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

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. 1996–97. 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., June–July 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. 518–25.

7. Id. art. 487.

8. Id. arts. 3475, 3480–82. 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. 3489–91. 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, 159–61 (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.