Court Opinion

ID: 7186132
Source: CourtListenerOpinion
Date Created: 2022-07-24 16:52:34.987926+00
Date Added: 2024-06-11T16:16:04.594396
License: Public Domain

Same Case — On a Re-hearing.
An annuity or rente constitute exists only when a sum of money is delivered ; but where real estate is conveyed, and, by express agreement, the price is converted into a capital bearing interest forever, as in this case, then the contract is, to all intents and purposes, a contract of rent (rente fonciere), and the debtor not liable for the rent that becomes due after he has alienated the property.
But it is contended, that the contract under consideration has but one of the qualities called for by the definition, viz: the conveyance of a tract of land ; and that it is wanting in this essential particular, viz : there is no reservation of the annual rent of a certain sum of money, which the other party has bound himself to pay.
In my humble opinion, this statement is clearly erroneous, and in open contradiction with the very wording of the original act, which reads as follows :
. “ La présente vente ost faite pour et moyennant la somme de ***; étant ex-pressément convenu entre les parties que l’acquéreur aura le droit de prolonger indéfiniment et a sa volonté, lui, ses héritiers et ayans-cause, le remboursement, en payant au vendeur ou á ses héritiers ou ayans-cause, annuellement, les intéréts de la dite somme, sur le pied de sept pour cent par an, payable d’avance *** ; le tout ainsi quel’acquéreur s’oblige. (To all which stipulations the purchaser binds himself.)
' Of course, it is very plain to me, that all the reasoning based upon the want of obligation on the part of the vendee, falls to the ground.
Besides, Article 2750 is not the sole one that treats of the contract of rent, and other Articles must be examined to comprehend fully this object.
Article 2752 declares that a contract made bearing the name of a sale, in which the seller does not stipulate the payment of the price, but a capital bearing interest forever, is a contract of rent.
The sale now under consideration appears to be embraced in this Article, for the property is valued at a certain price, which represents the capital, and it bears interest forever.
It is also objected, that there is no obligation on the part of the vendee to pay the rent, which the other party could enforce by an action distinct from his demand to enforce payment of the capital.
' It is true, answers Mr. Justice Cole, that the vendor in the contract has the right of demanding the capital as well as the interest, in default of payment of the interest, and that the interest is payable in advance; but the parties, by thus changing the features of their contract, on immaterial points, from those of the contract of rent in the Civil Code, have not destroyed the material characteristics of the contract of rent -which are impressed upon this act.
Besides, the vendor would have the privilege of waiving the right of demanding the capital, and might sue for the interest alone.
The clause in the sale making the capital due at once in the event the interest be not paid, is made for the benefit of the vendor, and may be waived by him.
The essential parts of the contract of rent are, that one party cedes to the other in perpetuity a tract of land, or any other immovable property, and agrees that the latter shall hold it as owner, but reserving to the former an annual rent. The Civil Code does not make it essential that the rent should not be made payable in advance, nor that in default of payment of the rent, the capital should not be exigible at once, as well as any rent that might be due at the commencement of the suit. 0. 0. 2750, 2751.
It has been finally objected, that the rent charge being inherent in the property burthencd with it, is itself susceptible of being mortgaged, C. C. 2763, and as the rent was payable in advance, there is nothing to mortgage.
The right of mortgage given by .this Article is for the benefit of the vendor, arid if he thinks proper to mould his contract so that it cannot be enforced, there is nothing in the law to prevent him from so doing.
In conclusion, I beg leave to quote a few passages from a very old book, viz : “ Dictionnaire de Droit et do Pratique, par Olaude-Joseph De Ferriere. Paris, 1754.” Both this author and Pothier agree with the Civil Code of 1825 ; but our Code differs from their doctrine by the introduction of Articles 2752 and 2759, which add some new features to the rente fonciere.
Ferriere, speaking of the bail d rente, says : “ c.’est un contrat par lequel le pro-priétaire d’une maison ou d’un heritage se démet et se dessaisit entierement a per-pétuité de toute sa propriété, et la transfers en la personne du preneur, pour en jouir, eomme il fesait, moyennant une certaine pension payable par chaqué année, soit on argent, ou en grain, ou autres espfeces.”
“ Cette rente est appellée fondero, parce qu’elle est düe pour raison du fonds, et en tient lieu au bailleur; k la difference de la rente constituée, qui est simplement constituée á prix d’argcnt.”
“ Cette rente de bail d’héritage est plus réelle que personnelle, parceque c’est une charge qui est imposée sur la chose; ensorte qu’elle suit le possesseur, ce qui fait que la chose ne peut étre transferee qu’á la charge de cette rente. De ce méme principe il s’en suit que le preneur n’est tenu de payer cette rente que taut qu’il est détenteur de l’héritage.”
The principal changes introduced by our Code are, first, that the rent charge which by the old French law was perpetual, is now essentially redeemable, Art. 2759 ; and 2dly, that a contract made bearing the name of a sale may be now, nevertheless, a contract of rent. “ O’est un contrat fait sous le nom de vonte, dans lequel un prix est mentionné, mats Von n'exige point le paiement de ce prix ; au contraire, on en fait un capital portant intérét a perpétuité. O’est done un bail a rente d’aprés le Code, et non pas un contrat de rente constituée. La cour doit faire attention que notre Code est plus clair et plus explicite que les ancien-nes coutumes fran9aises, commentées par Pothier et Ferrífera L’article 2752 est positif.”
Yooeiiies, J.
In our former opinion given in this case, we held that the contract under consideration was au annuity, whilst the minority of the court treated it as a rent of land, — rente fonciére ou bail a rente.
This was a sale of real estate made for the sum of ¡j?5500, payable one year after date, it being stipulated that the vendee had the right, at his option, to postpone the payment of this sum indefinitely, upon accounting for the interest at the rate of seven per cent, yearly in advance.
There was no delivery of a sum of money by the creditor to the debtor; nor any stipulation not to reclaim it, so long as the receiver paid the rent, consequently the contract in question is not one of annuity. O. C. 2764. Even had anote been delivered by the vendee to the vendor, the result would not have been different in this respect. But, at all events, no note was produced; and, in fact, none was ever given.
Under the Articles 2750, 2751, 2752 and 2759 of the Civil Code, the contract was one of rent, — rente fonciére. There was an immovable property conveyed; and it was stipulated that the trasferree should hold as owner; that a certain quantity of fruits should be paid annually, and that the conveyance was made in perpetuity. It is true that it was agreed that the price should be paid in one year, but at the same time the parties agreed that the vendee had the right to decline forever paying this amount, on condition of paying interest in advance, thereby establishing a capital bearing interest forever.
The Code says : “ A contract of sale, in which it is stipulated that the price shall be paid at a future time, but that it bears interest from the day of sale, is not a contract of rent. On the contrary, a contract made, bearing the name of a sale, in which the seller does not stipulate the payment of the price, but a capital bearing interest forever, is a contract of rent.” 0. 0. 2752.
The stipulation to pay the principal, in case the interest remained unpaid, is merely a mode adopted by the parties to redeem the rent charge; for, says the Code: “ The rent charge, although stipulated to be perpetual, is essentially redeemable ; but the seller may determine the terms of the redemption, and stipulate that it shall not take place until after a certain time, which can never exceed thirty years.” C. C. 2759.
The objection raised, under the provisions of Articles 2762 and 2763 of the *548Civil Code, that in the case at bar, the rent charge would not be susceptible of mortgage, or liable to seizure and sale, because the interest was required to be paid in advance, involves a confusion of ideas and a petition of principle. It is the rent charge, which is an immovable, that is susceptible of mortgage, and not the revenues accruing annually. C. C. 2763. In the second place, although it be true that the rontor cannot have the property seized and sold, unless there be due at least one entire year’s rent, it does not follow that he is bound to wait for the expiration of the year to do so, if the yearly rent falls due in advance. It is no answer to say that the plaintiff could not seize the property in question for the payment of the yearly rent, because the owner of the land might put an end to the contract of rent, — rente fonciére, by paying the capital. The right of redemption is not incompatible with the existence of the rent charge ; on the contrary, the Code says this contract, “ although stipulated to be perpetual, is essentially redeemable.” C. C. 2759. 8 L. 286, Clark’s heirs v. Christ’s Church.
It is suggested that there is, on the part of the vendee, no legal obligation to pay interest to the vendor, because its payment being left at the will of the obligor, the condition is potestative, and therefore null and void under Art. 2029 C. 0.
The plaintiff in his petition, however, does not take this view of the case; he prays that the stipulated interest be allowed by the court. In this respect, he has given a correct interpretation to the contract; it is proper to state that it was not the payment of interest, that was left at the will or option of the vendee, but the indefinite postponement of the payment of the capital on condition of paying in advance the yearly interest. The contract states express that it is agreed between the parties : “ que l’acquéreur aura le droit, de prolonger, indé-íiniment et a sa volonté, lui, ses liéritiers ou ayans-cause, le remboursement de la dite somme de $5500, en payant au vendeur, ou á ses héritiers, ou ayans-cause, annuellement, les intéréts de la dite somme sur le pied de sept pour cent payable d’avance.” In the absence of any stipulation to pay interest, the property being productive of fruits, the vendor would be entitled to legal interest; but the parties have stipulated a rate of interest, and such is their own interpretation of it in the pleadings.
It is out of the question to hold the contract to be an annuity, and at the same time raise the objection to its being a rente fonciére, that there is no legal obligation to pay the interest. If the objection be well founded, it is fatal as much to the one as to the other. The truth is that there is but one alternative; it is either a rent charge or an ordinary contract of sale. In either hypothesis, the doctrine held by this court, in its former opinion, is evidently erroneous.
After a thorough investigation of this case, we have come to the conclusion to reverse our former opinion, in order to adopt the views developed in the dissenting opinion of Mr. Justice Cole.
It is, therefore, ordered and decreed, that our former judgment be avoided and annulled, and that the judgment of the District Court be affirmed, with costs.