Good Faith in Louisiana Property Law

Author:John A. Lovett
Position:De Van D. Daggett, Jr. Distinguished Professor, Loyola University New Orleans College of Law.
Pages:1163-1221
 
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Good Faith in Louisiana Property Law
Dedicated to A.N. Yiannopoulos
John A. Lovett**
TABLE OF CONTENTS
Introduction ................................................................................ 1163
I. Encroaching Buildings: Article 670 ........................................... 1172
II. Good Faith Purchaser Doctrine .................................................. 1179
A. Lost or Stolen Things ........................................................... 1182
B. Annullable Title ................................................................... 1187
C. The Double Sale .................................................................. 1189
D. The Faithless Pledgee, Lessee, or Depositary ...................... 1193
III. Accession ................................................................................... 1200
IV. Acquisitive Prescription with Respect to Immovables ............... 1210
Conclusion: Property Law Without Good Faith ......................... 1218
INTRODUCTION
The concept of good faith is a cornerstone of Louisiana private law. It
plays a central role in the law of general and conventional obligations.1 It
Copyright 2018, by JOHN A. LOVETT.
The author dedicates this Article to Professor A.N. Yiannopoulos. His
teaching, leadership, and scholarship inspired the author and so many ot hers to
learn about Louisiana’s Civil Law traditio n, be advocates for that tradition, and
work to improve the law. Professor Yian nopoulos made an indelible mark on
Louisianna’s legal system and on the lives of countless Louisiana law students,
Louisiana lawyers, and jurists across the world. His legacy will endure for
generations to come.
** De Van D. Daggett, Jr. Distinguished Professor, Loyola University New
Orleans College of Law. The author gratefully acknowledges the he lpful
comments he received on earlier drafts of this Article from Melissa Lonegrass,
Ronald J. Scalise, Jr., the participants in the Property Works in Progress
Workshop at Northeastern University Law School, and the Louisiana Legal
Scholarship Workshop at Loyola University New Orleans College of Law.
1164 LOUISIANA LAW REVIEW [Vol. 78
makes crucial appearances in the law of sales.2 It even affects subjects in
the law of persons, such as the civil effects of absolutely null and putative
marriages.3
But good faith is also a pivotal concept in Louisiana property law.
Although it has always been a feature of that law, during an intense burst
of law reform activity stretching from 1977 to 1982, the Louisiana
Legislature (“Legislature”) updated and extended the concept of good faith
in several core areas of property law.4
1. In the context of general and conventional obligations, all obligors and
obligees must conduct themselves in accordance with the general duty of good faith.
LA. CIV. CODE ANN. arts. 1759, 1770, 1983 (2018). An obligor in good faith who
breaches a conventional obligation is liable o nly for foreseeable damages, but an
obligor in bad faith can be liable for unforeseeable damages as long as those
damages directly resulted from his failure to perform. Id. arts. 199697. Other
provisions that employ good faith in the law of obligations include Louisiana Civil
Code article 1975 (“[O]utput or requirements must be measured in good faith.”);
article 2021 (“Dissolution of a contract does not impair the rights acquired through
an onerous contract by a third party in good faith.”); article 2028 (“Counterletters
can have no effects against third persons in good faith.”); and article 2035 (“Nullity
of a contract does not impair the rights acquired through an onerous contract by a
third party in good faith.”). For a detailed meditation on the role of good faith in the
law of obligations, see Saul Litvinoff, Good Faith, 71 TUL. L. REV. 1645 (1997).
2. Although the Louisiana Civil Code provisions in the chapter on sales do
not specifically use the term “good faith” in the text of the articles, revision
comments repeatedly distinguish between good faith and bad faith sellers. See, e.g.,
LA. CIV. CODE ANN. art. 2534 cmt. a (noting that the article “changes the law . . . by
extending the prescriptive period for actions in redhibition against a seller in good
faith from one to four years . . . .”) (emphasis added); id. art. 2545 cmt. b (describing
a manufacturer as being “deemed to be in bad faith” regardless of his actual
knowledge of the thing sold); art. 2545 cmt. f (noting that a buyer is not required to
give “a bad faith seller or a manufacturer” an opportunity to repair before instituting
an action in redhibition); art. 2545 cmt. g (referring to a potential credit a “bad faith
seller” can claim for use of thing in an action of redhibition).
3. Id. art. 96.
4. T hrough his leadership role with the Louisiana State La w Institute in the
revision of the Louisiana Civil Code and as the most widely cited and influential
commentator on Louisiana law, Professor A.N. Yiannopoulos significant ly
influenced the development of good faith in Louisiana property law. See generally
Justice Harry T. Lemmon, A Tribute to Athanasios N. Yiannopoulos, 73 TUL. L.
REV. 1025 (1997); Tyler G. Storms, Interview with Professor A.N. Yia nnopoulos:
Louisiana’s Most Influential J urist in Our Time, 64 LA. BAR. J., JuneJuly 2016,
at 24, 27 n.6 (listing the numerous Law Institute Committees for which Professor
Yiannopoulos served as reporter). It is fitting, then, that this Article contributes to
the current issue of the Louisiana Law Review published in his honor.
2018] GOOD FAITH IN LOUISIANA PROPERTY LAW 1165
This Article addresses the role of good faith in four of those distinct
areas: (1) as a prerequisite to the establishment of a predial servitude
benefiting the owner of a building that encroaches on the property of a
neighbor;5 (2) as a mediating device allocating the rights of an original
owner of a corporeal movable and a subsequent acquirer under the bona fide
purchaser doctrine;6 (3) as a defining characteristic establishing rights and
obligations under the law of accession when a person possesses immovable
property without a valid title;7 and (4) as a prerequisite for the acquisition of
ownership of, or other real rights in, immovable property by ten-year
acquisitive prescription.8 Although this Article notes the sources of good
faith in Louisiana jurisprudence, prior Louisiana civil codes, and European
civil codes considered in the revision process, it focuses primarily on how
good faith has functioned in the post-revision property law landscape. It
does so by examining the text and structure of the good faith provisions in
the continuous revised Civil Code and reported judicial decisions that have
employed the new or reformulated definitions of good faith.
Within the parameters of property law that are the focus of this Article,9
an owner of a corporeal thing experiences a loss of property rights in some
form or another. In the case of encroaching buildings, the servient estate
owner may be forced to relinquish a predial servitude over his immovable
property if the encroaching building owner is in good faith.10 In the case of
a lost or stolen corporeal movable, the owner must compensate a subsequent
acquirer before the owner can recover possession if the acquirer purchased
5. LA. CIV. CODE ANN. art. 6 70.
6. Id. arts. 51825.
7. Id. art. 487.
8. Id. arts. 3475, 348082. The Louisiana Civil Code also provides that a
possessor can acquire ownership of or other real rights in a movable through
acquisitive prescription after three years of possession with good faith and an act
sufficient to transfer ownership, but she must possess for ten years in the absence of
good faith or title to acquire ownership by prescription. Id. arts. 348991. Cases
applying these articles are discussed briefly infra note 276 and accompanying text.
9. Good faith also plays a quiet but significant ro le in the shadows of
Louisiana’s public records doctrine. See, e.g., Longleaf Invs., L.L.C. v. Tolintino,
108 So. 3d 157, 15961 (La. App. Cir. 2012) (holding that a party who would
otherwise be a third party purchaser under Article 3338 of the Civil Code cannot
rely on the public records doctrine when there are indications of bad faith and
fraud). Con sideration of good faith in the public records doctrine, however, is
beyond the scope of this Article. For more on this topic, see generally Michael
Palestina, Comment, Of Registry: Louisiana’s Revised Public Records Doctrine,
53 LOY. L. REV. 899 (2007).
10. Art. 670.

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