author: BEER, Judge.

text:
    SHYLOCK, INC., d/b/a the Quarterdeck Restaurant v. COVENANT BROADCASTING CORPORATION OF LOUISIANA, d/b/a Radio Station WGSO and Thomas G. Fitzmorris, a/k/a Mister Food.
    No. 8456.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 10, 1977.
    Rehearing Denied Dec. 13, 1977.
    Writ Refused Jan. 30, 1978.

      Roger B. Jacobs, New Orleans, for plaintiff-appellant.
    Robert M. Johnston, New Orleans, for defendants-appellees.
    Before STOULIG, BOUTALL and BEER, JJ.
   BEER, Judge.

Appellant, Shylock, Inc. (hereafter, “Quarterdeck”), operates the Quarterdeck Restaurant.

Appellee, Covenant Broadcasting Corporation (hereafter, “Covenant”), operates radio station WGSO, where their employee, Thomas G. Fitzmorris, presents a program known as “Mister Food” on which he presents his unsolicited opinion of the food, service, selections, etc. at various local restaurants.

In his February 27, 1976 broadcast, Fitz-morris discussed the Quarterdeck and, in the course of same, stated:

“On the menu is a mixed grill, which is good veal, steak, lamb, and liver, all served together, and which unfortunately bears the same name as a kind of cat food which you can find at your neighborhood supermarket.”

These comments, part of a more complete description, were alleged to be defamatory even though without actual malice (since that contention was not affirmatively alleged) and to have resulted in damages to reputation and business of Quarterdeck in the amount of $100,000.

Defendants’ motion for summary judgment was based upon a record consisting of the depositions of William Rip Shylock, owner and operator of Quarterdeck, and of Fitzmorris, as well as a verified transcript of Fitzmorris’ full statement.

The motion was granted in accordance with the rule stated in Joiner v. Lenee, 213 So.2d 136 (La.App. 3rd Cir. 1968), writ ref., 252 La. 960, 215 So.2d 129, which tells us that:

“If the mover at the trial of a motion for summary judgment produces convincing proof, by affidavits or other receivable evidence, of the facts upon which the motion is based, and no counter-affidavits or other receivable evidence are offered by the opposing party to contradict that proof, then a conclusion may be justified that there is no genuine issue as to the facts so proved, even though allegations to the contrary might be contained in the pleadings.” Id., at 139. Accord, Garlington v. Kingsley, 277 So.2d 183 (La.App. 3rd Cir. 1973), reversed on other grounds, La., 289 So.2d 88.

Quarterdeck offered no evidence seriously contradicting the facts concerning the broadcast but its able counsel suggests that the trial court committed error by failing to apply the rule of Mashburn v. Collin, 341 So.2d 1236 (La.App. 1st Cir. 1976), writ granted, La., 343 So.2d 1074. In that case, our brothers in the First Circuit concluded that a restaurateur is not a public figure, but rather is a private person who need not allege and prove actual malice to recover in a defamation action. Counsel also points out that the U.S. Supreme Court, in Gertz v. Robert Welch, Inc., 418 U.S. 323, 94 S.Ct. 2997, 41 L.Ed.2d 789 (1974), has obviated the requirement of actual malice if plaintiff is a private person.

However, appellees contend that Gertz, supra, is inapplicable since appellant here is a corporation and not a private person. See, e. g., Martin Marietta Corp. v. Evening Star Newspaper Company, 417 F.Supp. 947 (D.D.C.1976).

Assuming arguendo that appellant is a private person, we do not find that the Gertz holding results in exempting appellant in this case from proving actual malice as is required under Louisiana law, which is more fully discussed hereinbelow.

The Gertz decision was rendered in an attempt to clarify previous Supreme Court decisions concerning the extent of the First Amendment constitutional privilege against liability for defamatory statements by newspapers and broadcasters. Specifically in question was the prior plurality opinion in Rosenbloom v. Metromedia, Inc., 403 U.S. 29, 91 S.Ct. 1811, 29 L.Ed.2d 296 (1971), which had extended the constitutional privilege to “all discussion and communication involving matters of public or general concern.” Id., at 44, 91 S.Ct. at 1820. The Gertz court, through Justice Powell, noted that under Metromedia and prior decisions, “a private citizen involuntarily associated with a matter of general interest has no recourse for injury to his reputation unless he can satisfy the demanding requirements of the New York Times test.” Id., 418 U.S. at 337, 94 S.Ct. at 3006.

In attempting to find a more equitable balance between the legitimate state interest in compensation of individuals for harm inflicted on them by defamatory falsehoods and, on the other hand, the strong protection afforded free speech and publication under the First Amendment, the Gertz court concluded that the constitutional privilege enunciated in New York Times v. Sullivan, 376 U.S. 254, 84 S.Ct. 710, 11 L.Ed.2d 686 (1964), which requires a showing of actual malice, should not extend to private individuals seeking to recover actual damages in a libel action. In so holding, the court expressed the view that the First Amendment privilege did not extend as far as previously had been.thought. However, it did not mandate that each state do away with a requirement under state law that malice be shown. On the contrary, Justice Powell remarked:

“We hold that, so long as they do not impose liability without fault, the States may define for themselves the appropriate standard of liability for a publisher or broadcaster of defamatory falsehood injurious to a private individual. This approach provides a more equitable boundary between the competing concerns involved here. It recognizes the strength of the legitimate state interest in compensating private individuals for wrongful injury to reputation, yet shields the press and broadcast media from the rigors of strict liability for defamation.” Id., 418 U.S. at 347, 94 S.Ct. at 3010, 3011 (footnotes omitted).

Observing that the Gertz holding leaves intact state defamation law as long as it does not impose liability without fault, we turn to consideration of Louisiana defamation law insofar as it requires a showing of malice.

The essential elements of a defamation action under Louisiana law are (1) defamatory words; (2) publication, that is, communication to some person other than the one defamed; (3) falsity; (4) malice, actual or implied; and (5) resulting injury. Carter v. Catfish Cabin, 316 So.2d 517 (La. App. 2nd Cir., 1975).

With regard to the requirement of malice, it is a well-established rule of law that where words are considered defamatory per se, malice is inferred from the mere fact of their publication. On the contrary, words defamatory per quod do not impute malice. See, Comment, 28 La.L.Rev. 82, 100 (1967). This rule was stated in Martin v. Markley, 202 La. 291, 11 So.2d 593, 596 (1942), as follows:

“In order to determine the soundness of this proposition, it becomes necessary to decide whether the matter contained in defendant’s letter is libelous per se, or whether it is merely libelous per quod. If it is libelous per se, the law presumes that it was false and malicious and plaintiffs’ allegation that it was false in whole or in part may be regarded as surplusage. On the other hand, if the writing is actionable per quod, then an allegation respecting falsity and malice is essential and, being essential, it of course follows that the defendant would be entitled to be informed as to what part or parts of the statement are false in order to prepare her defense.” (Citations omitted.)

In the instant case, plaintiff has not alleged actual malice. In its brief here, it is contended that the words complained of were defamatory per se, and malice is to be inferred. Thus, the issue before us is whether the words were defamatory per se, permitting an inference of malice.

The meaning of “defamatory per se ” was set forth in the often quoted case of Madison v. Bolton, 234 La. 997, 102 So.2d 433 (1958), wherein the court said:

“Words charged to be libelous have been classified as those that are susceptible of a defamatory meaning and those that are indisputably defamatory on their face. In the latter category they are actionable per se; they impute to the person the commission of a crime or subject him to public ridicule, ignominy or disgrace, and are susceptible of but one meaning. Words not actionable per se fall short of those requirements, and are found in numerous categories, among which are words that are actionable only in consequence of extrinsic facts, in which case the surrounding circumstances and conditions must be taken into account to determine the matter, or statements that contain language which unjustifiably tends to injure the reputation of a person, or reflect shame and disgrace upon him. The intent and meaning of an alleged defamatory statement must be gathered not only from the words singled out as libelous, but from the context as well, and the true meaning must be ascertained from a consideration of all parts of the statement as well as the circumstances of its publication. The test is the effect the article is fairly calculated to produce, the impression it would naturally engender, in the minds of the average persons among whom it is intended to circulate.” Id., at 437, 438 (footnotes omitted) (citations omitted).

We find no manifest error in the trial court’s legal conclusion that the words were not libelous per se (and that malice cannot be presumed).

Alternatively, appellant argues (although he has not plead malice) that Fitz-morris’ lack of concern for the consequences of his remarks constituted constructive malice. Fitzmorris’ deposition testimony, under cross-examination, shows:

“EXAMINATION BY MR. JACOBS:
Q. You, at no time, ever considered the possibility that this would be considered as cat food?
A. I considered the possibility, and for that reason, I worded the sentences as precisely as I did.
Q. You did consider — did you consider eliminating the reference to cat food?
A. I considered it on the basis that I didn’t want, obviously did not want to say that the place served cat food. What I considered — well, it is a writer’s thing. I am considering things like that all the time. For example, I say, ‘Escargots are excellent,’ not escargots are good or very good. I considered what I wanted to say, and I said what I wanted. My language was very precise. I said actually what I wanted to say. I considered probably in a passive way that I didn’t want to say anything else, so, I said what I said.”

There is no refutation of the implied contention that Fitzmorris carefully chose his words in an effort to avoid defamatory results and, therefore, appellant’s contention of constructive malice, raises no fact issue to be resolved on the merits.

Likewise, and notwithstanding Mashburn, supra, we find no disputed factual issue, nor any error of law, existent in the trial court’s granting of the motion. Though we cannot categorically define that point at which comments such as are here complained of constitute a factual issue vis-a-vis libel and slander, we are convinced that the trial court did not err in concluding that these particular words fall short, as a matter of law. (Note our opinion in Mitchell v. Truck Service, Inc., La., 286 So.2d 112 (1973).

Parenthetically, we observe that Fitzmor-ris’ remarks were inept and, in fact, displayed a basic and obvious ignorance with respect to the matters addressed. However, simple ineptitude and lack of skill do not obviate First Amendment protection as a matter of law. The motion was properly granted and is affirmed. Each party to this appeal will pay its own costs.

AFFIRMED.


source: Caselaw Access Project

license: Public Domain

text:
    Robbie K. POSTLEWAITE v. Jorge MORALES, Allstate Insurance Co. and Julio Quintanilla.
    No. 8459.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 10, 1977.

      Murphy & Simon, David T. Bowman, New Orleans, for defendants-appellants.
    Ralph E. Orpys, Metairie, for plaintiff-ap-pellee.
    Before STOULIG, BOUTALL and BEER, JJ.
   BEER, Judge.

Pedestrian appellee, Postlewaite, was the fault free victim of a two car collision between appellant, Morales, and one Julio Quintanilla. Morales was driving on Benefit Street in the direction toward Canal Street. He testified that he stopped at the corner of Benefit and Elysian Fields, waited for the traffic light to turn green, and proceeded across the intersection. Meanwhile, Postlewaite had walked across the lakebound lanes of Elysian Fields (on the lake side of Benefit Street) and reached the Elysian Fields neutral ground. At the same time, Quintanilla was driving lake-bound on Elysian Fields. Morales’ vehicle was struck on the left side by the Quintanil-la vehicle, causing it to swerve counterclockwise, strike Postlewaite, and injure him. Because he was struck from behind, Postlewaite did not see the accident and his testimony could shed no light on its cause.

The only eyewitnesses who testified at trial were Morales and another pedestrian, Celestina Jiminez. Jiminez’ testimony was confusing because of her difficulty in speaking and understanding English. Our review of her somewhat incomprehensible testimony indicates that she waited on the river side of Benefit Street for the light to change in her favor and then walked across the riverbound lanes of Elysian Fields and the neutral ground. As she began to cross the lakebound side of Elysian Fields, she was obliged to hurry because the Quintanil-la vehicle was approaching at a fast rate of speed. The crash immediately followed. She testified that the light controlling Elysian Fields traffic was red. This indicates to us that Quintanilla was driving through a red light.

Morales testifies clearly and emphatically that he did not proceed into the intersection until the light controlling his traffic flow was green.

There was no impeachment of Morales’ testimony although the able trial judge obviously found it difficult if not impossible to reconcile his testimony with the time and distance testimony of Jiminez, i.e., how could she walk across three lanes of traffic and the neutral ground in the same length of time that Morales traveled such a short distance in his car.

Based upon his determination that the Morales and Jiminez testimony “can not be reconciled,” the trial court concluded that “(t)his (case) is another application of res ipsa loquitur to multiple defendants,” citing Poche v. Frazier, 232 So.2d 851 (La.App.4th Cir., 1970), Benjamin v. Pizzalato, 245 So.2d 740 (La.App.4th Cir., 1971), and American Security Ins. Co. v. Griffith’s Air Cond., 317 So.2d 256 (La.App.3rd Cir., 1975). In casting Morales (and his insurer), the trial judge expressed his dismay at the “illogic and unfairness” of applying res ipsa loqui-tur to multiple defendants.

The rule of Poche v. Frazier, supra, is: “Our law is well settled that when an innocent third party is injured as a result of a collision between two drivers, each of the drivers is deemed guilty of negligence per se and the burden of proof falls upon each to exculpate himself from negligence proximately causing the injury to the third party.”

Poche v. Frazier, Benjamin v. Pizzalato and American Security Ins. Co. v. Griffith’s Air Cond. each dealt with a distinguishable fact situation, i.e., all defendants alleged to be joint tortfeasors were before the court and each alleged co-tortfeasor had the benefit of cross-examination of the other party’s witnesses in the course of their respective attempts to exculpate themselves. Here, Morales (and Allstate) have not had this opportunity. Even so, Morales has offered unrebutted (though somewhat confusing) testimony that the traffic signal light was in his favor. Jiminez’ testimony, though apparently irreconcilable with that of Morales in the eyes of the trial judge, was not expressly disbelieved by him nor does it challenge (except by the confusion caused) the straightforward testimony of Morales.

Although we are in sympathy with the trial court’s effort to respond to the predicament precipitated by the inability to cite and serve Quintanilla, we cannot agree that the res ipsa doctrine has been properly applied in the circumstances here existent. Res ipsa is applied after there has been a prima facie showing of negligence. It shifts the burden so that the exculpatory evidence of defendant is next considered. That consideration is a part of the trial court’s fact finding process and is not a process which is governed by the doctrine. See: Larkin v. State Farm Mutual Automobile Ins. Co., 233 La. 544, 97 So.2d 389 (1957).

Morales has carried the burden imposed by the application of the doctrine by his essentially unrefuted testimony that the light controlling his flow of traffic was green. At the very worst, the testimony of Jiminez may add some confusion to the otherwise clear picture described by Morales. However, her testimony cannot be said to challenge or refute Morales’ testimony regarding the facts of the accident, and the trial judge’s conclusion that “the two versions cannot be reconciled” is not a proper basis upon which to “apply” res ipsa and, in that way, conclude that Morales has not successfully carried the burden placed upon him.

The totality of the sworn testimony in this record is that the light was green for Morales and red for Quintanilla:

Morales’ testimony is as follows:
“Q. I see. Okay. When you got to Benefit and Elysian Fields what color was that light?
A. Red.
Q. Red. Then you proceeded across, is that correct?
A. I wait for the green light.”
Jiminez’ testimony is as follows:
“Q. What color was the light for the cars on Elysian Fields? (the location of Quintanilla’s car)
A. On Elysian Fields, was red, because I cross with the red light.
Q. You crossed Elysian Fields and the light was in your favor?
A. Excuse me?
Q. When you crossed Elysian Fields what color was the light facing you?
A. Red. Elysian Fields’ was red and Benefit green.
Q. Okay. And you tell us that the red car (Quintanilla) was on Elysian Fields?
A. Yes.
Q. The beige car (Morales) was on what?
A. Benefit.”

Even if Morales has a res ipsa imposed burden to exculpate himself from liability to the fault free plaintiff, he has successfully carried that burden. The trial court’s inability to “reconcile” the testimony of the two eyewitnesses on all issues of time, location and distance does not obviate the fact that both clearly support the straightforward contention that Morales was crossing the intersection on a green light and has, thus, exculpated himself from a presumption of fault.

The judgment is reversed and Postle-waite’s claim against Morales and his insurer is dismissed. Each party is to bear its own costs.

REVERSED AND RENDERED.

      . In his petition, Postlewaite alleged that Quin-tanilla was solidarily liable with Morales (and Allstate), who, in turn, filed a third party demand against Quintanilla. However, neither the original nor the third party demand were ever served on Quintanilla and the trial judge severed that claim from these proceedings.


text:
    LANGFORD LAND COMPANY v. DIETZGEN CORPORATION.
    No. 8460.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 10, 1977.

      Coleman, Dutrey, Thomason, Meyer & Jurisich, Richard B. Jurisich, David R. Pad-dison, New Orleans, for plaintiff-appellant.
    Gordon, Apata, McCollam & Watters, John M. McCollam, Andrew L. Gates, III, New Orleans, for defendant-appellee.
    Before STOULIG, BOUTALL and BEER, JJ.
   BEER, Judge.

Langford Land Company seeks to recover a deposit of $52,500, made pursuant to an agreement to purchase property at 318 Camp Street in New Orleans.

Survey of the property, made following the agreement, revealed that the building walls on the Gravier Street (north) and Natchez Street (south) sides straddle the property line. On the Gravier Street side, the wall extends to a maximum of 6 inches beyond the property line, and on the Natchez Street side, to a maximum of 10.6 inches. The Natchez Street wall is described as “party wall” on the survey. The survey also shows a fire escape extending beyond the rear property line.

Langford thereupon notified the prospective seller, Dietzgen Corporation, that they were unwilling to proceed, predicated upon clause 6 of the agreement:

“Subject to all title and zoning restrictions of record, or by laws or ordinances imposed, Dietzgen shall be obligated to deliver to Langford on the date of the act of sale a legal, valid and merchantable title to the Subject Property, in default of which the contract shall be null and void, reserving unto Langford the right to demand the return of the deposit made contemporaneously with the execution thereof.”

Concurrently, they asked for the return of the deposit.

Dietzgen responded, contending that the existence of party wall servitudes did not render this downtown municipal property unmerchantable, and expressed its intention to proceed. The date for the act of sale was set. Langford did not appear. The deposit has been retained by Dietzgen and this litigation resulted. Langford alleges, inter alia, that:

K* * *
VI.
The existence of said party wall servi-tudes creates an encroachment on the property and gives to the adjoining property owners rights and privileges in and to the walls on each sideline of the property, and rights and privileges on the land upon which said walls rest, all being portions of lots 11, 12, 29 and 30 of Square 167 of the First Municipal District, and the improvements which rest thereon.
VII.
The existence of said party walls renders it impossible for the defendant to deliver a merchantable title to the property, and petitioner called upon defendant to return the deposit in accordance with the provisions of paragraph 6 of the agreement. Petitioner has received a letter from defendant’s attorney refusing to return said deposit.”

The issue addressed in the pleadings and at trial was whether the alleged existence of party wall servitudes constituted an effective merchantability defect, nullifying the agreement. However, by pretrial motion, and, later, on appeal, appellant Lang-ford sought to raise other issues, alleging that the walls were not evenly centered on the property line, thus causing them to be something other than party walls. Evidence supporting these contentions was correctly held inadmissible and the fact that the survey showing these encroachments was admitted into evidence can not constitute enlargement of the pleadings, same having been admitted solely for the purpose of showing the encroachments specifically alleged. Young v. Stevens, 252 La. 69, 209 So.2d 25, 30 (1967). The appropriate remedy for amending the pleadings as provided in La.C.C.P. art. 1154 was not followed. The only issue properly before us is whether the existence of party wall servitudes on this urban lot constitutes an encumbrance sufficient to render title to the property unmerchantable.

In Roberts v. Medlock, 148 So. 474, 476 (La.App. 2nd Cir. 1933), the court described a merchantable title as:

“. . . one which can be readily sold or mortgaged in the ordinary course of business, to a reasonable person familiar with the facts and appraised of the question of law involved. It need not be free from every technical defect, of all suspicion, or the possibility of litigation. It must be a record title free of rational substantial doubt to the extent that a purchaser should feel that he can hold his purchase in peace without the probability of attack and with reasonable assurance that it will be readily salable on the open market, (citations omitted).
The word ‘merchantable’ implies something less than a perfect title and permits of defects which are not reasonably liable to result in assault. This presents a question of fact as well as one of law.” Accord, White v. Batson, 317 So.2d 205 (La. App. 1st Cir. 1975), writ refused, La., 320 So.2d 915.

In seeking to recover a deposit on the grounds that title is unmerchantable, one must show that third persons (not parties to the action) might thereafter make claims of a substantial nature against the property, and thereby subject the vendee to serious litigation. Kay v. Carter, 243 La. 1095, 150 So.2d 27, 29 (1963); Morgavi v. Mumme, 254 So.2d 278 (La.App. 4th Cir. 1971), rev. on other grounds, La., 270 So.2d 540; Pesson Plumbing and Heating Company, Inc. v. Hammonds, 160 So.2d 769 (La. App. 3rd Cir. 1964). Thus, where one seeks to demonstrate that a title is unmerchanta-ble as suggestive of litigation, he bears the burden of proof, as in any other usual litigation.

This record contains no evidence that the Gravier Street side wall, which abuts the parking lot, is, in fact, a party wall. The survey does describe the Natchez Street side wall as a party wall, and we will, arguendo, make that assumption. La. Civil Code art. 675 provides that he who first builds on urban property may rest one-half of his wall, up to nine inches not including plastering, on the land of his neighbor. However, a wall so constructed remains a private wall until the neighboring landowner, acting under either Article 676 or 684, compensates the builder of the wall for its use, at which time it becomes a common, or party, wall. See, A. N. Yianno-poulos, “Common Walls, Fences and Ditches: Louisiana and Comparative Law, 35 La.L.Rev. 1249 (1975).

The record in this case is devoid of evidence tending to show who built the walls and/or whether or not there was contribution by the neighbor who did not build.

Langford appears content to rest its contention that the title is suggestive of litigation on the theory that, regardless of whether there is, in fact, a party wall, the ultimate determination of that fact will require litigation, and, thus, the merchantability is impaired. They offer no proof that the threat of such is substantial, or has serious basis.

John Langford, president of Langford Land Company, indicated that the company’s refusal to proceed was further based upon a belief that half of the Natchez Street side wall belonged to the owner of the adjoining property (used as a parking lot) who might have objections to its demolition.

No other evidence supportive of the contention the alleged party wall was a possible cause of future litigation is in the record except the observation of Langford’s attorney advising against the purchase. This does not constitute a basis for a determination of unmerchantability. See: White v. Batson, supra; Pesson Plumbing and Heating Company, Inc. v. Hammonds, supra.

In Morgavi v. Mumme, supra, where plaintiff sought to recover a deposit made pursuant to an agreement to purchase real estate on the grounds that the property was not in compliance with certain zoning ordinances, we observed:

“The question before us is whether plaintiff proved by a preponderance of evidence that the title is not merchantable and is therefore under the agreement entitled to the return of the deposit as well as any amount for damages incurred.” Id., at 280.

Return of the deposit was denied because plaintiff failed to carry its burden of proof that any of the zoning ordinances were violated.

The burden of proof that merchantability is impaired by reason of being suggestive of litigation is, of course, quite different, and less stringent, than the burden of proof in actual litigation involving title to property and/or party walls. The burden, nevertheless, exists and, even though less stringent, must be affirmatively carried. There is no basis in this record for any presumption of impaired merchantability which relieved Langford of the burden of proof.

Langford’s contention that the existence of the alleged party wall constitutes an encumbrance in the form of a nonapparent servitude, thus constituting a right under La.Civ.Code art. 2515 to cancel the contract to purchase, is without merit. A prospective purchaser is deemed to know of servitudes imposed by law. Bourg v. Niles, 6 La.Ann. 77 (1851).

We find no error in the judgment of the district court, which is, accordingly, affirmed at appellant’s cost.

AFFIRMED.

      . By oral stipulation, this “encroachment” is not at issue.


text:
    PELICAN TOMATO CO., INC., et al. v. PHOENIX OF HARTFORD INSURANCE COMPANY and John J. Petre, Inc.
    No. 8486.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 10, 1977.

      Graffagnino, Perez & Roberts, A. Russell Roberts, Metairie, for plaintiffs-appellants.
    Bienvenu, Foster, Ryan & O’Bannon, Ernest L. O’Bannon, Christovich & Kearney, Alvin R. Christovich, Sr., New Orleans, for defendants-appellees.
    Before STOULIG, SCHOTT and BEER, JJ.
   BEER, Judge.

A three-year, multi-peril, “reporting endorsement” insurance policy was issued to appellant, Pelican Tomato Company, Inc., by appellee, Phoenix of Hartford Insurance Company, through the agency of appellee, John J. Petre, Inc. During the effective period of the policy, a fire occurred at appellant’s premises. A satisfactory adjustment for the loss of the building was made, but a dispute arose between insured and insurer on the amount due under the personal property coverage (Coverage B), which is based upon reports from the insured describing the changing value of personal property located on the insured’s business premises. The property here involved consisted of inventory (cantaloupe and tomatoes) as well as furniture, machinery and equipment.

Insurance (up to $60,000) was provided under the terms and conditions of the policy on the following basis:

“Full Reporting Clause: Liability under this policy shall not in any case exceed that proportion of any loss hereunder which the last value reported prior to the loss, at the location where the loss occurs, bears to the total actual cash value at that location on the date for which such report was made. Liability for loss hereunder occurring at any location acquired since filing the last report (except as provided in the Value Reporting Clause) shall be apportioned in a like manner, except that the proportion used shall be the relation that the values reported prior to the loss at all locations bear to the total actual cash values at all locations on the date for which such report was made.

The premium for the property coverage under the reporting indorsement was subject to adjustment based upon the average of total value reported. Failure to report the full value of covered property directly resulted in a lower premium.

Appellant had, throughout the policy period, made no report on the value of furniture, machinery and equipment but only the value of the inventory. When the formula provided for in the policy was applied to this figure, the claim recognized by the insurance company was $11,661.70 rather than the maximum of $60,000.00. This amount they placed in the registry of the court.

Appellant has refused this tender, contending that the Petre Insurance Agency, through its employee Yolanda Davis, informed Mr. Joseph Matassa, president of Pelican Tomato Co., that it was not necessary to report the machinery and equipment in the building each month since it was a “fixed cost.” That any such instructions were given is categorically denied by Mrs. Davis and by appellees, who point out that the value of the company’s machinery and equipment is not a fixed amount since it fluctuated as various additions are made and deletions occur.

Appellant alternatively argues that even if no such instructions were given by Mrs. Davis, the agency, itself, had an affirmative duty to advise the insured if it was apparent that erroneous reporting was taking place.

As to the first issue, the trial court has detailed reasons for judgment:

“Regarding the alleged instructions given by John J. Petre, Inc. to plaintiffs, Mr. Joseph Matassa testified at the trial that these instructions were obtained from Mrs. Davis about the time the policy was being written but that he couldn’t remember whether it was before or after the first monthly report. His attention was then called to the testimony he gave in a discovery deposition wherein he stated that he reported everything for the first few months before Mrs. Davis told him not to report his fixed costs. An examination of the reports reveals that these values were never reported prior to the loss. Moreover, the evidence indicates that the value of the fixtures and equipment was not constant. In fact the final total value of all the machinery and equipment was not $25,000 which he allegedly reported to Mrs. Davis, but over $56,000.
While it is true that the $56,000 figure includes some $22,000 worth of forklift trucks which may have been covered by other specific insurance, it appears that Mr. Matassa did, in fact, file a claim with Phoenix for the value of these trucks. The record further reflects that none of the other purchases of smaller items of equipment were ever reported to either of the defendants in any manner even though Mr. Matassa stated that Mrs. Davis told him to inform her of any additional purchases or dispositions of any equipment or machinery. Mr. Matassa stated that these additions were too minor to report.
Mr. Matassa also testified that he did not know that his insurance premiums fluctuated with the value given in the reports. However, this trial testimony also apparently conflicted with his previous deposition testimony.
Mrs. Davis, on the other hand, was adamant and unequivocal in her denial of Mr. Matassa’s allegations concerning the alleged instructions. ...
Mr. John Favalora, Mr. Matassa’s C.P.A., also testified that Mrs. Davis told him that only inventory items had to be reported when he inquired about this after the fire. Mrs. Davis admits that Mr. Favalora came to her office the day after the fire to obtain a copy of the policy but steadfastly denies telling him that machinery and equipment did not need to be reported. It is somewhat interesting to note that Mr. Favalora apparently put little weight in this alleged instruction as he promptly proceeded to prepare a detailed report giving a complete history of all the machinery and equipment purchases and values. He stated that he knew from prior experience that this type of policy required a full reporting of machinery and equipment items as well as the ‘inventory’ items.
The Court notes that neither Mr. Matassa nor Mr. Favalora have any documents or memoranda to support their allegations. It is well settled that in a civil case the plaintiff must prove his case by a preponderance of the evidence. After having had an opportunity to observe and weigh the testimony of the witnesses on this issue, the Court holds that the plaintiffs have not borne their burden of proving any wrongdoing on the part of the defendant, John J. Petre, Inc.”

We are of the view that the record supports these conclusions.

On the second, or alternative, issue raised by appellant, it is important to note that the agency did not assume the duty of reporting the values on a monthly basis to the insurance company. The record shows that the responsibility of the agency was simply to forward the report to the insurance company (after making a copy for their own internal files). Willard Gray, Senior Field Auditor for Travelers Insurance Company (which had bought out Phoenix by the time of the trial), testified that reporting indorsement policies are based on voluntary compliance, and that the company does not routinely check values as reported by the insured. In recognizing the duty thus imposed, the Louisiana Supreme Court, quoting Camilla Feed Mills v. St. Paul Fire and Marine Ins. Co., 177 F.2d 746, 747 (5th Cir. 1949), in Reilly-Benton Company, Inc. v. Liberty Mutual Insurance Company, 278 So.2d 24, 26 (La.1973), observed:

“ * * * The one big obligation placed on the. insured under such a policy was that he report to the company, not later than thirty days after the last day of each month, the exact value of such property covered under the policy, its exact location, and all other specific insurance in force on the same.”

The insured had underreported the value of its inventory, and the court upheld the insurance company’s invocation of a penalty clause in the policy.

The logic which makes reporting by the insured a workable arrangement is its self-policing feature, namely, that underreport-ing is penalized by the risk that the unreported property will become an uninsured loss. Logically, this risk makes it unnecessary for the agency to check the accuracy of the insured’s reports.

We agree with the trial court’s conclusion that neither the insurance company nor the insurance agency had any unfulfilled duty to further check the values set forth on the reports submitted by the insured.

The judgment is affirmed at appellant’s cost.

AFFIRMED.

      . There is no argument between the litigants about the correctness of the formula — only about the gross figure to which it applies.


text:
    RACELAND STOCKYARDS, INC., et al. v. Vincent GIAISE.
    No. 8530.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 10, 1977.
    Rehearing Denied Dec. 13, 1977.
    Writ Refused Jan. 30, 1978.

      George O’Dowd, New Orleans, for defendant-appellant.
    Gordon Hackman, Boutte, for plaintiff-appellee.
    Before REDMANN, STOULIG and BEER, JJ.
   BEER, Judge.

Appellant, Vincent Giaise, does business as Big G. Stockyards. After a fire on August 26, 1974, in which he believed his records had been destroyed, he requested ap-pellee, Raceland Stockyards, Inc., to send a duplicate bill for cattle purchased earlier that day at appellee’s stockyard auction. Appellee’s manager, Charles L. Kolon, thereupon submitted two duplicate bills, one for $2,490.37, covering purchases of August 26, 1974 (later acknowledged to be incorrect and changed to $2,369.88), and one for $1,547.52, allegedly covering purchases of August 19, 1974. Appellant denies ever having made the August 19th purchases or, for that matter, having even been at the stockyard auction on August 19, 1974.

Appellee’s original claim for $3,917.40 was reduced to $1,547.52, and, after trial, judgment for Raceland Stockyards, Inc. was rendered in that amount. Appellant contests the correctness of that judgment as well as the admissibility of certain documents as proof of the alleged debt.

Raceland Stockyards, Inc. adduced no testimony which could prove that Giaise was present at the cattle auction on August 19, 1974. Giaise categorically denied that he was present on that date. In its attempt to prove the August 19th transaction by other evidence, Raceland Stockyards, Inc. introduced the following exhibits:

1) Exhibit P-3 (premarked D-l, “Exhibit A”), a pink carbon copy of a duplicate bill for $1,547.52. Kolon, appellee’s manager, admitted that this was not the original bill but instead was a bill he made up after Giaise’s fire and request for a bill. He claimed the amount owing would be borne out by the scale tickets in his office. He failed to produce the original office copy, which he said was supposed to have been kept in his office. No clear reason was advanced for the failure to produce the original business record.
2) D-l. The white “original” copy of the duplicate bill, handcopied by Kolon from his records after Giaise requested a billing. The pink copy (P-3) is a carbon copy of this.
3) D-4. A yellow carbon copy of the same.
4) P-6. Original “scale tickets” showing the number and weight of heads of cattle allegedly sold to Big G. on August 19, 1974.

These documents must be considered with some explanation of the auction procedure, which is as follows: After the auctioneer accepts a bid, the animal is driven into a weighing pen and weighed. At this point, a “scale ticket” is made which shows the name of the buyer and the animal’s weight. This ticket is sent to the office where the invoice is prepared. An original invoice with three carbon copies is made. The white original is handed to the buyer when he pays, or is later mailed out as a bill. The yellow copy is sent to the bookkeeper. The pink is given the customer to check the animals out, and the blue copy is retained in the office’s records, as are the scale tickets.

Appellant contends that the carbon copies of the recopied invoice are inadmissible. We agree. In Fidelity National Bank v. Jack Neilson, Inc., 248 So.2d 412, 416 (La. App. 4th Cir., 1971), we observed:

“When an original document is not available, a copy may be used, but only after proof has been adduced that a diligent effort was made to obtain the original and that it was unavailable or where proof is adduced that an effort to search for the original would amount to a vain and useless gesture. This rule was recognized and followed by the Louisiana Supreme Court in the case of Mercier v. Harman wherein the organ for the court stated that the best evidence rule was ‘ * * * an elementary principle * * found in every work on evidence, and so completely consecrated by established jurisprudence as to dispense with any citation of authorities to support it.’ ”

Even if the white original had, in fact, been mailed to Giaise, as contended by Raceland Stockyards, Inc., they should have produced one of their copies of the original invoice. No reason for nonproduction of either of the retained office copies of the original was offered. Appellee argues that the pink and yellow copies of the admittedly copied invoice are “duplicate originals” and were properly admitted. Wrong. There is no basis for concluding that they are “duplicate originals” of the alleged original August 19th invoice, and they were incorrectly admitted. McCormick’s Handbook of the Law of Evidence, 560 et seq. (2d ed. 1972).

The August 19th “scale tickets” are alleged to be original and are identified by the stockyard employee who prepared them. However, Giaise objects on the ground that they are inadmissible as business records, and, further, that they are not the best evidence even though the scale tickets are, as previously noted, the basic information from which the invoice is prepared. Louisiana courts have treated such original records from which invoices or ledgers were made as being better evidence than the subsequently compiled ledger or invoice. See, e. g., Crosby v. Little River Sand and Gravel Development, 212 La. 1, 31 So.2d 226 (1947); Talley v. Duplantis, 213 So.2d 82 (La.App. 1st Cir., 1968). Braud v. Hinchen, 310 So.2d 657 (La.App. 1st Cir., 1975). Thus, we are of the view that the scale tickets were properly admitted although we have grave reservations concerning their accuracy and authenticity.

Accordingly, the only properly admitted evidence in support of the alleged transaction on August 19th consists of the scale tickets showing purchases in the amount of $1,547.52 on that date by Big G., since the tickets were identified by their maker as being in her handwriting. However, those scale tickets, even though admissible, do not bear Giaise’s signature or any other indication of his confirmation as to acceptance or accuracy.

Perhaps overlooked in all of the discussion about the admissibility of the various documents is the uncontested and apparently accurate statement of Giaise on cross-examination by counsel for Racelands Stockyards, Inc. to the effect that a purchaser must sign the yellow copy of the invoice. Specifically:

Q. (By Mr. Hackman on cross-examination of Giaise)
“You always sign the yellow copy, right?”
A. (By Giaise)
“Yes sir. You can’t get nothing unless you sign it.”

Yet, no document was ever produced that was even alleged to bear Giaise’s signature. Furthermore, implicit in the admitted error on the “duplicate original” of the August 26th invoice is the fact that Giaise would have been called upon to pay the incorrect (and substantially greater) amount had he not been lucky enough to salvage his copy of that original invoice. And, even though the scale tickets were identified by Mrs. Daigle as being in her handwriting (and, thus, in our view, admissible), we find that they provide little support for the stockyard’s strongly contested allegation that a sale took place to Giaise on August 19th. Finally, we note the obvious which is that the fire destroyed Giaise’s records — not those of the stockyard. And, yet, no acceptable explanation is offered as to why the stockyard had to prepare “duplicate originals” of the questioned bills — one of which admittedly contained an error in their favor and the other of which being hotly contested in this litigation as to its actual existence.

We believe that all of the admissible evidence, except the scale tickets, supports a contrary conclusion to that reached by the district court. We will not conjecture as to how and under what circumstances the scale tickets may have been prepared, but we are of the view that the trial court has erred in its conclusion that a sale to Giaise did take place on August 19th. The rule that the judgment of a trial court on questions of fact will not be disturbed unless manifestly erroneous is not applicable where the question is one of sufficiency and preponderance of evidence rather than of credibility of witnesses. Blue Streak Enterprises v. Cherrie, 263 So.2d 734 (La. App. 4th Cir., 1972), and Jones v. Byrant, 283 So.2d 307 (La.App. 4th Cir., 1973). Here, we believe that the evidence so preponderates in behalf of Giaise that we must reverse.

Accordingly, the judgment of the 29th Judicial District Court for the Parish of St. Charles is reversed and set aside, and it is now ordered, adjudged and decreed that plaintiff’s suit be dismissed. All costs, in-eluding the costs of this appeal, are to be paid by appellee.

REVERSED AND RENDERED.

      . This part of the procedure will be discussed in more detail further in this opinion.


text:
    Joseph Folse ROY v. Hazel Livingston, wife of Joseph Folse ROY.
    No. 9154.
    Court of Appeal of Louisiana, Fourth Circuit.
    Nov. 16, 1977.

      Sydney J. Parlongue, New Orleans, for relator.
    M. Arnaud Pilie, Gibson Tucker, Jr., New Orleans, for respondent.
    Before GULOTTA, BOUTALL and BEER, JJ.
   BEER, Judge.

We granted certiorari in order to review the correctness of the district court’s rulings of September 23, 1977 and October 7, 1977 which have had the combined effect of continuing, in full force and effect, a temporary restraining order that had originally expired in August of 1977 and dismissing a rule to test the surety on a bond filed by respondent in rule, Hazel Livingston, wife of Joseph Folse Roy. Initially, we addressed the question of whether or not an admittedly expired temporary restraining order can be “extended” by oral motion.

Although the Code of Civil Procedure provides that extensions of a temporary restraining order may be granted provided that none are extended by the court for a period in excess of ten days, the verbiage of those several articles dealing generally with temporary restraining orders sound a certain note of urgency. For example, article 3606 provides that when a temporary restraining order is granted, the application for preliminary injunction is to be heard “at the earliest possible time” and “shall take precedence over all matters except older matters of the same character.” It is available only upon a verified petition supported by sworn allegations of immediate and irreparable injury, and the order for same must show not only the date and hour of issuance but “why” it was granted. There is good reason for this. A temporary restraining order is, as the name implies, a transitory restraint intended to provide only a brief, tentative holding of the line and is clearly not available as a convenience item for the use of attorneys and litigants.

Accordingly, we conclude that the informal, summary manner in which the temporary restraining order with which we are here concerned has been, on several occasions, “extended” was inadequate and insufficient.

Although this determination essentially renders moot our inquiry into the sufficiency of the surety, we make the following observations for such guidance as may be useful to the litigants and their counsel and for such consideration as a reviewing court may wish to give:

In our view, Mr. Andy Roy has not shown an acceptable level of ability to pay the amount for which he seeks to stand as surety. Black’s Law Dictionary describes “solvency” as “ability to pay debts as they mature; ability to pay debts in the usual and ordinary course of business” and goes on to describe same as “such attitude of a person’s property as that it may be reached and subjected by process of law, without his consent, to the payment of such debts.” His situation does not fit any of those definitions.

Our review of the testimony and notes of evidence taken on October 7,1977 lead us to the firm conclusion that, at least as of that date, and pursuant to that record, Andy Roy was not a solvent and sufficient surety, and it was manifest error to so conclude.

The temporary restraining order is dissolved. All costs of this appeal are taxed against respondent, Hazel Livingston, wife of Joseph Folse Roy. •

REVERSED AND RENDERED.


author: HOOD, Judge.

text:
    ACME POSTER ADVERTISING COMPANY, Plaintiff-Appellee, v. STATE of Louisiana, Through the DEPARTMENT OF HIGHWAYS, Defendant-Appellant.
    No. 6142.
    Court of Appeal of Louisiana, Third Circuit.
    Nov. 17, 1977.
    Jonathan C. Harris, Norman L. Sisson, William W. Irwin, Jr. by Jonathan C. Harris, Baton Rouge, for defendant-appellant.
    Whitehead & McCoy by C. R. Whitehead, Jr., Natchitoches, for plaintiff-appellee.
    Before HOOD, CULPEPPER and GUI-DRY, JJ.
   HOOD, Judge.

Acme Poster Advertising Company instituted this suit against the State of Louisiana, through the Department of Highways, for damages resulting from the alleged unauthorized removal of some highway billboard signs owned by plaintiff. A default judgment was rendered in favor of plaintiff. Defendant filed a motion for a new trial which was denied, and defendant thereupon appealed.

The overriding issue presented in the case is whether the signs for which plaintiff seeks to be compensated were located on private property as contended by plaintiff, or whether they were located on a state-owned highway right-of-way as contended by defendant. The specific issues to be determined on this appeal are whether the evidence is sufficient to support the default judgment which was rendered by the trial court, and whether the trial court erred or abused its discretion in denying defendant’s motion for a new trial.

For a period of at least 16 years prior to January, 1976, plaintiff owned and maintained nine billboard signs on or near the right-of-way of U. S. Highway 171, in Vernon Parish. The signs were removed on or about January 23, 1976, without plaintiff’s permission. Plaintiff contends that the signs were located on private property, that they were removed by defendant or its employees without authority, and that defendant is liable to plaintiff for the damages it sustained as a result of that action by the Highway Department.

This suit was instituted on February 19, 1976, and service of process was made on defendant the next day. A preliminary default was entered on March 16, and that default was confirmed in open court before the late Judge Stewart S. Kay on March 24, 1976. A default judgment in favor of plaintiff was signed by Judge Kay on the last mentioned date. Notice of that judgment was served on defendant, and thereafter the state timely filed a motion for a new trial.

A hearing on the motion for new trial was scheduled to be held before Judge Kay on June 8, 1976. The court was notified shortly before the time set for the hearing, that counsel for defendant would be late in arriving at the hearing and counsel for defendant, in fact, failed to appear when court was opened on that day. When court convened, however, plaintiff was permitted to file a memorandum, and Judge Kay left the matter open for defendant to file evidence later in the day. The minutes of the court for June 8, 1976, show:

“Plaintiff present and represented by counsel, C. R. Whitehead, Jr. Counsel for defendant failed to appear at this time. Court was informed that counsel was on his way here and would be late arriving. Memorandum was filed by plaintiff. Court left matter open for defendant to file whatever he may desire upon arrival.” (Emphasis added).

Counsel for defendant arrived at the courthouse later that day, after the court had recessed or adjourned, and in accordance with the order of the judge, as shown in the minutes, it filed several documents with the Clerk of Court on June 8, 1976, in support of its motion for a new trial. Included among those documents were a plat of survey, several right-of-way deeds and two acts of recession. Those documents purport to show that the signs at issue here were located on state-owned property, and not on private land as contended by plaintiff.

Judge Kay died in September, 1976. He had not ruled on the motion for a new trial prior to his death.

On January 19, 1977, Judge Ted Broyles, who in the meantime had succeeded the late Judge Kay, rendered judgment denying the motion for a new trial, and he assigned written reasons for that judgment. In those reasons Judge Broyles noted that “evidently, there was no hearing held on the motion for a new trial,” and he stated:

“If any grounds existed to convince the Court of the need for a new trial, it should have been presented at the hearing on the motion for new trial. Mover filed several documents (right-of-way deeds, act of retrocession, and survey plat) but they were not offered during any hearing on the motion and in any event, their relevance and probative value are not clear. If counsel was unable to attend, doubtless additional time or continuance would have been permitted by the presiding Judge, but there is nothing in the record to indicate that counsel sought additional time or a continuance.” (Emphasis added).

We believe that Judge Broyles either did not admit in evidence the documents which defendant filed on June 8, 1976, in support of its motion for a new trial, or at least he did not consider those documents. We base that conclusion partly on the reasons which he assigned for judgment, and partly on the fact that we think he would have granted a new trial if he had considered those documents.

After the motion for a new trial was denied, defendant filed a “Motion for Rehearing of Motion for New Trial,” in which it prayed simply that the court grant a hearing on its original motion nor a new trial, since the ruling of Judge Broyles denied them the hearing or the right to introduce documents in evidence which Judge Kay had granted. The last motion apparently was denied, and defendant appealed. It is that appeal which is before us now.

We have decided that the evidence does not support the default judgment which was rendered, and that the judgment appealed from must be reversed and the case remanded to the trial court.

The principal issue presented in this case, as shown in plaintiff’s petition, is whether the tracts of land on which the signs were located were privately owned, or whether they were included in the highway right-of-way. In Article 4 of the petition, for instance, plaintiff alleges that “On or about November 12, 1975, defendant made demand upon plaintiff to remove the said structures and offered to pay no compensation for the said structures.” And, in Article 7 it alleges that “any action by the defendant purportedly under the provisions of R.S. 48:347 is illegal, as that statute . is unconstitutional,” since it authorizes the taking of plaintiffs property without a prior opportunity to be heard. Plaintiff prays for a declaratory judgment decreeing the statute to be unconstitutional.

LSA-R.S. 48:347C provides:

“C. Whenever any of the things described in Subsection A of this Section (that is, any structure, sign, obstacle, object, deposit or thing) are found to exist within the limits of a highway, the department may summarily remove and dispose of it at the expense of the person responsible therefor. If it retains apparent .value, the owner shall be notified, orally or in writing, to remove it within five days or such other period as may be agreed upon. If the owner be unknown or cannot be found, a written notice shall be affixed to the object setting forth that it must be removed within a period not less than five days from the date specified. Failure to remove within the specified period operates as a forfeiture of all rights thereto and the department may remove the object for its own use, or dispose of it at private or public sale, or destroy it, or dispose of it in any manner. The owner and any other person responsible therefor remains liable for any damage to public property or expenditure of highways funds resulting from the installation or removal of such things.”

We think the allegation in plaintiff’s petition, that it received a notice from the Highway Department demanding that it remove the signs from the highway right-of-way pursuant to LSA-R.S. 48:347, constitutes or is tantamount to an allegation that the Highway Department claimed at that time that the signs were located on the “limits of a highway” or on a state-owned highway right-of-way. Plaintiff then alleges, in substance, that despite this claim by the Highway Department the signs actually were located on private property, but that even if the signs were located on the state owned right-of-way, LSA-R.S. 48:347 nevertheless is unconstitutional and does not give the state the right to remove the signs without compensating plaintiff.

The petition itself thus shows that an important factual issue was presented when the case came up for confirmation of default, that is, whether the signs were located on private property or on the highway right-of-way. In order for plaintiff to recover it was essential that it show (1) that the signs were located on privately-owned property, or (2) that LSA-R.S. 48:347 is unconstitutional.

Judge Kay refused to decree LSA-R.S. 48:347 to be unconstitutional. We base that conclusion on the fact that the form of judgment which was presented to him for signature contained a provision decreeing the above section of the Revised Statutes to be unconstitutional, but that provision was clearly marked out and Judge Kay’s initials appear opposite the deleted part of the judgment showing that he intended to eliminate such a provision from the decree. Since Judge Kay did not decree the act to be unconstitutional, it is obvious that he based the default judgment solely on a factual finding that the signs which are at issue here were located on privately-owned property.

The evidence which was offered by plaintiff at the confirmation of the default consisted solely of the testimony of John Luster, the managing partner in the plaintiff company, the testimony of Mrs. Mary Deaz-endorf, the office manager of that company, and some photographs of the signs taken before they were removed. The testimony of the witnesses was transcribed and the transcript of that testimony is in the record. Judge Kay did not give written or oral reasons for the default judgment which was rendered.

Luster testified that the signs at issue here were removed on January 23, 1976, that plaintiff was not paid any compensation for them, and that no suit was filed and plaintiff was given no hearing before the signs were removed. That part of Luster’s testimony which relates to the ownership of the tracts of land on which they were located is as follows:

“Q. And in your petition you allege that signs three, four and five were on land belonging to Mr. W. H. Morris — is that correct?
“A. Yes sir. There are recorded leases downstairs on these.
“Q. And board six, seven and eight were on lands belonging to whom?
“A. Belonging to Mr. Tom Guess — the oldest — (pause) Let me get my records here. Tom Guess — and then we paid Mrs. Ruby Maddox, after that.”
“Q. And the rest—
“A. The rest belonged to Mrs. Dennis Cook and Robert F. McClain, Jr.”

Mrs. Deazendorf testified, as we interpret her statements, that for several years prior to 1976 plaintiff had paid rentals “to the various property owners” on all of the signs involved here, except one. She also stated that she prepared the plat which is attached to plaintiff’s petition, purporting to show the location of the signs with reference to the highway. The highway is marked on that map by a single line, however, and we assume that the line is intended to show the centerline of the highway. The plat does not show the width or boundaries of the highway right-of-way, it is not drawn to scale, it does not show the ownership of any property in that area, and it? does not purport to show whether the signs were on private property or on the highway right-of-way prior to their removal.

One of the photographs in the record shows three billboard signs with a white fence between them and the highway. Luster identified the signs shown in that photograph as being three of the signs which were later removed, and he stated that the fence was “Mr. Morris’ fence in front of his property.” That photograph, and the others, show the signs to be located close to the hard surfaced part of the highway.

When the default was confirmed in this case, no deeds or any other documents were introduced in evidence by plaintiff tending to show the ownership of the tracts of land on which the signs were located. Although Luster stated that there were “recorded leases” affecting those tracts, the leases were not introduced in evidence and the alleged owners of the property were not called as witnesses. No effort was made to give the descriptions of the privately-owned property on which the signs allegedly were located, or to show the width of the right-of-way in that area or the boundary lines between the right-of-way and the privately-owned tracts.

LSA-C.C.P. art. 1702 provides that “a judgment of default must be confirmed by proof of the demands sufficient to establish a prima facie case.” A default judgment rendered without proof of a demand sufficient to establish a prima facie case must be set aside. Evangeline Employment Service v. Decuire, 340 So.2d 1113 (La.App. 3 Cir. 1976); Courville v. Southern Casualty Insurance Company, 304 So.2d 93 (La.App. 3 Cir. 1974).

In Helmer v. Callaway, 342 So.2d 254 (La.App. 4 Cir. 1977), the Fourth Circuit Court of Appeal held:

“We do hold that the judgment was improvidently rendered because plaintiff failed to establish a prima facie case. It was essential for him to prove all the allegations of the petition as though they had been specifically denied and this he failed to do. See Calvert Fire Insurance Company v. Felton, 244 So.2d 311 (La. App. 4th Cir. 1971).”

The First Circuit Court of Appeal stated in Bonfouca Inv. Corp. v. Eubanks, 347 So .2d 1277 (La.App. 1 Cir. 1977), that:

“In order to confirm a judgment by default, the plaintiff must prove the essential elements of the claim by competent evidence with legal certainty, as fully as though each allegation was specifically denied by the defendant. Wall v. Sun Insurance Co. of New York, 189 So.2d 713 (La.App. 1 Cir. 1966), writ den. 249 La. 764, 191 So.2d 141.”

We have concluded that the evidence produced by plaintiff to support the default judgment which is before us on this appeal is not sufficient to establish a prima facie case that the signs in question here were located on privately-owned property, rather than on the state-owned highway right-of-way.

As already noted, the principal issue presented in this case is whether the signs were located on privately-owned property, rather than on a state-owned right-of-way. We must assume that the Highway Department specifically denied plaintiff’s allegations that they were located on private property, and the burden thus rested on plaintiff to prove its allegations by competent evidence with legal certainty. The only evidence presented by plaintiff to establish that essential fact consisted of what we consider to be a somewhat vague and general statement to that effect by Mr. Luster, and the testimony of Mrs. Deazen-dorf that rentals had been paid to various unidentified property owners for permitting the maintenance of those signs. We feel that plaintiff failed to meet the burden of proof which rested on it to support its demand for a default judgment.

Plaintiff argues, however, that the evidence presented furnishes a reasonable factual basis for the default judgment appealed from, and that under Canter v. Koehring, 283 So.2d 716 (La.1973), that judgment should be affirmed. We have considered the evidence and judgment in light of the rules set out in Canter, but find that the judgment cannot be affirmed under those or any other rules. We have given great weight to the factual conclusions of the trier of fact, but have concluded that the evidence does not furnish a reasonable factual basis for the trial court’s finding.

Plaintiff argues, finally, that “no court may legally set aside a default judgment when the trial judge has refused the defendant a new trial.” To support that argument, it relies on Succession of Rock v. Allstate Insurance Company, 340 So.2d 1325 (La.1976). We do not agree with plaintiff’s interpretation of the Rock case.

In Succession of Rock, supra, our Supreme Court held that when there is no transcript of testimony, and the default judgment recites that plaintiff has produced due proof in support of his demands, a presumption exists that the judgment was rendered on sufficient evidence. That case is not applicable to the instant suit, however, because the testimony was taken down in this suit and the record contains a transcript of that testimony. When the testimony is taken down and a transcript of that testimony is in the record, then the presumption described in Rock, supra, that plaintiff produced due proof in support of his demands, does not come into existence. See Guillory v. Deshotels, 254 So.2d 505 (La.App. 3 Cir. 1971).

Our conclusion is that the evidence fails to establish that the signs in question here were located on privately-owned property, outside the boundaries of the state-owned right-of-way. The default judgment appealed from thus must be reversed and the case remanded to the trial court.

Since we have concluded that the trial court judgment must be reversed for the reasons above set out, it is unnecessary for us to consider the additional arguments made by defendant on this appeal. We express no opinion as to whether the trial court erred or abused its discretion in denying defendant’s motion for a new trial.

The issue of whether LSA-R.S. 48:347 is unconstitutional is not before us, since the trial court rejected plaintiff’s demand for such a decree and plaintiff has not appealed or answered defendant’s appeal.

For the reasons assigned, the judgment appealed from is reversed, and the case is remanded to the trial court for further proceedings consistent with the views herein expressed. The costs of this appeal are assessed to plaintiff-appellee. All other costs are to be assessed by the trial court in subsequent proceedings.

REVERSED AND REMANDED.


author: DOMENGEAUX, Judge.

text:
    Cleveland GUILLOT and Aubrey Marceaux, Plaintiffs-Appellees, v. KAPLAN FARMERS CO-OP, INC., Defendant-Appellant.
    No. 6165.
    Court of Appeal of Louisiana, Third Circuit.
    Nov. 17, 1977.

      J. Isaac Funderburk, Abbeville, for defendant-appellant.
    Edwards, Stefanski & Barousse by Homer E. Barousse, Jr., Crowley, for plaintiffs-appellees.
    Before DOMENGEAUX, WATSON, and GUIDRY, JJ.
   DOMENGEAUX, Judge.

Plaintiffs, Cleveland Guillot and Aubrey Marceaux, bring this action to recover damages to their rice harvest when part of their crop allegedly became stack burned at the defendant’s processing plant.

Plaintiffs operate a rice farm on a partnership basis. Marceaux owns the land and receives forty percent of the revenue from the farm; Guillot performs the labor and receives sixty percent of the revenue from the farm. In August of 1974, plaintiffs brought a sample of rice to the defendant Kaplan Farmers Co-op, Inc. (Co-op) in order to determine whether their rice was ready for harvesting. The Co-op is engaged in the drying and storage of rice. Lynwood Meaux, acting manager of the Co-op, informed Guillot that the rice was ready to be cut and harvesting was begun.

Six loads of rice were brought to the Co-op on August 9th and two loads on August 10th. All eight loads were accepted by Meaux and receipts were issued. However, after a few loads arrived at the Co-op, Meaux determined that the moisture content in the rice was too high and that therefore, the rice was too green to harvest. Rice with higher moisture levels runs a greater risk of stack burning while being stored than rice with lower moisture levels. Meaux directed one of Guillot’s truck drivers to tell Guillot to cease harvesting procedures. The message was never relayed. It is unclear whether this occurred on August 9th or August 10th.

On August 10th Marceaux went to the Co-op. Meaux informed him of the high moisture content of the rice and advised that harvesting should cease. When Mar-ceaux arrived at the farm to tell Guillot, he found that Guillot, having drawn the same conclusion, had already ceased harvesting.

The drying process of the eight loads of delivered rice took place from August 14th to August 22nd. The rice was continually stored at the Co-op until it was sold. When the rice was graded by the Department of Agriculture it was found to be stack burned.

As a result of the stack burning, plaintiffs claimed that they received $8.00 per barrel less for the damaged rice than for the normal rice later harvested in the same field during the same season. Plaintiffs seek recovery for this differential as well as the increased storage costs incurred while seeking a willing buyer for the stack burned rice.

The trial court awarded a price differential totalling $6,869.12, but denied the demand for storage expenses. It found that plaintiffs had an opportunity to sell the rice at an earlier date and that, therefore, the storage costs were incurred needlessly. A motion for a new trial was denied and defendant appealed.

The resolution of this case hinges upon the nature of the contractual relationship between plaintiffs and the Co-op and the obligations which spring forth from this relationship.

It is obvious that the contractual relationship between plaintiffs and the Coop is that of deposit. See Soileau v. Ville Platte Rice Drier, Inc., 322 So.2d 404 (La. App.3rd Cir. 1975). Louisiana Civil Code Article 2926 defines deposit as “an act by which a person receives the property of another, binding himself to preserve it and return it in kind.”

Article 2929 states that the deposit is essentially gratuitous and that “[i]f the person with whom the deposit is made receive a compensation, it is no longer a deposit, but a hiring.” Since the Co-op in this case received compensation from plaintiffs this would seem to lead to the conclusion that the articles on lease rather than deposit would apply. Such is not the case. The Code contemplates the concept of a compensated depositary. Article 2938 states in part that the degree of care required of a depositary is to be rigorously enforced “[i]f it has been agreed that he shall have a reward for preserving the deposit.” Furthermore, both Louisiana and France have recognized the validity of a deposit for compensation. 2 Planiol, Civil Law Treatise pt. 2, no. 2205 at 274 (11th ed. La.St.L.Inst. transl.1959); Comment, Bailment and Deposit in Louisiana, 35 La.L.Rev. 825, 828 (1975). See, e. g., Coe Oil Service v. Hair, 283 So.2d 734 (La.1973); Soileau v. Ville Platte Rice Drier, Inc., supra; Insured Lloyds v. Liberty Mutual Insurance Company, 295 So.2d 206 (La.App.3rd Cir. 1974); Hazel v. Williams, 80 So.2d 133 (La.App.2nd Cir. 1954).

Having determined the relationship between the Co-op and the farmers is that of deposit, we move to the question of the Co-op’s obligation. Articles 1908, 2937, and 2938 of the Civil Code are applicable. Article 1908 provides:

“Art. 1908. The obligation of carefully keeping the thing, whether the object of the contract be solely the utility of one of the parties, or whether its object be their common utility, subjects the person who has the thing in his keeping to take all the care of it that could be expected from a prudent administrator.
This obligation is more or less extended with regard to certain contracts, the effects of which, in this respect, are explained under their respective titles.”

Article 2937 provides:

“Art. 2937. The depositary is bound to use the same diligence in preserving the deposit that he uses in preserving his own property.”

Article 2938 provides:

“Art. 2938. The provision in the preceding article is to be rigorously enforced:
1. Where the deposit has been made by the request of the depositary.
2. If it has been agreed that he shall have a reward for preserving the deposit.
3. If the deposit was made solely for his advantage.
4. If it has been expressly agreed that the depositary should be answerable for all neglects.”

The depositary, whether gratuitous or compensated, is held to the standard of prudent administrator. Leatherman v. Miller’s Mutual Fire Insurance Company, 297 So.2d 540 (La.App.3rd Cir. 1974); Chrysler Credit Corporation v. Caulfield, 252 So.2d 461 (La.App.4th Cir. 1971), application denied 259 La. 956, 253 So.2d 794 (1971); Zesiger v. Dean, 247 So.2d 222 (La. App.4th Cir. 1971). This standard is to be applied more rigorously when the depositary is compensated. Once the existence of the deposit and the damage to the deposited property is established, a presumption arises that the injury was caused by the depositary’s breach of his obligation of care. E. g., Coe Oil Service v. Hair, supra; Soileau v. Ville Platte Rice Drier, Inc., supra; Insured Lloyds v. Liberty Mutual Insurance Company, supra; Federal Insurance Company v. C & W Transfer and Storage Company, Inc., 282 So.2d 563 (La.App.4th Cir. 1973); Chrysler Credit Corporation v. Caulfield, supra; Zesiger v. Dean, supra.

Therefore, in the instant case plaintiffs must prove only that the rice deposited at the Co-op was not stack burned at the time of delivery and that it was stack burned at the time of retrieval. We find that these facts have been established in the record.

Expert testimony reveals that stack burning can occur if green rice is improperly stored or left in a truck for an excessive period of time. It was determined that the rice was brought to the Co-op within a few hours after it had been cut. Thus, it did not sit in the trucks for an undue period of time. Furthermore Meaux, the acting manager of the Co-op who accepted the rice testified that he noticed no stack burned rice at the time of delivery. We find, therefore, that the rice was not damaged when it arrived at the Co-op.

The fact that the rice was stack burned when it left the Co-op is amply supported in the record and is substantially uncontradict-ed.

In order to exculpate itself from liability it became incumbent upon defendant to prove that the rice was damaged without any want of care on its part. Defendant has failed to execute this burden. A review of the pertinent facts reveals that the Co-op knew that the rice had an excessive moisture content at the time of acceptance. Furthermore, several witnesses testified that green rice could be dried properly if attended to immediately. Finally, the rice was stored for four days before any action was taken on the part of the Co-op. Even though the rice was stored in an aerated storage bin, which is supposed to reduce the chances of stack burning, the fact remains that the rice became stack burned without explanation while in the possession of the depositary. Looking to the totality of the circumstances we feel that the Co-op did not act as a prudent administrator in the handling of rice with an excessive moisture content.

Defendant argues in its brief that it should nevertheless be relieved of liability because there was a disclaimer of liability on the front of the receipts given to the plaintiffs for the rice. The receipts were introduced into evidence and contained the following phrase: “Not Responsible For Over 21% Moisture.”

Although the codal articles on deposit may be altered by special agreement between the depositor and depositary, actual notice of the modification must be given to the depositor. The Supreme Court stated in Colgin v. Security Storage & Van Co., 208 La. 173, 23 So.2d 36, 39, (1945):

“A contract is implied by law when the deposit is received. To modify the contract implied by law, the special provisions must be either a part of the original contract or contained in an amendatory contract. In order for the special provisions to be effective, the assent of both parties is necessary. One of the parties, without the consent of the other, cannot modify the implied contract. There must be a meeting of the minds of the parties to effectuate the special contract.”

See also, General Accident Fire & Life Assurance Co., Ltd. v. J. F. D. L., Inc., 148 So.2d 857 (La.App.4th Cir. 1963); Fidelity & Deposit Company of Maryland v. Rednour, 44 So.2d 215 (La.App. Orl. Cir. 1950). Comment, Bailment and Deposit in Louisiana, 35 La.L.Rev. 825, 838 (1975).

We cannot find that plaintiffs assented to the limiting phrase. Defendant argues that the receipts were given to plaintiffs’ drivers at the time the rice was deposited and that the drivers were plaintiffs’ agents. Thus, defendant concludes that they should be held to have acquiesced in the limitation. Defendant also argues that since Marceaux is a stockholder and participating member of the Co-op, he is bound by all of the rules and regulations of the Co-op. Therefore, he must have had knowledge of the limiting phrase. We find, however, that there was not an adequate showing of assent for us to give effect to the clause.

In Federal Insurance Company v. C & W Transfer and Storage Co., Inc., supra, a rug cleaner sought to assert a limitation of liability clause when the depositor’s goods were stolen from the depositary’s premises. When the rugs were picked up at the depositor’s home, a maid signed the contract limiting liability. The court refused to give the clause effect even though it determined that the maid was an agent of the depositor. The court stated:

“As provided by Article 3021 of our Civil Code a principal is bound by the agreements contracted by his agent con-formably to the power vested in the agent and, except insofar as he has expressly ratified the same, the principal is not bound for anything further. However, a third party who deals with an agent is required to determine whether or not the contract about to be consummated comes within the agency and will or will not bind the principal. And as between the principal and the third party who enters into a contract with the agent, the burden of showing the agent acted within the confines of his authority is upon the third party.” [footnotes omitted]

Guillot testified that he had done business with the Co-op on prior occasions and was completely unaware of the limitation of liability. We find that there was no evidence to indicate that Guillot actually acquiesced in the limitation.

As to Marceaux, the rules and regulations of the Co-op were not introduced into the record at trial. We therefore have no way of knowing what these rules contained and whether Marceaux had actual knowledge of the limitation. Consequently we cannot find that Marceaux acquiesced in the limitation.

For the above reasons we affirm the judgment of the District Court. All costs are to be assessed against the defendant-appellant.

AFFIRMED.

      . The moisture content of the eight loads, in order, were 21.5%, 21.5%, 22.0%, 21%, 22.0%, 23.4%, 23 + %, and 23 + %. It appears that the preferred maximum moisture content for harvesting and drying is 21%, although rice with higher moisture levels can be successfully dried.

      . Compare, however, Soileau v. Ville Platte Rice Driers, supra, in which this court affirmed the judgment of a trial court where similar demands of soy bean farmers for spoilage of their crop were rejected. In that case, the trial court found that the depositary had taken all reasonable steps to preserve the beans. In addition to their being an unduly high moisture content in the beans, the trial judge found that the beans were abnormally damaged and contained excessive foreign matter even before they were deposited. Although, in the instant case, the moisture content of the rice was not ideal, evidence indicates that it was not unduly excessive. Nothing in the record indicated that the rice was abnormal in any other respect.


author: GUIDRY, Judge.

text:
    Alma L. CLOUD, Plaintiff-Appellee, v. SECURITY GENERAL LIFE INSURANCE CO., Defendant-Appellant.
    No. 6166.
    Court of Appeal of Louisiana, Third Circuit.
    Nov. 17, 1977.

      Baggett, McClain & Morgan by Drew A. Ranier, Lake Charles, for defendant-appellant.
    Watson, Murchison, Crews & Arthur, William P. Crews, Jr., Natchitoches, for plaintiff-appellee.
    Before DOMENGEAUX, WATSON and GUIDRY, JJ.
   GUIDRY, Judge.

Plaintiff in this suit seeks to recover benefits allegedly due her as an insured under a major medical policy issued by defendant. Defendant admits issuance of the policy and that the medical and surgical expenses incurred exceeded the policy limits, i. e., $1500.00, but declined payment on the ground that plaintiff, in her application for such insurance, made certain material misrepresentations with intent to deceive the insurer, which alleged misrepresentations materially affected the risk assumed by the insurer. See LSA-R.S. 22:619(B). The trial court awarded plaintiff the full amount of benefits due under the policy and, additionally, penalties and attorney’s fees for the insurer’s failure to timely pay a claim arising under its policy. See LSA-R.S. 22:657. Defendant appeals. Plaintiff has answered the appeal and requests an increase in the amount of attorney’s fees awarded.

The attendant facts are not in dispute.

On September 6, 1974, Don Taylor, an agent for defendant, visited Alma Cloud and her husband, Dolton, at their residence in Goldonna, Louisiana. Taylor’s visit was in response to an inquiry from the Clouds indicating interest in securing a major medical policy advertised by defendant. At this meeting Taylor discussed with the Clouds their needs and recommended the purchase of a major medical policy. In due course, Taylor filled out the required application for insurance which was signed by Dolton Cloud. We digress at this point to observe that the procedure followed in completing the application was that Taylor posed questions to the Clouds and their responses were written on the application by Taylor. The entire application was filled out by Taylor and thereafter presented to Mr. Cloud with the suggestion that he “sign here and here and here”. Both Mr. and Mrs. Cloud testified with positivity that neither read nor handled the application. Their testimony in this regard is corroborated and uncontradicted.

On September 17, 1974, the policy was issued and has been continued in force since said date by the timely payment of premiums by the Clouds. The maximum amount payable under the terms of the policy is $1500.00.

On April 5, 1976, Alma Cloud was admitted to the P & S Hospital in Shreveport, Louisiana, for surgical repair of a hernia. The surgical and hospital expenses for this confinement exceeded the policy limits.

Following this hospital confinement Alma Cloud filed a claim under the aforesaid policy which was rejected. The reason given by defendant for rejection of Mrs. Cloud’s claim was an alleged material misrepresentation by the Clouds in their application for such insurance. Specifically, defendant alleges that the Clouds gave false answers to questions 10 and 11 on the application. Question 10 seeks information as to the number of hospital confinements “within the past 5 years” and the reason for such confinements. Question 11 seeks information concerning any disease of the circulatory system etc. It is not disputed that the answers to these questions, insofar as Alma Cloud is concerned, are not accurate. Mrs. Cloud suffered for many years from “Ray-naud’s disease”, a disease of the circulatory system, and within 5 years of the application, although more than one year before the application for insurance, Mrs. Cloud was hospitalized for a mild cerebral hemorrhage. Neither is mentioned on the application. In explanation of these material omissions from the insurance application both Mr. and Mrs. Cloud testified that Taylor made no inquiry with regard to Question 11 and with regard to Question 10 inquired only as to hospital confinements for a one year period immediately preceding the date of application. It is not disputed that all hospital confinements of both Mr. and Mrs. Cloud for the year preceding the application are accurately reported. This testimony of the Clouds is uncontradicted and is corroborated by a disinterested witness who was visiting in the home of the Clouds at the time the application was completed. Don Taylor, the agent who completed the application, was not summoned as a witness and did not testify.

It is clear from the record that defendant, after discovering the answers on the application were false, did not seek to determine if such answers resulted from misrepresentations by the Clouds with intent to deceive. In this regard Mr. Robert Miller, defendant’s vice-president and claims manager, testified as follows:

“Q. So you are not in a position to offer any evidence with reference to the accuracy or inaccuracy of the testimony of Mr. and Mrs. Cloud, regarding the conduct and actions of the agent at the time the application for insurance was taken by your company?
A. I can only base my decisions on the opportunity provided by the application and their certification that it was accurate.”

In rejecting defendant’s LSA-R.S. 22:619(B) defense the trial judge stated:

“This court finds that the insurer has not presented any proof, other than the application filled out by their agent, as to incorrect medical information. There is no proof that the Clouds intentionally sought to deceive the insurer.”

We conclude that the trial judge was eminently correct.

It is well settled that the acts of an insurance agent in filling out an application form falsely are the acts of his principal, the insurer, and they do not bind the innocent insured nor bar recovery by him or his beneficiaries. Fruge v. Woodmen of the World Life Insurance Society, 170 So.2d 539 (La.App. 3rd Cir. 1965); Morein v. American Physicians Insurance Company, 192 So.2d 887 (La.App. 3rd Cir. 1966).

In the recent case of Watson v. Life Insurance Company of Louisiana, 335 So.2d 518 (La.App. 1st Cir. 1976) our brethren of the First Circuit correctly set forth the criteria necessary for successful assertion by an insurer of a defense under LSA-R.S. 22:619(B):

“In order for the insurer to successfully urge LSA-R.S. 22:619(B) as a defense to recovery of the proceeds by the plaintiff-appellant, it must be proved that material misrepresentations were made fraudulently or with intent to deceive the insurer and that the misrepresentations materially affected the risk assumed by the insurer. Gay v. United Benefit Life Insurance Company, 233 La. 226, 96 So.2d 497 (1957); Reed v. American Casualty Company of Reading, Pennsylvania, 317 So.2d 648 (La.App. 1st Cir. 1975), writ refused, 320 So.2d 914 (1975); Parfait v. Minnesota Mutual Life Insurance Company, 311 So.2d 558 (La.App. 4th Cir. 1975), writ refused, 313 So.2d 847 (1975); Knight v. Jefferson Standard Life Insurance Company, 205 So.2d 485 (La.App. 1st Cir. 1967). Thus, the burden of proof is on the insurer to prove, in addition to the falsity of the statement made, the following two elements: (1) materiality and (2) intent to deceive. Stoma v. Prudential Insurance Company of America, 281 So.2d 871 (La.App. 3rd Cir. 1973).”

In the instant case defendant clearly failed to establish that the Clouds made any material misrepresentations or that they are at any time sought to deceive the insurer. Rather, the record amply supports the trial court’s finding that the false statements were the product of defendant’s agent and that defendant is bound thereby.

The trial court determined that plaintiff is entitled to penalties and attorney’s fees under LSA-R.S. 22:657(A). We agree with this conclusion and are pleased to adopt the learned trial judge’s reasons in support of such finding:

“Mrs. Cloud has asked for penalties, being the additional sum of $1,500.00, plus attorneys fees.
The record of evidence herein convinces this Court that any reasonable investigation of Mrs. Cloud’s claim by the insured would have disclosed that Mrs. Alma Cloud would be entitled to recover the benefits under this policy. No employee of defendant or independent adjuster made such a thorough investigation. The insurer took the position that the error placed in the application by their agent (who, according to the record of evidence, they did not consult) was proof sufficient to exercise their privilege to declare the major medical policy null and void as if never written.
L.R.S. 22:657(A) permits the assessment of penalties and attorneys fees unless the insurer’s refusal to pay the claim within 30 days is based on ‘just and reasonable grounds, such as would put a reasonable prudent businessman on guard, exist.’ The policy defense that there was misrepresentation this Court has held was without merit. The acts of their insurance agent in filling out the application form with incorrect data when the agent had been given the correct facts are the facts of his principal, the insurer. Other than relying on the application, the insurer made no effort to prove any misrepresentation by Mrs. Cloud.
The insurer failed to properly investigate and evaluate the legal and factual efficacy of its position and preferred to resist liability upon its technical and tenuous defense of misrepresentation. Such action on the insurer’s part renders it liable for the statutory penalties. See Morein v. American Physicians Ins. Co., 192 So.2d 887 (La.App. 3rd Cir. 1966).
This Court awards the penalty of 100% of the claim by Mrs. Cloud, or an additional $1,500.00,' plus $1,000.00 as attorney’s fees.”

The final issue concerns adequacy of the amount awarded as attorney’s fees. Although counsel for plaintiff strenuously argues that his fee should be increased substantially our examination of the record discloses no abuse of the trial court’s discretion in fixing such award. We do conclude, however, that plaintiff is entitled to an increase in the award as a result of services performed by her counsel on appeal. We believe that the sum of $250.00 for services on appeal is reasonable.

For the reasons assigned it is ordered that the judgment of the trial court be amended so as to increase the award of attorney’s fees from $1000.00 to $1250.00. Except as amended the judgment of the trial court is affirmed.

AMENDED AND AFFIRMED.