Louisiana Civil Code

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CHAPTER 4 - TRANSFER OF OBLIGATIONS

 

SECTION 1 - ASSUMPTION OF OBLIGATIONS

Art. 1821. An obligor and a third person may agree to an assumption by the latter of an obligation of the former. To be enforceable by the obligee against the third person, the agreement must be made in writing.

The obligee's consent to the agreement does not effect a release of the obligor.

The unreleased obligor remains solidarily bound with the third person. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1822. A person who, by agreement with the obligor, assumes the obligation of the latter is bound only to the extent of his assumption.

The assuming obligor may raise any defense based on the contract by which the assumption was made. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1823. An obligee and a third person may agree on an assumption by the latter of an obligation owed by another to the former. That agreement must be made in writing. That agreement does not effect a release of the original obligor. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1824. A person who, by agreement with the obligee, has assumed another's obligation may not raise against the obligee any defense based on the relationship between the assuming obligor and the original obligor.

The assuming obligor may raise any defense based on the relationship between the original obligor and obligee. He may not invoke compensation based on an obligation owed by the obligee to the original obligor. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

SECTION 2 - SUBROGATION

Art. 1825. Subrogation is the substitution of one person to the rights of another. It may be conventional or legal. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1826. A. When subrogation results from a person's performance of the obligation of another, that obligation subsists in favor of the person who performed it who may avail himself of the action and security of the original obligee against the obligor, but is extinguished for the original obligee.

B. An original obligee who has been paid only in part may exercise his right for the balance of the debt in preference to the new obligee. This right shall not be waived or altered if the original obligation arose from injuries sustained or loss occasioned by the original obligee as a result of the negligence or intentional conduct of the original obligor. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985; Acts 2001, No. 305, 1]

Art. 1827. An obligee who receives performance from a third person may subrogate that person to the rights of the obligee, even without the obligor's consent. That subrogation is subject to the rules governing the assignment of rights. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1828. An obligor who pays a debt with money or other fungible things borrowed for that purpose may subrogate the lender to the rights of the obligee, even without the obligee's consent.

The agreement for subrogation must be made in writing expressing that the purpose of the loan is to pay the debt. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

Art. 1829. Subrogation takes place by operation of law:

(1) In favor of an obligee who pays another obligee whose right is preferred to his because of a privilege, pledge, mortgage, or security interest;

(2) In favor of a purchaser of movable or immovable property who uses the purchase money to pay creditors holding any privilege, pledge, mortgage, or security interest on the property;

(3) In favor of an obligor who pays a debt he owes with others or for others and who has recourse against those others as a result of the payment;

(4) In favor of a successor who pays estate debts with his own funds; and

(5) In the other cases provided by law. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985; Acts 1989, No. 137, §16, eff. Sept. 1, 1989; Acts 2001, No. 572, 1]

Art. 1830. When subrogation takes place by operation of law, the new obligee may recover from the obligor only to the extent of the performance rendered to the original obligee. The new obligee may not recover more by invoking conventional subrogation. [Acts 1984, No. 331, §1, eff. Jan. 1, 1985]

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