Law School Case Brief
Losecco v. Gregory - 32 So. 985 (La. 1901)
Under La. Civ. Code Ann. art. 1898, where the consideration or cause of the contract really exists at the time of making it, but afterwards fails, it will not affect the contract if all that was intended by the parties be carried into effect at the time.
The contract provided that, for each of the next two years, the grower would sell to the buyer all oranges that the grower's trees might produce. The buyer paid the $4,000 down payment stipulated in the contract. However, an unusually extreme winter-freeze destroyed all the trees. Because of the utter destruction of the orchard and no possibility of the production of any crop thereon in the contract years, buyer demanded the return of the $4,000 he had paid. This was refused by the grower; hence, the buyer instituted the present action. The District Court ruled in favor of the buyer and ordered the return of the $4,000 down payment. On appeal, the grower alleged that the agreement between the parties evidenced an aleatory contract whereupon the buyer purchased an uncertain hope, an expectancy, a chance – classifying ungrown crops as such – and must take the consequences of his bargain. The grower contended that all risks were included by the nature of an aleatory contract, and the buyer expressly assumed all risks.
Was the agreement between the parties an aleatory contract, thereby precluding recovery on the part of the buyer?
The Court held that the agreement between the parties was not aleatory, because performance of the contract did not depend on an uncertain event within the meaning of La. Civ. Code Ann. art. 1776. Instead, it was "certain" as used in art. 1776, because in the usual course of events it had to happen. The Court held that the language "purchaser assumes all risks" meant all usual, known, or foreseen risks that might attend the orange crop, e.g., whether it was bountiful or meager or of good quality or bad. The buyer took the risk only on the appearance on the trees, and growth, development, and maturity of the oranges, not the risk that the orchard would continue to exist. The orange grove having been destroyed by a fortuitous event, the buyer had the right to recede from the contract. The Court concluded that the grower was bound to make restitution of that portion of the price received.
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