C. Usufruct 1. Usufruct: Real right of limited duration on the property of another.

Features vary with the nature of the things subject to it as consumables or nonconsumable a. Right to use the property and enjoy its fruits b. Usufruct may be established by juridical act (conventional) either inter vivos (contract) or mortis causa (will) or operation of the law (legal)(544) i. Examples of legal usufructs include usufruct conferred to a surviving spouse (890) or in favor of parents over the property of minor children (223) c. Usufruct may be established in favor of a natural person or legal entity d. Usufruct may be established for a term or under a condition, and subject to any modification consistent with the nature of the usufruct. e. Usufruct is an incorporeal thing. It is moveable or immovable according to the nature of the thing upon which the right exists f. Usufruct is susceptible to division, b/c its purpose is the enjoyment of advantages that are themselves divisible. It may be conferred on several persons in divided or undivided shares, and it may be partitioned among the usufructuaries (541). (The termination of one usufructuary's interest results in the accrual of that interest in favor of the remaining usufructuaries) h. The naked ownership may be partitioned subject to the rights of the usufructuary(542) i. When property is held in indivision, a person having a share in full ownership may demand partition of the property in kind or by licitation, even though there may be other shares in naked ownership and usufruct (Ex: Dad dies, no will, wife is owner and usufruct while child is naked owner. So mom as a owner or co-owner may demand partition of the property in kind or by licitation) (543) However a person having a share in naked ownership only or in usufruct only does not have this right, unless a naked owner and a usufructuary jointly demand partition. Their combined shares shall be deemed full ownership (543). j. Usufruct may be established, through juridical act, in favor of successive usufructuaries (546) k. When the usufruct is established in favor of several usufructuaries, the termination of the interest of one usufructuary inures to the benefit of those remaining, unless the grantor has expressly provided otherwise (547) l. The features of the right hinge on whether the usufruct is over a consumable thing or over a nonconsumable thing. 2. Usufruct over consumable things (536, 538)

a. Consumable things are those that cannot be used w/o being expended or consumed, or w/o their substance being changed, such as money, harvested agricultural products, stocks of merchandise, foodstuffs and beverages. b. The usufructuary becomes the owner of the consumable. Usufructuary may consume, alienate, encumber the consumable as he sees fit c. However at the termination of the usufruct (i) He must either pay the naked owner the value the consumed items were at commencement or (ii) replace them with like things of the same quality and quantity. 3. Usufruct over non-consumable things (537 & 539) a. Non-consumables are things that can be used w/o their substance being altered even though natural deterioration may gradually occur. They are not destroyed with the very first use ie. Shares of stock, land, house, animals, furniture, appliances. (537) b. The usufructuary has the right to use and enjoy the property but cannot alienate (no abusus) it without the naked owners agreement. Usufructuary has the duty to make use of the property as a prudent administrator and deliver them to the naked owner at the termination of the usufruct (539) c. The usufructuary of non-consumables has the right to possess them and to derive the utility, profits (fruits) and advantage that they may produce, under the obligation of preserving their substance. (539) d. Usufructuary may lease, alienate or encumber his right (usus & fructus not abusus). All such contracts cease at the end of the usufruct. He is responsible for the abuse that the person w/whom he has contracted makes of the property i. If lessee did not know usufructuary was not owner lessee still ends buy the naked owner may have to indemnify e. If the usufructuary is not sure whether it is a consumable or non-consumable item he should preserve the original intent of the usufruct (ie stock as an investment or liquid asset or a CD investment? Nonconsumable or liquid? Consumable) 4. Rights of the usufructuary over non-consumables a. Right to all fruits: fruits are things that are produced by or derived from another thing w/o diminution of its substance. i. Rights to fruits begin on the effective date of the usufruct (when dad dies) ii. You generally have to take some action to create a fruit. b. Kinds of fruits:

i. Natural fruits are products of the earth or animals (1) Usufructuary acquires the ownership of natural fruits severed during the existence of the usufruct. (Annual rental = $12,000 payable Dec 31 in corn. Commencement of usufruct is April 1. Usufruct gets all the corn) (2) Natural fruits not severed at the end of the usufruct belong to the naked owner. Puppies not born at the end of the usufructuary belong to the naked owner. ii. Civil fruits are revenues derived from a thing by operation of the law or by reason of a juridical act: rentals, interest, and certain corporate distributions. iii. The usufructuary acquires the ownership of civil fruits accruing during the existence of the usufruct. Civil fruits accrue day by day. (1) Civil fruits are calculated day by day (Annual rental = $12,000 payable in cash @ last calender day of the year. Commencement of usufruct is April 1. Usufructuary gets $9,000. The $3,000 goes back into the estate) c. Usufructuary does not have rights to products (488) - product is derived from a thing which results in dimunation of the thing i. So, production of oil & gas does not produce fruits. B/C a person can't make an act to create oil & gas. Person can make an act to create cotton. Most fruits are not spontaneously generated. Usually takes act of a man. The renewability is the issue. Man can't do something to regenerate or produce more oil. ii. The right of usufructuary and the naked owner in mines & oil is goverend by the mineral code (1) Spousel have all the rights to mines that have and have not been worked. However if the spouse wants to create a new Mineral lease on the land he/she must get the naked owners permission when she does she has all rights to that lease (2) Open Mines Doctrine: If the creator of the usufruct has already worked a mine the usufructuary is entitled to use and enjoy the rights in those minerals. iii. In general trees are also considered products and thus the usufructuary has no right to cut them down there are exceptions to this rule (1) The usufructuary may cut trees growing on the land of which he has the usufruct and take stones, sand and other materials from it, but only for his use or for the improvement or cultivation of the land (560) (2) When the usufruct includes timberlands, the usufructuary is bound to manage them as a prudent administrator. The proceeds of the timber operations that are derived from proper management of timberlands belong to the usufructuary (562)

(a) However if the land historically was not used for timberlands and the trees are mature. A prudent administrator my obtain expert opinion that the land would be best suited as a tree farm. The revenues from the first cut of the trees goes to the estate b/c those are product proceeds however a portion of those proceeds can go back into the investment of creating a tree farm. Thereafter the proceeds belong to the usufructuary. (Kennedy Case - only can clear cut if this is prudent, trees were mature so it was prudent) d. Usufructuary rights to improvements and alterations The usufructuary may make improvements and alterations on the property subject to the usufruct at his cost and with the written consent of the naked owner. If the naked owner fails or refuses to gibe his consent, the usufructuary may, after notice to the naked owner and with approval of court, make at his cost those improvements and alterations that a prudent administrator would make.(558) i. If usufructuary makes changes without consent he is subjecting himself to liability. Naked owner can make you liable for not acting as a prudent administrator. ii. Standard of care: The usufructuary is answerable for losses resulting from his fraud, default, or neglect (576) (a) Thus the usufructuary is liable even for slight fault, namely, he must exercise the diligence that an attentive and careful man exercises in the management of his own affairs. (b) Usufructuary is answerable for losses. If the value of the property is less with a pool the usufructuary put in. (c) Usufructuary does not have to possess for himself however he is answerable for damages caused by third persons. iii. The usufructuary may remove all improvements he has made, subject to the obligation of restoring the property to its former condition. He may not claim compensation from the owner for improvements that he does not remove or that cannot be removed (601) (a) The usufructuary may set off damages due to the owner for the destruction or deterioration of the property subject to the usufruct the value of improvements that cannot be removed (602) iv. Usufructuary is not liable for changes he made with out consent, as long as the property is in the same condition it was at commencement. v. Usufructuary is not liable for the properties depreciation if he was a prudent manager. The naked owner has to take on the loss at termination e. Usufructuaries responsibility to ordinary repairs and maintenance.

i. Usufructuary is responsible for ordinary maintenance and repairs for keeping the property in good order, whether the need for these repairs arises from accident, from the normal use of the things, or from his fault or neglect (577) (ex. Awning permitted to decay or woodshed torn down) ii. The naked owner is responsible for extraordinary repairs, unless they have become necessary as a result of the usufructuary's fault or neglect in which case the usufructuary is bound to make them at his cost (577) (a) extraordinary repairs are those for the reconstruction of the whole or of a substantial part of the property subject to the usufruct. All others are ordinary repairs. (578) (ex: repairs to principal walls, vaults, beams, repairs to the roof, to a levee, repairs to dikes, supporting walls, walls of enclosure) (b) Usufructuary did not change oil on the car - ended up needing a new engine. Normally this would be an extraordinary repair, however, they became necessary b/c of usufructuary's fault - usufructuary responsible. iii. During the existence of the usufruct, the naked owner may compel the usufructuary to make repairs for which the usufructuary is responsible. (579) The ususfructuary may not compel the naked owner to make the extraordinary repairs for which the owner is responsible. If the naked owner refuses to make them, the usufructuary may do so, and he shall be reimbursed w/o interest by the naked owner @ the end of the usufruct. (579) iv. The usufructuary is answerable for all expenses that became necessary for the preservation and use of the property after the commencement of the usufruct. (581) v. If usufruct commences and befor the usufructuary goes into possession the naked owner incurs necessary expenses that the usufructuary is responsible for he may retain possession until usufructuary pays him (580) vi. Usufructuary may reject the gift in a succession if it costs too much to fix it or repair it; nee court order (582) vii. Neither the usufructuary nor the naked owner is bound to restore the property that has been totally destroyed through the accident or b/c of age. (583) If the naked owner elects to restore the property to make extraordinary repairs he must do so in reasonable time least inconvenient to usufruct viii. Usufructuary is bound to pay the annual charges imposed during his enjoyment of the property subject to the usufruct, such as property taxes. (584) ix. The usufructuary is bound to pay the extraordinary charges that may be imposed during the existence of the usufruct. If these charges are of a nature to increase the value of the property subject to usufruct the naked owner shall reimburse the usufructuary at the end of the usufruct only for capital expended. (585) ie paving assessments

f. Usufructuary's right to disposal of nonconsumable - exception (568) i. Usufructuary does not have the right to dispose of nonconsumable things unless the right has been expressly granted to him. (a). Nevertheless he may dispose of corporeal movables that are gradually and substantially impaired by use, wear, or decay, such as equipment, appliances, and vehicles, provided that he acts as a prudent administrator. (b) Upon disposition the usufruct is converted into a usufruct of money, and the usufructuary is bound to pay to the naked owner at the end of the usufruct the value that the things had at the time of disposition. (Taxes are paid by the proceeds of the sale ii. If the usufructuary has not disposed of corporeal movables that are by their nature impaired by use, wear, decay, he is bound to restore them to the owner in the state in which they may be at the end of the usufruct (a) The usufructuary is relieved of this obligation if the things are entirely worn out by normal use, wear or decay. (569) g. When can a non-consumable be converted? i (568) voluntary sale - corporeal immovable ii (614) involuntary sale - when any loss, extinction or destruction of property subject to usufruct is attributable to the fault of a third person, the usufruct does not terminate but attaches to any claim for damages and the proceeds therefrom iii. (615) - Change of form of property(expropriation) - When property subject to usufruct is converted into money or other property w/o an act of the usufructuary, as in a case of expropriation (gov't buys land, corporation liquidates) the usufruct does not terminate but attaches to the money iv. (616) Sale by agreement - When property is sold b/c of partition or by agreement of owner & usufruct the usufruct attaches to the proceeds of the sale v. (617) Proceeds of insurance - When proceeds of insurance are due on account of loss, extinction or destruction, the usufruct attaches to the proceeds. If the usufructuary or naked owner is insured separately for their interest only, the proceeds belong to the insured party vi. (618) In cases governed by 614, 615, 616, and 617, the naked owner may demand w/in one year from the receipt of the proceeds by the usufructuary, that the money be safely invested subject to the right of the ususfructuary (a) Security may be dispensed w/by the grantor of the usufruct or by operation of the law. Legal usufructuaries and sellers or donors of property under reservation of usufruct are not required to give security (573)

(1) Surviving spouses are not required to give security g. Stock is a non-consumable and therefore can not be sold. i. The usufructuary is responsible to the naked owner for the value of the stock at termination. (Commencement AT & T $10 /share @ 100 shares = $1000. Usufructuary sold AT & T for Reabock termination is worth $20/share @ 100 shares = $2000. Usufructuary is responsible for the value of AT & T stock at termination. If AT &T is worth $30/share usufructuary owes naked owner that amount. However if AT &T is worth $5/share. Ususfructuary should pay the profits he reaped from selling the stock b/c he should not benefit from his wrong - doing. 5. Termination of usufruct. a. The usufruct of nonconsumables terminates by the permanent and total loss, extinction, or destruction through accident or decay of the property subject to the usufruct (613) b. The right of the usufruct expires upon the death of the usufructuary (607) c. A usufruct established in favor of a legal entity other than a natural person (608) i. terminates when the entity ceases to exist or ii. upon the lapse of 30 years from the date of the commencement of the usufruct d. A usufruct established for a term or subject to a condition terminates upon the expiration of the term or the happening of the condition (610) e. Usufructuary is charged to restore or transfer the usufruct to another person, his right terminates when the time for restitution or delivery arrives (610) f. Prescription of non- use: if you don't use your right for 10 years your right is extinguished. Those rights go back to the naked owner. Naked owner then gets full ownership.(621) c. A usufruct may be terminated by the naked owner if the usufructuary commits waste, alienates things w/o authority or abuses his enjoyment in any other manner. (623) d. Under 623 cases the court may decree that the property be delivered to the naked owner on the condition that he shall pay to the usufructuary a reasonable annuity until the end of the usufruct. The amount of the annuity shall be based on the value of the usufruct. i. The usufructuary may prevent termination of the usufruct or delivery of the property to the naked owner by giving security. 6. What happens to the consumable or nonconsumable at termination: a. Consumable: usufructuary has to return the value the consumable was at commencement or similar quantity or quality

inventory of a business is shoes. Value at commencement was $10/pair. At termination = $15/pair. Best to replace what the value was at commencement i. Replace inventory in similar quantity and quality or ii. Replace what they were worth at commencement iii. If value went down to $5 per share at termination a smart usufructuary would replace the shoes w/similar quantity and quality. b. Nonconsumable - usufructuary has to return the thing at termination. i. If the thing is of greater value then was worth at commencement, the naked owner gets the benefit. ii. If the value declines, naked owner takes on the loss. (a) However if the usufructuary has violated his standard of care then he has liability to the value the property would have had at termination. (b)Upon termination of a usufruct of nonconsumables for a cause other than total and permanent destruction of the property, full ownership is restored. The usufructuary or his heirs are bound to deliver the property to the owner w/its accessories and fruits produced since the termination of the usufruct. (628) (1) If the property has been lost or deteriorated through the fault of the usufructuary, the owner is entitled to the value the property otherwise would have had at the termination of the usufruct (628) Classification of Things A. Thing is the object of a property right; property is the legal relationship B. 3 different ways to divide things and having different legal effects; Each classification is done independently. Every thing is classified in each area 1. Susceptibility of ownership i. Rules of law are going to be different for things that can be owned and for things that can not be owned (a) Common things (b) Public things (government) (c) Private things 2. Susceptibility of movement

i. Immoveable (more rigid rules, formalities, & longer acquisitive prescription) ii. Moveable 3. Susceptibility of Touch i. Corporeal (touched, felt) ii. Incorporeal (legal rights) 4. Examples: House = private thing, immovable, corporeal River = public, immovable, corporeal Stock = incorporeal, movable, private C. Susceptibility of movement (462 - 475) 1. (475) default article. All things, corporeal or incorporeal that the law does not consider as immovable are movables 2. Immovables i. What are the requirements for a thing to be immovable? (a) Subject to writing requirements of Art 1839 (b) Immovable period. (c) component part (i) How does something become a component part? 463 item owned by a person who also owns the ground (building, other construction, timber, ungathered crops and fruits) - billboard 465 - don't need unity of ownership - it is something incorporated into the land or building or other construction so as to become an integral part of it ie topsoil 466 - Things permanently attached by nature (plumbing heating, cooling, other installations) or removing it would harm it or the thing it is attached to 467 Immovable by declaration (no residence though) (ii) Sale of an immovable includes component parts (462)

If you put your topsoil on my land whether or not I own the topsoil when I sell my land that topsoil in the eyes of the law are its component parts (465) ii. It is immovable. PERIOD (a) Land and their component parts (b) Buildings i. PHAC - 1). Size 2) Purpose (inhabited by people) 3.) Cost (high) 4). Permanence (not relative to attachment to the ground just relative to materials the structure is made out of) 5) also considered societal views (c) Standing Timber (d) Condo's iii. Component Part (a) At one time the thing had a separate identity; something by itself is immovable but has become connected to an immovable in the eyes of the law and has lost its separate identity (b) Tracts of land w/ their component parts are immovable (c) Unity of Ownership: Buildings, other constructions permanently attached to the ground, standing timber and unharvested crops or ungathered fruits of trees are component parts of land when they belong to the owner of the ground (463) (i) No Unity of ownership: Buildings, standing timber are separate immovables when they belong to a person other than the owner of the ground (464) THEY ARE NOT COMPONENT PARTS (ii) (469)The transfer or encumbrance of an immovable includes its component parts. Thus if X sells his tract of land and the building is a component part b/c there is unity of ownership the building will transfer w/the land. If the building is not a component part of the land but is a separate immovable the building does not transfer with the land. (iii) If it is not a component part of the land then it will not transfer with the transfer of the land (e). Things incorporated into a tract of land, a building, or other construction so as to become an integral part of it, such as building materials, are its component parts without regard to ownership. (465) (building materials, bricks, windows, nails) i. Landry - topsoil is an integral part of the land; immovable (465) (g) Component parts under 463 & 465 are distinct. The thing has to fall under one or the other not both. (h) (466) Permanent attachments: Things permanently attached ro a building or other construction, such as plumbing, heating, cooling, electrical or other installations are its component parts.

OR Things are considered permanently attached if they cannot be removed w/o substantial damage to themselves or to the immovable to which they are attatched. Equibank Chandeliers are component parts - crt took the ordinary view of society into consideration and ease of removal and installation - do you need to be an expert. (i) The owner of an immovable may declare that machinery, appliances and equipment owned by him and placed on the immovable other than his private residence for its service and improvement are deemed to be its component parts. The declaration shall be filed in the parish registry (467). 4 requirements: (1) unity of ownership (2) immovable (not the private residence) (3) actually there for service and improvement of the immovable (4) registration of the immovable (j) To be a component part: Unity of Ownership required under 463 Building, other construction, timber, crops will be a component part of the land only when there is unity of ownership. 467 declaration of immovable - register it No Unity of Ownership required: 465 permanent attachments that become integral parts of land, building, or other construction 466 Permanent attachments - certain installations in a building or those that can't be removed w/o harming it or the thing it is attached to 3. Moveables i. Other constructions, unharvested crops or ungathered fruits can not be separate (owned by someone other than the landowner) immovables. They are moveables when no unity of ownership. (474) if they are component parts of the ground b/c of unity of ownership. ii. Moveables can become immovables and then movables again this process is call deimmobilization (e) Deimmobilization(468) no longer servicing the immoveabe (1) damage or deteriorated (2) Sold to a 3rd party by the owner & delivered i. Sale does not deimmobilize it. The owner must authorize the sale or make the sale himself. There must be physical removal.

(3) In the absence of rights of third persons, the owner is free to de-immobilize anything (actual removal not intent to remove) iii. Materials gathered for the erection of a new building or other construction even though deriving from the demolition of an old one, are movables until their incorporation into the new building (472) (a) Materials separated from a building or other construction for the purpose of repair, addition, or alteration to it w/the intention of putting them back, remain immovables D. Susceptibility of touch 1. Corporeal - it has a body 2. Incorporeal - identify the object of the legal right. If the object of the right is immovable then it is an incorporeal immovable i. Incorporeal immovable: Rights and actions that apply to immovable things are incoporeal immoveables. (Personal and predial servitudes established on immovables, mineral rights, petitory or possessory actions) (470) Ex: mineral servitude, Trust (The thing placed in the trust is the object of the legal right court decided in St. Charles Land Trust that a trust is not a juridical entity which would make it an incorporeal moveable instead the object of the trust determines whether it is incorporeal moveable or immovable. Where in this case the trust was dealing w/mineral rights so incorporeal immoveable) ii. incorporeal moveable: Rights, obligations and actions that apply to a movable thing are incorporeal movables. Movables of this kind are such as bonds, annuities, and interests or shares in entities possessing juridical personality (473) Ex: juridical entities such as corporations,