DeMary v. Fontenot
161 So.2d 82, 1964 La. App. LEXIS 1344 (1964)
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Rule of Law:
A contractual obligation to pay is not void as a purely potestative condition if the condition, while dependent on the obligor's will, imposes a detriment, disadvantage, or limitation on the obligor's legal freedom to use the subject property.
Facts:
- On August 21, 1959, F. J. DeMary entered into an agreement in Orange, Texas, to sell six race horses to the defendant.
- The total purchase price was established as $9,200.
- The agreement stipulated that the purchase price would be paid from specific future events.
- Payment would be made from the entire proceeds if a horse was sold outright or claimed in a claiming race.
- Additionally, 40% of the net purse from any race track earnings would be paid to DeMary.
- These payments were to continue until the full $9,200 purchase price was satisfied.
- The defendant took possession of the horses but made no payments to DeMary.
- DeMary made an amicable demand for payment, which the defendant did not honor.
Procedural Posture:
- F. J. DeMary (plaintiff) filed suit against the defendant in the district court for St. Landry Parish, Louisiana, to enforce the sale agreement.
- The defendant filed an exception, arguing the contract was unenforceable on grounds of containing a suspensive condition, a potestative condition, and violating public policy.
- The district court (trial court) sustained the defendant's exception and dismissed the plaintiff's suit.
- DeMary (appellant) appealed the district court's ruling to the Louisiana Court of Appeal, Third Circuit.
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Issue:
Does a contract for the sale of race horses, where payment is contingent on the buyer selling the horses, having them claimed in a race, or using their race earnings, create a purely potestative condition on the part of the buyer that renders the obligation to pay void?
Opinions:
Majority - Frugé, J.
No. The contractual obligation to pay is not void because the condition for payment is not purely potestative. The Louisiana Civil Code voids only those conditions that are subject solely to the 'whim or pleasure of the promisor' and involve no detriment to them. Here, the defendant's legal freedom to use the horses was limited; if he sold them or raced them for winnings, he was obligated to pay the plaintiff from the proceeds. This limitation constitutes a sufficient detriment or inconvenience to prevent the condition from being purely potestative, thus making the obligation enforceable.
Dissenting - Culpepper, J.
The dissent agrees that the condition is not purely potestative but argues the plaintiff's case should be dismissed for a different reason. The payment terms constitute a suspensive condition, meaning the obligation to pay is not due until one of the specified events (a sale, claim, or race winning) occurs. Because the plaintiff’s petition failed to allege that any of these suspensive conditions had been fulfilled, he has not yet stated a valid cause of action for payment. The case should be remanded to allow the plaintiff to amend his petition to allege that such an event has taken place.
Analysis:
This case clarifies the distinction between a void 'purely potestative condition' and an enforceable 'simple potestative condition' under Louisiana contract law. The court's decision narrows the scope of what is considered a purely potestative condition, establishing that any meaningful limitation on the obligor's legal freedom or use of property is sufficient to make the obligation enforceable. This precedent makes it more difficult for a party to evade a contract where payment is tied to the revenue generated by an asset they control, reinforcing the idea that an implied duty of good faith performance exists.
