Case Name: DENNIS MILLER PEST CONTROLS, INC. v. Mrs. Germaine WELLS, d/b/a Arnaud's Restaurant
Court: Louisiana Court of Appeal
Jurisdiction: Louisiana
Decision Date: 1975-10-09
Citations: 320 So. 2d 590
Docket Number: No. 6735
Parties: DENNIS MILLER PEST CONTROLS, INC. v. Mrs. Germaine WELLS, d/b/a Arnaud’s Restaurant.
Judges: Before SAMUEL, REDMANN, STOU-LIG, SCHOTT and MORIAL, JJ.
Reporter: Southern Reporter, Second Series
Volume: 320
Pages: 590–597

Head Matter:
DENNIS MILLER PEST CONTROLS, INC. v. Mrs. Germaine WELLS, d/b/a Arnaud’s Restaurant.
No. 6735.
Court of Appeal of Louisiana, Fourth Circuit.
Oct. 9, 1975.
Rehearings Denied Nov. 11, 1975.
Writ Refused Jan. 7, 1976.
Richard K. Dimitry, Stephen C. Hartel, Jr., New Orleans, for plaintiff-appellee.
George J. Kambur, New Orleans, for defendant-appellant.
Before SAMUEL, REDMANN, STOU-LIG, SCHOTT and MORIAL, JJ.

Opinion:
STOULIG, Judge.
Plaintiff, Dennis Miller Pest Controls, Inc., obtained a judgment of $801, representing the balance due on a written contract for pest control service, plus 25-per-cent attorney fees on the award, against Arnaud's, Inc. Defendant has appealed urging, as it did in the trial court, that Karl Fuller, who allegedly signed as defendant's agent, had no authority to contract for defendant.
The agreement, dated March 19, 1973, stipulates plaintiff would provide extermination service on a monthly basis for a one-year period to three pieces of property owned either by defendant or its president, Mrs. Germaine Wells, for $89 per month. Signed by Fuller and plaintiff's president, Dennis Miller, the contract stated the property owner's refusal either to pay for or accept proffered services would constitute a breach and accelerate the balance of the payments due.
Plaintiff serviced the three buildings for several months and was paid each time the job was finished. Thereafter Mrs. Wells, without assigning a reason, refused to accept further service. What is at issue is the nature of the March 19 agreement and the capacity in which Fuller acted in connection with its execution. Plaintiff contends Mrs. Wells gave Fuller a verbal mandate to sign a contract binding defendant to accepting monthly service for a one-year term, while defendant insists either party could terminate the agreement at any time.
Dennis Miller testified that in response to a call from soneone connected with defendant he visited Mrs. Wells in her apartment on March 19, 1973 and discussed the terms of the disputed agreement in Fuller's presence. He informed Mrs. Wells this agreement would be the same as a prior arrangement under which plaintiff had provided extermination service for the three buildings. After Miller distributed mice poison in the apartment, he asked Mrs. Wells to execute the contract and she told him Fuller would sign it. Fuller signed the contract and also a receipt indicating the extermination work had been completed.
Mrs. Wells repudiated Miller's statement by denying ever meeting him much less discussing a contract with him or giving a verbal mandate in his presence. The trial judge resolved the credibility issue against her because Fuller, her steward, confirmed Miller's meeting with Mrs. Wells in her apartment. In fact, he testified he escorted Miller to the apartment.
However, Fuller stated he did not hear Mrs. Wells tell Miller that he was to sign the contract on her behalf. In fact Fuller insisted he had no authority whatsoever to enter into a contract. It is apparent from his testimony he does not understand the meaning of the term "contract"; therefore his testimony must be carefully weighed to determine the scope of the authority that Mrs. Wells conferred on him as her agent. He was questioned repeatedly as to what he had signed to determine if he was simply receipting for service performed on that day or if he was signing for plaintiff's service for an extended period of time on a monthly basis. His testimony was somewhat confusing and at one point the court asked: "What did you think you were signing ?" He answered: "I thought I was signing a little paper for him to come in and do the pest control every month."
In summary we accept the trial court's credibility finding that a contract was negotiated between Miller and Mrs. Wells and that she had given Fuller a verbal mandate to sign for her.
The evidence discloses that on March 19, 1973, Fuller executed two documents: the contract at issue, and an acknowledgment of the pest control service rendered by plaintiff. He admitted that one of the documents was a written authorization for plaintiff to perform extermination service in the future, i. e. a contract. If, as Fuller testified, Mrs. Wells did not authorize him to sign these documents and further that he never signed anything for the defendant unless expressly authorized to do so in each and every instance, he failed to state by whose authority he acted in this matter in signing these documents.
Defendant argues that if the testimony to this effect is accepted, the record still fails to support the agency by competent evidence. It correctly points out that C.C. art. 2992 (which permits a verbal mandate) stipulates the proof of the agency must conform to rules set forth in the Civil Code section "Of Conventional Obligations".
The only article dealing with testimonial proof of contracts is C.C. art. 2277 that provides, inter alia, verbal contracts for the payment of money in excess of $500 must be established by the testimony of one credible witness and other corroborating circumstances. In Gardes v. Schroeder & Schreiber, 17 La.Ann. 142 (1865), the Supreme Court held that a verbal power of attorney conferred for executing a contract in excess of $500 must be established by the same evidence as would be required for a verbal contract in excess of that amount.
While we agree with defendant's position that plaintiff must establish the verbal power of attorney by the testimony of one credible witness and other corroborating circumstances, we cannot conclude it did not sustain its burden of proof. The credible witness is Miller and the corroborating circumstance is the testimony of Fuller to the effect that he was signing a paper to let plaintiff come in every month to do pest control work and that he never signed for anything for defendant without specific authorization. The corroborating circumstances contemplated by C.C. art. 2277 can be the testimony of a second witness. We therefore conclude that Fuller was acting as the agent of the defendant in executing the pest control contract.
Though not raised as an issue in either the briefs or oral arguments of counsel, the dissenting opinion, while acknowledging that the defendant did breach the pest control agreement, suggests the trial court erred in awarding plaintiff the penalties and attorney fees stipulated in the written contract. Such a result can only obtain upon a finding that defendant had no knowledge of the liquidated damage clause and that the agent exceeded his authority in signing the contract with such provisions, or that the amount of the stipulated damages are so exorbitant as to be unconscionable and will not, for equitable consideration, be invoked. In effect the dissenting opinion while admitting the breach would permit the defendant to do so with total impunity.
A resolution of this issue requires a reiteration of the established law, jurisprudential and statutory, governing the right of persons to contract. In general, parties may contract under such terms and conditions, not in contravention of statutory law or contrary to public policy, as may be mutually agreed upon. Such agreements have the effect of law between the parties governing its subject matter and cannot be repudiated for economic or imprudent reasons. McNeely v. Baron Construction Co., 261 So.2d 333 (La.App. 4th Cir. 1972); C.C. art. 1945. Penal clauses (liquidated damages and attorney fees) are the proper subject matter of contractual agreement. C.C. art. 2117 et seq. Unequal or unilateral contingent penalties imposed for the breach of contract are not contrary to public policy, prohibited by law, or void for the want of mutuality. Wendel v. Dixon Real Estate Company, 232 So.2d 791 (La.App. 4th Cir. 1970); C. C. art. 2122. Though a contract be silent on the assessment of liquidated damages against one of the contracting parties, the opposite party is not precluded from recovering such damages as are authorized by the Civil Code and which are occasioned by the former's breach of the agreement.
To dispose of the issue of the enforceability of the penal clauses we must determine if defendant had, or is charged with, the knowledge of the penal provisions, if the agent exceeded his authority and if the stipulated amount is unreasonable.
At the outset it should be noted the testimony of the president of plaintiff corporation — that he offered a copy of the contract to Mrs. Wells for her acceptance and signature and was advised by her that Fuller would sign it — was accepted by the trial judge and was a credibility determination. Thus the opportunity afforded Mrs. Wells to learn the full details of the contract and her mandate to Fuller to sign on her behalf were so concomitant and contemporaneous that they will be treated together.
C.C. art. 2995 differentiates between a restricted as opposed to an unlimited power of attorney. It states:
"It may vest an indefinite power to do whatever may appear conducive to the interest of the principal, or it may restrict the power given to the doing of what is specified in the procuration."
In this case Mrs. Wells gave her steward Fuller unlimited discretion in signing the contract and approving any terms contained in it when she declined Miller's offer to view it and indicated Fuller would sign for her. Thus, even though the record contains no evidence that she specifically agreed to the acceleration clause or the attorney fees in the event of a breach, her conferring on Fuller the power to act in her behalf without limitation in this transaction binds her to the terms of the contract signed by her agent. Defendant cannot now be heard to deny that she had knowledge of, or consented to, the penalty provision and attorney fees any more than she could have asseretd such a defense if she had signed the contract without reading it.
Under the penalty provisions of the contract, plaintiff is given the option to accelerate all unpaid amounts due for the remainder of the contract year dating from the occurrence of the breach together with reasonable attorney fees. The liquidated damages are only the balance of the proceeds due under the contract, an amount defendant had initially obligated itself to pay for plaintiff's service, the performance of which it prevented by the breach. It cannot validly be maintained that plaintiff is only entitled to the loss of the profit it would have derived from the contract had it not been breached in view of the mutually agreed upon provisions stipulating the amount to be awarded in the event of such an occurrence. Nor can it be said that the stipulated amount is so unreasonable and out of proportion to the total consideration of the contract that its enforcement would be unconscionable.
For the reasons assigned, the judgment appealed from is affirmed. Defendant Ar-naud's, Inc., is to pay all cost of this litigation.
Affirmed and rendered.
. Several persons and business entities were cited as defendants; however, it was stipulated at the trial Arnaud's, Inc., was the proper defendant. Plaintiff by supplemental petition sought in the alternative to hold Fuller individually liable should the court determine he was not acting as defendant's agent. The judgment of the trial court did not dispose of the alternative pleading nor was issue joined either by answer or default. Plaintiff did not appeal this issue.
. The contract provides in part:
"Failure or refusal of the owner to allow the Contractor access to the aforesaid premises or failure to make any payment when due shall constitute a breach hereof and, at the option of the Contractor and without the necessity of tendering further service, shall accelerate maturity of all amounts then remaining due and unpaid for the contract year then running."
. See Comment, 23 Tul.L.Rev. 242, 244, dealing with "Construction of Powers of Attorney in Louisiana."
. Rogers v. Barton, 264 So.2d 715 (La.App. 1st Cir. 1972).