White v. Crook
426 So.2d 334 (1983)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
Under Louisiana Civil Code art. 2563, a buyer of immovable property may cure a late payment any time before a judicial demand is filed, even if the contract contains a clause providing for automatic dissolution or forfeiture of the sale for failure to pay within a specified term.
Facts:
- Warren and June White sold a one-half interest in Colorado land to Louie and Earnestine Crook on October 3, 1978.
- The contract, executed in Louisiana, stipulated that it was to be governed by Louisiana law.
- The contract required the Crooks to pay half of a monthly installment on the property's note by the first of each month.
- A clause in the contract stated that if a party was more than five days late on a payment, the defaulting party would 'automatically' forfeit all rights, title, and interest in the property.
- For the October 1981 payment, the Crooks failed to pay within the five-day grace period, which ended on October 6th.
- The Crooks made their payment for the October installment on October 8, 1981.
Procedural Posture:
- Warren and June White filed suit against Louie and Earnestine Crook in a Louisiana district court, seeking to enforce the contract's forfeiture clause.
- The Crooks filed a motion for summary judgment, arguing their payment was timely under state law.
- The district court judge granted the Crooks' motion for summary judgment and dismissed the Whites' action.
- The Whites, as plaintiffs-appellants, appealed the district court's judgment to the Court of Appeal of Louisiana, Second Circuit.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does Louisiana Civil Code art. 2563 allow a buyer of immovable property to cure a late payment after the contract's grace period has expired but before the seller files a lawsuit, thereby preventing the enforcement of a contractual clause that calls for automatic forfeiture upon late payment?
Opinions:
Majority - Jasper E. Jones
Yes. Louisiana Civil Code art. 2563 allows a buyer to cure a late payment before a judicial demand is made, superseding a contract's automatic forfeiture clause. The court reasoned that laws existing at the time of a contract's creation are incorporated into and form a part of the contract as though expressly written therein. LSA-C.C. art. 2563 is one such law, and it provides that a buyer of immovable property may make a payment after the expiration of the contractual term, so long as a judicial demand has not been made. The court found that the term 'automatically' in the contract is synonymous with the term 'of right' used in the statute. Because the Crooks paid the overdue installment on October 8, before the Whites filed their lawsuit on October 29, the payment was timely under the statute. Therefore, the Crooks sufficiently performed their primary obligation, and the Whites are not entitled to the dissolution of the sale or the enforcement of the penal forfeiture clause.
Analysis:
This decision reaffirms the strong public policy embedded in Louisiana Civil Code art. 2563, which protects buyers of immovable property from immediate and harsh forfeitures. It clarifies that private contractual agreements, even those using absolute language like 'automatically,' cannot override this statutory grace period that extends until a lawsuit is filed. This ruling reinforces the principle that certain mandatory legal provisions are implied in all relevant contracts, limiting the parties' freedom to contract around them. The case serves as a critical reminder to sellers that they must act swiftly by filing a judicial demand to effectively cut off a buyer's right to cure a default.
Unlock the full brief for White v. Crook