of a prohibited substitution. Many of those decisions may be disregarded as obsolete because they were focused on prohibiting the common law trust in Louisiana, now adopted to some extent in our trust code. See, Succession of Walters, 261 La. 59, 259 So.2d 12, 16 (1972) (Barham, J., concurring); Crichton v. Succession of Gredler, 256 La. 156, 235 So.2d 411, 421 (La.1970) (Sanders, J. dissenting). Fundamentally, however, all of the jurisprudence defining and applying the law of former Article 1520 must be reassessed in light of the amendments by which the Legislature has harmonized our definition of substitutions with French doctrine and the rule that penal and prohibitory laws should be strictly construed. ReportProposed Trust Code 3A LSA-R.S., p. XLI. See, State v. Executors of McDonogh, 8 La.Ann. 171, 230 (1853); Heirs of Cole v. Cole's Executors, 7 Mart.N.S. 414 (1829). We conclude, for these reasons, that the disposition in the present case is not a substitution prohibited by Article 1520.