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Saizan v. Century 21 Gold Key Realty, Inc. - 447 So. 2d 41 (La. Ct. App. 1984)

Rule:

Contracts of exchange are subject to rescission on account of lesion except in two cases: (1) when one party gives immovable property to the other in exchange for movable property, and (2) if a balance has been paid in money or immovable [in movable] property, and if the balance paid exceeds by more than one-half the total value of the immovable property given in exchange by the person to whom the balance has been paid. La. Civ. Code Ann. arts. 26642665, and 2666, respectively.

Facts:

Plaintiff seller entered into an agreement to sell certain property to Century 21 Gold Key Realty, Inc. This agreement stated that Century 21 agreed to pay $120,000.00 for the subject property upon the following terms: "$90,000.00 Cash at act of sale thru - property exchanges with the balance ($30,000.00) to be financed for 12-Months @ ten (10%) interest." The agreement also stated: 

"that this exchange was being made mutually by the parties and that the properties exchanged were of equal value." Several months later, the seller brought an action to rescind the contract, alleging lesion beyond moiety. The buyer filed a Peremptory Exception of No Right of Action under L.S.A.-C.C. art. 2666, which exception was maintained by the trial court.

Issue:

Was the seller barred by art. 2666 from rescinding the contract?

Answer:

Yes

Conclusion:

The court affirmed the trial court judgment. The court found that La. Civ. Code Ann. art. 2665 was not applicable because the exchange was not immovable property for movable property. The instant exchange was immovable property for immovable property and movable property. Thus, La. Civ. Code Ann. art. 2666 was controlling. As such, the court pretermitted a factual finding of whether the balance paid exceeded by more than one-half the total value of the immovable property given in exchange by the person to whom the balance was paid because, under art. 2666, it was only the person who had paid such balance who could demand rescission of the contract on account of lesion, and the seller was not that person.

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