author: TATE, Justice. DENNIS, Justice, SANDERS, Chief Justice

text:
    STATE of Louisiana, Appellee, v. John G. FRENTZ, Appellant.
    No. 60089.
    Supreme Court of Louisiana.
    Jan. 30, 1978.

      F. Irvin Dymond, New Orleans, for defendant-appellant.
    William J. Guste, Jr., Atty. Gen., Barbara Rutledge, Asst. Atty. Gen., Harry F. Con-nick, Dist. Atty., Louise Korns, Asst. Dist. Atty., for plaintiff-appellee.
   TATE, Justice.

The defendant Frentz was convicted of aggravated crime against nature with a person under seventeen years of age. La. R.S. 14:89.1(5). He was sentenced to ten years’ imprisonment.

On the defendant’s appeal, we find that the conviction must be reversed: prejudicial evidence was improperly admitted as to (1) unnatural sexual acts committed with other persons than those with the person specified by the bill of information (Assignment 4); and as to (2) the defendant’s alleged reputation as a homosexual (Assignment 14).

1. Other-crime Evidence.

The defendant is charged with unnatural oral sexual relations with David D., a 15-year-old boy, during June of 1974. Over defense objection, the state introduced testimony by Ronald S. and John S., then sixteen, that the accused had committed similar sex acts with them at the same place and during approximately the same period.

Pursuant to pre-trial Prieur notice, the state sought to justify introduction of evidence as to these similar acts for the purpose of showing “system” in aid of proof of guilty knowledge and intent. La.R.S. 15:445, 446. As the defendant correctly contends, however, the trial court erred in admitting them for such purpose.

The victim (David D.) testified that the defendant, his teacher, had committed unnatural oral sex acts upon his person at the teacher’s home. Two young boys testified on behalf of the state that they witnessed at least one of these acts. The defendant, admitting that David D. had come to his house (to do some housecleaning, he testified), denied the acts, and claimed that the opposing testimony arose from disciplinary or other differences between the witnesses and himself.

The offense of crime against nature is committed by unnatural carnal copulation through use of the genital organ of one of the participants. La.R.S. 14:89, 89.1. Proof of the act itself is proof both of the crime and of the general criminal intent, La.R.S. 14:10(2), alone required. Perkins on Criminal Law 389-92 (2d ed., 1969); Clark and Marshall, Treatise on the Law of Crimes, Section 11.07 (7th ed., 1967).

Evidence of other crimes, therefore, is not admissible to prove criminal intent. State v. Williams, 352 So.2d 1295 (La.1977); State v. Clark, 338 So.2d 690 (La.1976); State v. Moore, 278 So.2d 781 (La.1973). Nor does this case present facts where the accused admits the act but asserts some innocent explanation for it; so that, therefore, his guilty knowledge presents an issue, as to which other-crime evidence may become admissible. State v. Frederick, 340 So.2d 1353 (La.1976).

On appeal, the state contends that, at the least, the evidence of the other acts was admissible to prove “system.” However, system was not relevant to prove any fact of consequence actually at issue herein (e. g., identity). Where system is not relevant for such purpose, the state is not permitted to prove other crimes in the guise of proving “system” — for the sole purpose of such evidence is, then, a prohibited one of inferring the defendant’s guilt of the present crime (for which alone he is on trial) simply because he is a bad man who had committed similar crimes in the past. State v. Jackson, 352 So.2d 195 (La.1977).

As we stated in State v. Ledet, 345 So.2d 474, 479 (La.1977): “* * * proof of system simply is not relevant in a case such as this one where there is absolutely no question that the accused was the person involved in both incidents. The entire point of the state’s establishing that a ‘system’ existed is to show that because of the unique aspects of an extraneous crime committed by the accused that he must have been the perpetrator of the crime at issue because it, too, was marked by the same distinctive hallmarks. However, when there is no contest at all over the participation of the accused in the alleged incident, but the only question is whether any crime at all took place, evidence of extraneous offenses serves only to establish that defendant is capable of and thus likely to have committed the crime in question, and as such the evidence is inadmissible.”

2. Improper Proof of “Reputation”

Assignment 14 involves the introduction of improper evidence concerning the accused’s alleged reputation as a homosexual. Before discussing this assignment’s particulars, we deem it advisable to summarize some general rules governing introduction of evidence as to character or reputation of an accused or of a witness.

Testimony as to “character” (reputation) may be admissible for two distinct purposes, with differing rules and reasons:

(1) The credibility of a witness may be attacked “by showing that his general reputation for truth or for moral character is bad.” La.R.S. 15:490. In that event, “the inquiry must be limited to general reputation, and can not go into particular acts, vices or courses of conduct.” La.R.S. 15:491. If the accused takes the stand, he places his credibility at issue, and his credibility may then be attacked in the same manner, with the same limitations, as in the case of any other witness. La.R.S. 15:462, 486. The inquiry is, in this case, limited to general reputation for truth and character with regard to veracity; and the defendant may not advance affirmative proof of this character unless the state has, by cross-examination or otherwise, placed his reputation for credibility at issue.

See: State v. Muse, 319 So.2d 920 (La.1975), discussed at 37 La.L.Rev. 589-90 (1970); McCormick on Evidence, Section 44 (2d ed. 1972); cf., Pugh, Louisiana Evidence Law 22-23 (1974).

(2) The accused may also introduce evidence of his character to show he is not the type of person who would commit the particular crime charged; until he does so, his character (reputation) is not at issue; but, if he does so, the state may introduce rebutting reputation testimony only as to the aspects of reputation put at issue by the accused. La.R.S. 15:479, 480. The character evidence is limited to “the general reputation that a man has among his neighbors, not upon what particular persons think of him.” La.R.S. 15:479. The accused’s introduction of evidence for such purpose “must be restricted to showing character as to such moral qualities as have pertinence to the crime with which he is charged.” La. R.S. 15:480.

See: State v. Kelly, 237 La. 991, 112 So.2d 687 (1959); Michelson v. United States, 335 U.S. 469, 69 S.Ct. 213, 93 L.Ed. 168 (1948) (leading case); Pugh, Louisiana Evidence Law 22-23 (1974); McCormick on Evidence, Section 191 (2d ed., 1972).

In the present instance, the defense introduced character witnesses as to the accused’s reputation for “truthfulness, veracity, morality and character.” Although couched in the terms common to credibility reputation (see 1 above, also State v. Kelly, therewith cited), both defense and state assumed the testimony had to do with moral qualities pertinent to the particular crime charged (see 2 above). If so, the state was entitled to introduce rebuttal evidence and to conduct cross-examination as to the accused’s reputation for homosexual inclinations and activities.

Accordingly, the state on rebuttal offered the testimony of Officer Latapie for the purpose of testifying to the accused’s reputation in the community, to the extent he was aware of it. The defendant offered both a general objection to any police officers testifying (since they were not members of the community), Tr. 267, and also a specific objection that this particular police officer could not summarize the testimony of the only person in the academic community he had spoken to concerning that one person’s view of the accused’s reputation in such community, Tr. 27L-72.

The officer was then permitted to testify as to his (unnamed) academic informant’s impression “that it was the general consensus of the teachers at Colton [the school the accused taught at], if you want me to use slang expressions, that the defendant was ‘fruit’ [i. e., homosexual]. How he never got caught, he didn’t know. He said he did it in the open, or what appeared to be in the open.”

The police witness did not know how long his teacher-informant had been at Colton. Upon state objection that the name of the informant was irrelevant, the defense was not even permitted to ascertain the informant’s identity.

The ruling admitting the police officer’s testimony was clearly erroneous. The teacher-informant’s testimony as to the accused’s homosexual reputation may have been admissible under accepted theory, even though such opinion was based on hearsay. Nevertheless, for the reasons noted below, the police officer’s hearsay testimony of the informant’s reputation-opinion was inadmissible. It should have been excluded upon the accused’s objection.

The reasons for admissibility of reputation evidence based solely upon “opinion-based-on-hearsay testimony” are complex and historical. See Michelson v. United States, cited above, at 335 U.S. 477-78, 69 S.Ct. 213, 219. For these historical reasons, the hearsay-based testimony by the reputation witness himself is “allowed to summarize what he has heard in the community, although much of it may have been said by persons less qualified to judge than himself. The evidence which the law permits is not as to the personality of defendant but only as to the shadow his daily life has cast in his neighborhood.

“This has been well described in a different connection as ‘the slow growth of months and years, the resultant picture of forgotten incidents, passing events, habitual and daily conduct, presumably honest because disinterested, and safer to be trusted because prone to suspect. * * * It is for that reason that such general repute is permitted to be proven. It sums up a multitude of trivial details. It compacts into the brief phrase of a verdict the teaching of many incidents and the conduct of years. It is the average intelligence drawing its conclusion.’ ”

However, as this decision notes (in accordance with all reported authority), the reputation-witness himself “must qualify to give an opinion by showing such acquaintance with the defendant, the community in which he has lived and the circles in which he has moved, as to speak with authority of the terms in which generally he is regarded.” 335 U.S. 478, 69 S.Ct. 219. See also 2 Marr, Criminal Jurisprudence of Louisiana, Section 646 (1923).

Reputation (character) testimony is the opinion (formed on hearsay it is true) by a member of the community exposed over an extended period of time to hearing the discussion (or lack of it) by other members of the community shared by himself and the person whose reputation is at issue.

Before being permitted to testify, the reputation-witness must be shown to be qualified to testify on the subject as a member of the community in a position to speak with authority on the subject. After testifying, the credibility of this reputation-witness is subject to attack, as is that of any other witness, as to bias or interest, La.R.S. 15:492, reputation for credibility, La.R.S. 15:491, or prior contradictory statements, La.R.S. 15:493, 497, and insofar as he may have been convicted of a crime, La.R.S. 15:495, for examples.

Here, however, a police officer testified as to what an anonymous member of the community had informed him was the accused’s community reputation. The police officer himself was not testifying from personal knowledge as a member of the community, and the reputation evidence was inadmissible for this reason.

Perhaps a more important reason for its inadmissibility is that the defendant was deprived of his right to contest the qualifications or credibility of the community-member informant, whose opinion as to the accused’s alleged community reputation was asserted by the police officer who alone testified. Hearsay evidence as to the reputation-opinion-testimony of others is inadmissible. State v. Chapman, 251 La. 1089, 208 So.2d 686 (1968) (where the trial court ex proprio motu refused to receive such evidence when offered by the defendant, even without state objection, and this court affirmed).

Decree

For the reasons assigned, therefore, we reverse the conviction and sentence, and we remand this ease for a new trial in accordance with law.

REVERSED AND REMANDED.

DENNIS, J., concurs and assigns reasons.

SANDERS, C. J., dissents with written reasons.

SUMMERS and MARCUS, JJ., dissent.

DENNIS, Justice,

concurring.

I agree that the other crimes evidence was inadmissible to prove that a crime occurred in this case. Moreover, I think the State is mistaken in attempting to classify it as evidence of a “system.” Instead, it appears to be more in the nature of “signature” crime evidence. The distinction is important because evidence of “system” can be admissible to show the doing of the criminal act, as well as the identity of the actor, and his intention, where any of these is in dispute. McCormick, Law of Evidence, p. 328 (1954).

I fully agree with the majority opinion’s discussion of improper proof of “reputation.”

SANDERS, Chief Justice

(dissenting).

John G. Frentz was charged with an aggravated crime against nature with a person under the age of seventeen years. LSA-R.S. 14:89.1(5). After a jury trial, defendant was found guilty as charged. The trial judge sentenced him to ten years imprisonment. The majority reverses the conviction, holding that evidence of other crimes of the same nature was erroneously admitted. I disagree.

The pertinent assignment of error is number four. In brief, defendant argues that this assignment was reserved to the ruling which allowed the State to introduce evidence of other similar offenses as proof of defendant’s intent to commit the crime charged.

Defendant’s allegation is erroneous. The State gave notice that it intended to introduce evidence of other similar offenses, and the trial court ruled that the State could introduce this evidence to show system on the part of the accused under LSA-R.S. 15:445 and 15:446.

The evidence consisted of the testimony of two young men who testified that they each had had unnatural sexual relations with the defendant about the same time, at the same place, and under similar conditions as did the victim. Each of the young men also testified that he had seen the defendant have unnatural sexual relations with the male juvenile victim in the present case.

One of the juveniles testified that he was sixteen in June of 1974 and that he was a classmate of the victim at the school where defendant was an assistant principal. He testified that he had been to the defendant’s home on several occasions before and after school, and that he had been in defendant’s home when the victim was present. He further testified that on one occasion he had seen the defendant and the victim performing sexual acts together. He testified that he had also engaged in similar sexual activity with the defendant, and that like the victim, was asked to defendant’s home to do some repair work and was seduced in the same manner as the victim.

Likewise, the other juvenile testified that he had lived in the defendant’s home for about a year; that he knew the victim and the other juvenile to be students at the school at which defendant worked; that he had observed sexual activity between the defendant and victim; and that he, himself, had engaged in such activity with the defendant. The testimony of the three youthful victims was closely interwoven.

I agree with the trial court’s ruling that the testimony was admissible to show the system used by defendant to seduce the young students. In State v. Prieur, La., 277 So.2d 126 (1973), we held that other acts by the accused which are of a like nature as the crime charged, and which exhibit like methods, plans of operation, or the same modus operandi, are admissible to show system. See also State v. Spencer, 257 La. 672, 243 So.2d 793 (1971); State v. Montegut, 257 La. 665, 243 So.2d 791 (1971).

Here, two of the juveniles — one of which is the victim — were students at the school at which defendant was assistant principal. During the spring and summer of 1974, both boys were asked by defendant to come to his home after school to do repair work, and both were then seduced by defendant in the same manner. The third juvenile was present in the house, identified the students who visited there, and otherwise corroborated their testimony.

In State v. Jackson, La., 352 So.2d 195, 196 (1977), the Court stated:

“This court has held to be admissible, for limited purposes, proof of other crimes exhibiting almost the identical mo-dus operandi or system, committed in close proximity in time and place. State v. Jones, 332 So.2d 466 (La.1976) (a pre-Prieur trial); State v. Price, 325 So.2d 780 (La.1976); State v. Vince, 305 So.2d 916 (La.1974); State v. Lawrence, 294 So.2d 476 (La.1974).
“As the jurisprudence has clarified, the other crime must be distinctively similar in system, State v. Slayton, 338 So.2d 694 (La.1976), State v. Waddles, 336 So.2d 810 (La.1976), State v. Hicks, 301 So.2d 357 (La.1974)—i. e., ‘so peculiarly distinctive that one must logically say that they [the two crimes] are the work of the same person,’ State v. Lee, 340 So.2d 1339, 1345 (concurring opinion of Mr. Justice Dennis) (La.1976). Furthermore, the proof of the other crime as part of the system must be relevant to prove a fact of consequence to the accused’s present innocence or guilt (independent of the inadmissible purpose to infer that the accused committed the present crime because he had committed the other one). State v. Ledet, 345 So.2d 474 (La.1977); State v. Frederick, 340 So.2d 1353 (La.1976); State v. Gaines, 340 So.2d 1294 (La.1977); State v. Hicks, 301 So.2d 357 (La.1974); State v. Harrison, 291 So.2d 782 (La.1974).
“Of course, as the cited decisions emphasize, not only must the other-crime evidence first be found relevant to a material fact actually at issue, but the probative value must outweigh its prejudicial effect. See State v. Ledet, 345 So.2d 474 (La.1977). In emphasizing the limited purposes for which other-crime evidence may be used, and the limitations upon its use even for such purposes, Le-det summarizes the governing values in the exercise of the trial judge’s limited discretion to admit it, 345 So.2d 478:
‘ * * * Because of the substantial risk that the extraneous evidence may detract from the constitutional right to be presumed innocent until proven guilty beyond a reasonable doubt of the crime charged, other crimes can only be admitted after a “showing by the State that the evidence of other crimes is not merely repetitive and cumulative, is not a subterfuge for depicting the defendant’s bad behavior, and that it serves the actual purpose for which offered.” ’ ”

Under the principles stated, the trial judge properly admitted the testimony. The weight of authority throughout the country supports an affirmance of the conviction. State v. Alford, 206 La. 100, 18 So.2d 666 (1944); People v. Davis, 46 Mich.App. 80, 207 N.W.2d 419 (1973); Andrews v. State, 172 So.2d 505 (Fla.App., 1965); State v. Harmon, 107 Ohio App. 268, 158 N.E.2d 406 (1958); State v. Gellerman, 42 Wash.2d 742, 259 P.2d 371 (1953); Annotation, 77 A.L.R.2d 841 (1961 and Later Case Service 1975); 22A C.J.S. Criminal Law § 691(39), p. 897; 70 Am.Jur.2d, Sodomy, § 21, p. 823.

For the reasons assigned, I respectfully dissent.

      . Although the state contends otherwise, we think in context that the accused sufficiently stated the grounds for his objection, albeit somewhat inarticulately, so as to preserve for appellate review the error complained of.

      . The decision continues, 335 U.S. 478, 69 S.Ct. 219-20: “To require affirmative knowledge of the reputation may seem inconsistent with the latitude given to the witness to testify when all he can say of the reputation is that he has ‘heard nothing against the defendant.’ This is permitted upon assumption that, if no ill is reported of one, his reputation must be good. But this answer is accepted only from a witness whose knowledge of defendant’s habitat and surroundings is intimate enough so that his failure to hear of any relevant ill repute is an assurance that no ugly rumors were about.”
      An earlier ruling in the present case (Assignment 7) in violation of this principle enhanced the prejudice caused by the present erroneous admission (Assignment 14) of the anonymous informant’s view. The latter was not established as based on membership in the Colton academic community for any length of time, but was nevertheless permitted to assert (through the police officer) the accused’s homosexual reputation. An assistant principal of the school (who had worked with the accused for an extended period of time) was not permitted earlier to testify as a character witness because he had never heard the accused’s reputation discussed. Tr. 140-41 (Assignment 7). As stated in State v. Emory, 151 La. 152, 153, 91 So. 659, 660 (1922), in requiring an instruction to such effect: “The best evidence of good reputation is where the witness testifies that he has never heard it discussed, questioned, or talked about. The more unsullied and exalted the character is, the less likely is it ever to be called into question.”
      This is the view of virtually all courts and of all textwriters. 5 Wigmore on Evidence, Section 1614 (Chadboum rev., 1974), citing (in addition to those from England and the United States) the Louisiana decisions of Emory, State v. Ciaccio, 163 La. 563, 112 So. 486 (1927) and State v. Pace, 183 La. 838, 165 So. 6 (1936). See also: Pugh, Louisiana Evidence Law 24-27 (1974) and 2 Marr, Criminal Jurisprudence of Louisiana, Section 646 (1923).
      The state’s objection to reputation evidence of this character was apparently foúnded upon erroneous expressions to the contrary in State v. Howard, 230 La. 327, 88 So.2d 387 (1956), by way of dicta. As a matter of fact, the better view expressed by all textwriters is that the reputation-witness should not only be permitted to testify that he had never heard the accused’s reputation discussed, but also his own opinion that therefore, in his opinion, the accused’s community reputation was good.


source: Caselaw Access Project

author: DENNIS, Justice. CALOGERO, Justice

license: Public Domain

text:
    SUGAR BOWL GAS CORPORATION v. LOUISIANA PUBLIC SERVICE COMMISSION.
    No. 60144.
    Supreme Court of Louisiana.
    Jan. 30, 1978.

      Gene W. Lafitte, John M. Wilson, George J. Domas, Liskow & Lewis, New Orleans, for plaintiff-appellee.
    Marshall B. Brinkley, Gen. Counsel, Louisiana Public Service Com’n, Baton Rouge, for defendant-appellant.
   DENNIS, Justice.

This appeal is yet another repercussion of the national gas shortage. The issue presented is whether the Louisiana Public Service Commission (Commission) properly reduced rates within its jurisdiction charged to several municipalities by a gas pipeline company for the purpose of removing prejudicial effects caused by the company’s sale of gas to industries at prices below cost under long term contracts, which are not within the statutory jurisdiction of the Commission.

Respondent Sugar Bowl Gas Corporation (Sugar Bowl) distributes natural gas in south Louisiana. For many years it has purchased gas from producers for resale to industries, municipalities and residents. In the 1960’s Sugar Bowl entered long term contracts with several of its industrial customers whereby it agreed to supply large volumes of gas at fixod prices. Prior to 1972 Sugar Bowl also sold gas to several municipalities and publicly owned distributing systems under contract. However, in 1971-2, the Public Service Commission abrogated the cities’ contracts with Sugar Bowl and ordered it to supply gas to them at a rate consisting of its average cost of gas purchased each month plus an additional charge for cost of service and return on investment.

Sugar Bowl is one of three intrastate natural gas common carrier pipelines whose rates and services are partially regulated by the Commission. The vast majority of the gas distributed by these pipelines is sold directly to industrial customers under contract, and this part of the pipelines’ activities is statutorily exempt from regulation by the Commission. La.R.S. 45:301-303. Because the unregulated rates charged industries by the pipelines remained anchored by long term contracts while the rates fixed by the Commission rose sharply with the average cost of gas in response to the energy shortage, some of the municipally owned distributing systems complained to the Commission of discrimination and inequitable treatment.

On September 15, 1976, the Commission ordered Sugar Bowl to show cause why it should not be required to reduce rates charged the municipalities of Donaldson-ville, Plaquemine and White Castle (cities) to a level equivalent to the average rate charged in sales to its industrial customers. Hearings were conducted in which witnesses testified for the company, the cities, and other consumers. Sugar Bowl furnished, upon the Commission’s request, information regarding the prices and quantities of gas purchased and sold by it during various periods.

After completion of the hearings, the Commission, acting under La.R.S. 45:303, by order dated February 16, 1977, found that Sugar Bowl’s long term contracts with industries resulted in prejudicial effects on rates charged the cities. To remove the prejudicial effects it ordered a reduction in rates by requiring the company to charge each of the cities, for a volume of gas equal to the amount consumed by that city during the year preceding April, 1972, on the basis of Sugar Bowl’s average cost of gas under pre-April 1972 purchase contracts. For any additional gas taken by the cities in excess of pre-1972 usage Sugar Bowl was ordered to charge them on the basis of the average cost of gas purchased under supply contracts entered subsequent to April, 1972. The total charge, however, could not exceed the overall average price for gas paid by Sugar Bowl for the gas purchased during this billing period. In simple terms, the order has the effect of dedicating to the cities, up to the volumes they used prior to April, 1972, Sugar Bowl’s “old gas” which will be acquired at lower costs under the older supply contracts.

On Sugar Bowl’s appeal, the district court issued a preliminary injunction suspending the Commission’s order pending a hearing on the permanent injunction and the merits of the appeal. In its written reasons, the district court found that implementation of the order would cause Sugar Bowl irreparable injury. Although the district court did not single out any error of law or unreasonable factual determination by the Commission, it stated that the rising cost of gas did not create a presumption that industrial sales were prejudicial to the rates charged the cities. The Commission appealed. For the reasons hereinafter stated we affirm.

The Commission’s opinion in the instant case included factual' findings which we summarize as follows: In the 1960’s there was a surplus of natural gas and the long term industrial contracts were consummated by Sugar Bowl on the assumption that adequate supplies would be available through the term of the contract at profitable rates. However, Sugar Bowl’s average cost of gas is now approximately six times greater than the price it receives in some of its non-jurisdictional sales. The average cost of gas of all three intrastate gas pipelines regulated by the Commission has increased markedly, but from April, 1972 to September, 1976 Sugar Bowl’s average cost increased approximately one-third more than the other pipelines. Sugar Bowl presently purchases annually about 40 million MCF of gas under pre-April 1972 contracts at a weighted average price of 93.2 cents per MCF. Annually it buys approximately 46.8 million MCF of gas under newer supply contracts at a weighted average of $1,515 per MCF. Annual deliveries to the cities total only about 4.1 million MCF, a volume approximately equal to Vioth of the gas purchased by Sugar Bowl from the pre-1972 contracted reserves. An audit conducted in 1975 revealed that all of Sugar Bowl’s jurisdictional gas sales accounted for about 5V2% of the volumes sold but produced approximately 8A% of the revenues. Contracted reserves of gas available to Sugar Bowl through 1981, the expiration date of some of the industrial contracts, amount to 339 billion cubic feet. However, the company has contract commitments to deliver 399 billion cubic feet during this period. Approximately 60.8% of the contracted reserves is considered controlled by corporations affiliated with Sugar Bowl, which is a wholly owned subsidiary of Allied Chemical Corporation.

From these factual determinations the Commission reached conclusions, which we paraphrase as follows: Sugar Bowl purchased gas after 1972 at substantially higher prices than the other intrastate pipelines. The company’s long-term contracts with industries which now require delivery of gas from inadequate reserves for prices substantially less than acquisition costs results in prejudice to the rates charged the cities. The jurisdictional customers should not bear the full impact of the acquisition prices for new gas purchased primarily to fulfill industrial contract commitments when prior contracted reserves were adequate to meet jurisdictional requirements.

The first question before us is whether the Commission correctly apprehended the ambit of authority granted to it by La.R.S. 45:303. The pertinent part of the statute provides that the Commission, upon finding that “any particular direct industrial sale” is “prejudicial” to regulated rates, may order such adjustment of the rates “as may be necessary to remove the prejudicial effect of such direct industrial sale.” By this enactment the legislature, in our opinion, intended to grant the Commission the authority to revise a regulated rate to offset the effects of an undue preference or undue discrimination by a pipeline company in a direct industrial sale. The term “prejudicial” implies injury received due to inequality or partiality. The preceding paragraph of the statute authorizes the Commission to make adjustments in the purchase price of gas considered for rate-making purposes if the acquisition was not “pursuant to arm’s-length contract.” Thus, both paragraphs seem intended to empower the Commission to make adjustments to protect ratepayers from the effects of unjust preferences and discrimination. The redactors’ cross reference and the similarities of purpose suggest that the legislature modeled these provisions of La. R.S. 45:303 on Sections 4 and 5 of the Federal Natural Gas Act of 1938, which prohibits “any undue preference or advantage” and “any undue prejudice or disadvantage” in rates and which authorizes the Federal Power Commission to correct any “unduly discriminatory, or preferential” rate. A cursory survey of treatise writers indicates that prevention of discrimination has been a vital regulatory function since the advent of federal and state statutes dealing with “natural monopolies,” and that the Louisiana statute is couched in typical language. 1 Priest, Principles of Public Utility Regulation, 285 et seq. (1969), [hereinafter referred to as Priest]; Bon-bright, Principles of Public Utility Rates, 369 (1961) [hereinafter referred to as Bon-bright]. Accordingly, we conclude that the Commission correctly decided that it has the authority to adjust regulated rates to compensate for any prejudice caused to such rates by a difference between them and particular direct industrial sale rates which is unduly discriminatory or preferential.

Nevertheless, it appears that the Commission has improperly exercised its authority in this case. The record before us reflects that the Commission did not consider all of the factors necessary to a sound determination that undue discrimination exists between the rates in question. Assuming undue rate discrimination to be a fact, it also does not appear that the Commission proceeded reasonably and prudently in making its adjustment to remove undue discrimination from the rates.

There appears to be unanimity for the proposition that, because absolute equality between classes of service is not a practical possibility, a mere difference in rates, in itself, does not constitute undue or unlawful discrimination. It is axiomatic that discrimination banned as unjust or undue involves preference under substantially similar circumstances or conditions. Different treatment for different classes of customers who have been reasonably classified is not unlawful, although the variations in service or conditions must be substantial to justify differences. In other words, it is only an unreasonable difference in rates between customers or classes of customers that is unlawfully discriminatory. This Court has recognized, in a municipal water utility case, that rate discrimination is objectionable when it “strikes an unfair balance between those in like circumstances having equal rights and privileges.”

Although these principles were evolved in cases dealing with rates and services fully subject to regulatory jurisdiction, La.R.S. 45:303 evinces a legislative intention that they should also be applied in determining whether a gas pipeline company has granted an unduly preferential or discriminatory non-regulated rate by contract. The Federal Power Act, an enactment similar to the Natural Gas Act, which apparently codifies these principles by providing a remedy for “unduly discriminatory or preferential” rates or contracts, empowers the Federal Power Commission to consider them in determining whether a utility’s unregulated transactions have any prejudicial effects upon the jurisdictional rate structure. The Supreme Court has stated, in a somewhat similar context, that where a public utility has agreed by contract to a rate affording it less than a fair rate of return, the proper concern of the Federal Power Commission is not whether to relieve it of its improvident bargain but to determine “whether the rate is so low as to adversely affect the public interest — as where it might impair the financial ability of the public utility to continue its service, cast upon other consumers an excessive burden, or be unduly discriminatory.” Similarly, the Louisiana Public Service Commission is not authorized to abrogate or modify a pipeline company’s direct industrial sale contract under La.R.S. 45:303, but it is fully empowered to protect the public interest by adjusting regulated rates to remove the prejudicial effects caused by a contractual rate that is unduly discriminatory.

In exercising this authority, the Commission should consider carefully whether the circumstances, rights and privileges of the parties are sufficiently similar to make the distinction in rates an “undue” one. For example, if one rate was established in good faith by an arm’s-length contract, while another rate was fixed by a regulatory agency, a slight difference between the two reasonably could be regarded as a tolerable, rather than an undue, disparity; or, if the difference is more than slight, there may still be partial or total justification for the differential due to a difference in the cost of the service rendered. In determining the issue of undue discrimination, the Commission should apply the rule of reasonableness in light of all the circumstances.

In the instant case the Commission did not address the question of whether the disparity between the rates under consideration was based upon a reasonable classification. Nor does it appear that the Commission adverted to whether the discrimination could be regarded as tolerable, rather than undue, because of the different circumstances surrounding the fixing of the rates. La.R.S. 45:303 appears to require adequate consideration of all such relevant factors in determining whether a rate adjustment is warranted. Therefore, we conclude the Commission exceeded the bounds of its discretion by making an adjustment in rates without a prior sound determination of the existence of an undue discrimination having prejudicial effects upon the rates under its jurisdiction.

Assuming, without deciding, that an unduly discriminatory inequality exists between the rate on sales of natural gas to the cities and the rate charged on sales to Sugar Bowl’s industrial customers, the next question to be answered is whether the Commission made a reasonable adjustment in the cities’ rate. The statute authorizes the Commission, after a hearing, to adjust the rates charged under its jurisdiction “as may be necessary to remove the prejudicial effect of such rate of such direct industrial sale.” La.R.S. 45:303. The statute does not set forth a procedure for making the adjustment or state how this remedial device should be employed in relation to other facets of the regulatory process.

Although federal applications of similar statutory provisions provide some guidance, we have discovered no comprehensive rule designed to govern all possible situations. The Supreme Court’s opinion in Federal Power Commission v. Conway Corporation, 426 U.S. 271, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976), indicates that the Federal Power Commission has latitude, at the very least, to put a utility’s wholesale electricity rates, which are within its jurisdiction, in the lower range of the zone of reasonableness, without concern that overall results will be impaired, where the utility has taken action to depress certain retail revenues, which are not within the Commission’s jurisdiction, in order to curb the retail competition of its wholesale customers. The Fifth Circuit Court of Appeals, in Georgia Power Company v. Federal Power Commission, stated that the Federal Power Commission may deal with a utility’s unjust or discriminatory practice without the necessity of a full rate hearing; in that case, however, the utility failed to present any evidence to support its somewhat speculative claim of economic loss based on the anticipated conduct of its municipal customers. In perhaps the most comprehensive discussion of the question, the District of Columbia Circuit Court of Appeals, in Towns of Alexandria, Minn. v. Federal Power Commission, construing the Federal Power Act, stated:

“The Act, while explicitly imposing upon the Commission a duty to rectify rate discrimination, is silent as to the point in the administrative process at which that obligation is to be discharged. We have not been referred to, nor have we found, either legislative history or judicial precedent bearing directly on the question. But as in the recent past we have declared, the Act’s ‘primary aim is the protection of consumers from excessive rates and charges,’ and certainly that wholesome purpose is best served by expeditious resolution of rate-discrimination claims. Moreover, as the Commission acknowledges, it has had past occasion to hold that patent discrimination may be removed without awaiting the outcome of a full-blown rate investigation. We perceive no obstacle to that course when the discrimination issue is discrete and the administrative record is sufficiently developed to enable a sound determination.” [footnotes omitted] 555 F.2d at 1029.

Nevertheless, in that case, where the question of a utility’s just and reasonable rate of return could not be separated practicably from the question of discrimination, the Court held that the Federal Power Commission properly refused to adjudicate the discrimination claim without the completion of an adequate record to decide also what rates would be compensatory.

As its federal counterpart, La.R.S. 45:303 is designed to protect consumers from excessive rates and charges through the expeditious resolution of rate discrimination claims. Nevertheless, the Commission, as in wielding its power in other areas, must act reasonably, and with due regard to its fundamental duty to fix “just and reasonable rates.” La.R.S. 45:1176; cf. La.R.S. 45:302. Accordingly, in some cases it may be proper for the Commission to remove patent discrimination without conducting hearings regarding the effect of such an adjustment on the company’s rate of return. In other instances, however, depending on such factors as the nature of the discrimination and the magnitude of the proposed adjustment, it may be unreasonable for the Commission to take remedial action without a thorough assessment of the probable impact of the adjustment.

The record in the proceedings now under consideration reflects that Sugar Bowl did not intentionally or recklessly bring about the alleged undue discrimination. In its opinion the Commission implied that the company displayed irresponsibility in obligating itself to deliver such huge volumes of gas under the long term industrial contracts, and it further insinuated that transactions between the company and its corporate affiliates were less than arm’s length contracts. However, the evidence does not support these conclusions. There is no evidence in the record that Sugar Bowl intended to grant preferential treatment in any of its contracts. To charge the company with foresight of the present national energy shortage in the 1960’s would set a standard of acuity that could be met by very few, if any, in the natural gas industry, according to the record before us. Consequently, it would not be reasonable to conclude, on the present record, that Sugar Bowl intentionally or recklessly established discriminatory rates or practices in the same manner as the utilities in the federal cases compared. Moreover, the instant case may be further distinguished from Georgia Power Company v. Federal Power Commission, supra, in which the agency was not required to conduct a rate hearing, because here the Public Service Commission refused to allow the introduction by Sugar Bowl of any evidence showing the ramifications of the proposed adjustment relative to its rate of return. From our review of such evidence which was later admitted by the district court it would appear that Sugar Bowl’s claim, that its rate of return will not be reasonable after the Commission’s adjustment, is not mere speculation nor an issue which fairly can be characterized as discrete or separable.

Under the circumstances of this case the Commission was not justified in implementing its proposed rate adjustment without first determining the probable effect it would have on the company’s rate of return.

In addition to the basic flaws in the administrative proceedings which we have discussed thus far, there are other areas of concern that should be pointed to in an effort to guide the Commission in any future proceedings in this case.

La.R.S. 45:303 contains additional limitations on the authority of the Commission which are not found in the other regulatory statutes we have examined. The Commission is only authorized to adjust rates “as may be necessary to remove the prejudicial effect” caused by “any particular direct industrial sale.” La.R.S. 45:303. This language indicates that the Commission must determine the nature and extent of prejudice caused jurisdictional rates or ratepayers by specific industrial sales, and it implies that the adjustment must be designed to reduce the regulated rate only so far as is necessary to remove the prejudice or injury.

The Commission did not identify the particular direct industrial sales which constituted undue discrimination. Nor did it explain how it determined the causal connection between the preferential sales and the prejudice to jurisdictional rates, or how it arrived at the amount of such prejudice. It would appear essential to a proper judicial review of the Commission’s adjustment of rates under the statute that its findings pertaining to undue discrimination, causal connection between the discrimination and prejudice to rates, and the amount of the prejudice to rates be supported with fully articulated reasons as well as with sufficient evidence.

In addition to distributing gas to industries and cities, Sugar Bowl sells gas directly to 10,000 individual residents who do not receive service from any of the cities. Apparently, none of the residents were parties to the appeals in this case, and no pleadings or briefs have been filed in their behalf in this Court. However, it appears from the arguments on file that Sugar Bowl’s sales to them are subject to the jurisdiction of the Commission. Therefore, we note that because of those residential customers one additional circumstance should be taken into consideration by the Commission before making any adjustment to the cities’ rates, and that is whether any adjustment is necessary in order to avoid undue discrimination between the city and rural residential consumers.

This case presents for our review only the merits of the preliminary injunction issued by the district court. In order to affirm the district court’s action we must find that there is a reasonable possibility that Sugar Bowl would ultimately prevail on the merits of the case and, that in the absence of injunctive relief, it would suffer irreparable injury. Central Louisiana Telephone Co. v. Louisiana Public Service Commission, 262 La. 819, 264 So.2d 905 (1972). For the reasons expressed herein we believe that more than ample grounds exist for both findings and that the district court did not abuse its sound discretion. Because of the posture of the case we may do no more than affirm the lower court’s judgment. However, due to the insufficiency of the record in many respects and due to the fact that our newly enunciated principles of law were not available to the Commission in the initial proceedings, it would appear to be preferable for the district court to vacate the Commission’s order and remand the case for further proceedings in the light of our opinion herein.

The judgment of the district court is affirmed at relator’s cost.

DIXON, J., dissents.

CALOGERO, J., dissents and assigns reasons.

CALOGERO, Justice

(dissenting).

The Louisiana cities which are Sugar Bowl’s customers can’t win for losing. On the one hand they are told that the Louisiana Public Service Commission had the right to increase the price of natural gas sold to them by Sugar Bowl Gas Corporation notwithstanding fixed price contracts. City of Plaquemine v. Louisiana Public Service Commission, 282 So.2d 440 (La.1973). On the other hand, they are now told that Louisiana Public Service Commission did not thereafter have the right to reduce rates chargeable to them for natural gas, a decision founded in part on the adverse consequence of Sugar Bowl’s low price contracts with unregulated industries.

Needless to say this is something of an oversimplification of some very complex issues. And there is indeed merit to certain of the principles set down in the majority opinion to govern the Commission’s proceedings hereafter in this and related cases. I simply disagree with the majority’s finding that plaintiff has made out a showing of the improper exercise of authority by the Commission and consequent irreparable injury, so as to warrant affirming the trial judge’s preliminarily enjoining the Commission.

      . These customers included the municipalities of Plaquemine, Thibodaux, Donaldsonville, White Castle, Iberville Parish, and public systems named Polaris and Polaris (Killona).

      . Under the terms of the Natural Resources and Energy Act of 1973, La.R.S. 30:501 et seq., certain contracts with the direct industrial users entered into after December 8, 1973 would ostensibly be subject to regulation by the Division of Natural Resources and Energy in the State Department of Conservation. See, La.R.S. 30:591 et seq.

      . The record indicates that the Iberville Parish Gas District intervened in the proceedings.

      . The Commission’s order, in pertinent part, provided:
      “Accordingly, the Commission’s orders insofar as they regulate the price of sales by Sugar Bowl to city gate customers are amended and modified so that the price charged shall be calculated on the basis of the average price per MCF paid by Sugar Bowl to pre-April 1972 suppliers which continue to supply natural gas up to the comparable consumption during the twelve months preceding April 1972. For any additional gas taken by jurisdictional customers in excess of pre-1972 usage, Sugar Bowl shall charge the average price per MCF for natural gas purchased under supply contracts entered into subsequent to April 1972; provided that the total charge shall not exceed the average MCF price paid by Sugar Bowl for all gas purchased during the billing period.”

        .Id.

      . The increases were as follows: Sugar Bowl, from 25 cents MCF to $1.45 MCF; Louisiana Intrastate Gas, from 29 cents MCF to $1.08 MCF; Monterey Pipeline, from 25 cents MCF in June, 1973 to $1.03 MCF.

      . Paragraph 4 of La.R.S. 45:303 provides:
      “The commission has no jurisdiction over direct industrial sales by such public utilities unless after investigation the commission shall find that any particular direct industrial sale is prima facie prejudicial to the rates charged for natural gas sold to local distributing systems for resale, in which event the commission has authority after a hearing on the matter to order such adjustment in the rates charged for gas sold to local distributing systems for resale, as may be necessary to remove the prejudicial effect of such rate of such direct industrial sale.”

      .Paragraph 3 of La.R.S. 45:303 provides:
      “Whenever the commission is required in administering the provisions of this Part to find the value of gas in the field where produced, that value shall be determined at the amount paid therefor by the pipe line company in the field pursuant to arm’s-length contract; and in the absence of such arm’s-length contracts, the fair market value of the gas as a commodity in the field.”

      . See, La.R.S. 45:301.

      . 15 U.S.C. § 717c(b).

      . 15 U.S.C. § 717d(a).

      . Sugar Bowl contends that the statutory authority to make such adjustments is qualified by the last paragraph of La.R.S. 45:303 which provides as follows:
      “The power and authority conferred by this Section shall not apply to the transportation or sale of natural gas to direct industrial consumers by such utilities but shall, in respect of such transportation or sale, be restricted to the determination by the commission of the cost of service properly allocable to such transportation or sale and to the allocation of the cost to that service.”
      As enacted by the legislature in Act No. 373 of 1946, this provision was clearly not intended as a restriction ón the powers of the Commission to adjudicate discrimination claims. Rather, it deals with the separation procedures used in fixing rates for the jurisdictional sales.

      . Bonbright, at 369 (1961).

      . Priest, at 301.

      . Priest, at 301.

      . Priest, at 302.

      . Hicks v. City of Monroe Utilities Comm., 237 La. 848, 876, 112 So.2d 635, 645 (1959). See also, State ex rel Guste v. Council of City of New Orleans, 309 So.2d 290 (La.1975).

      . 16 U.S.C. § 824e(a).

      . Federal Power Commission v. Conway Corporation, 426 U.S. 271, 96 S.Ct. 1999, 48 L.Ed.2d 626 (1976). In litigation under the Natural Gas Act, which contains similar provisions, 15 U.S.C. §§ 717c and d, the Supreme Court has stated that consideration of the relationship between jurisdictional and non-jurisdictional rates is proper in fixing rates for jurisdictional sales. Panhandle Eastern Pipe Line Co. v. Federal Power Commission, 324 U.S. 635, 65 S.Ct. 821, 89 L.Ed.2d 1241 (1945); cf. Colorado Interstate Co. v. Federal Power Commission, 324 U.S. 581, 65 S.Ct. 829, 89 L.Ed.2d 1206 (1945).

      . Federal Power Commission v. Sierra Pacific Power Co., 350 U.S. 348, 355, 76 S.Ct. 368, 373, 100 L.Ed. 388, 395 (1956).

      . Cf. Hicks v. City of Monroe Utilities Comm., 237 La. 848, 876, 112 So.2d 635, 645 (1959).

      . See, Cities of Batavia et al. v. Federal Power Commission, 179 U.S.App.D.C. 101, 548 F.2d 1056 (1977) which suggests such a justification would exist for a disparity between rates on sales of electricity to cities which take their peak at the same time as the system peak load, and the rate on sales to industrials which take their peak load at times different from the system peak.

        . Priest, supra, at 302.

      . 373 F.2d 485 (5th Cir. 1967).

      . 555 F.2d 1020, 1029 (D.C.Cir. 1977).

      . See, e. g., Louisiana Oilfield Carriers Association, Inc. v. Louisiana Public Service Commission, 281 So.2d 698 (La.1973); Louisiana Tank Truck Carriers, Inc. v. Louisiana Public Service Commission, 244 La. 909, 155 So.2d 15 (1963); Louisiana Power & Light Co. v. Louisiana Public Service Commission, 256 La. 656, 237 So.2d 673 (1970).


author: CALOGERO, Justice. SANDERS, Chief Justice

text:
    Claims of James D. PARKER et al. v. Joseph R. GERACE et al. Claims of Sherman BRUMFIELD et al. v. Joseph R. GERACE et al. Claims of Joseph BAGENT et al. v. Joseph R. GERACE et al.
    No. 60203.
    Supreme Court of Louisiana.
    Jan. 30, 1978.

      Louis L. Robein, Jr., Jerry L. Gardner, Jr., Dodd, Barker, Boudreaux, Lamy & Gardner, New Orleans, for plaintiffs-applicants.
    James A. Piper, James A. McGraw, Baton Rouge, E. B. Dittmer, II, Talley, Anthony, Hughes & Knight, Bogalusa, for defendants-respondents.
   CALOGERO, Justice.

Under the collective bargaining agreement between Locals 189 and 1362 of United Paperworkers International Union and Crown Zellerbach Corporation, plaintiff-re-lators, who are employees of Crown Zeller-bach at its Bogalusa, Louisiana paper mill, are paid for certain designated “holidays,” notwithstanding they are generally off work on those days.

Shortly before Christmas of 1974 claimants were placed on lay-off status, that is, they were temporarily laid off because of curtailment of production at the mill. They apparently remained out of work for several weeks during which time they applied for unemployment compensation. Under the law they are entitled to that compensation if they meet certain requirements, including that they be “unemployed.” The act provides that “Any individual shall be deemed to be ‘unemployed’ in any week during which he performs no services and with respect to which no wages are payable to him . . . .” R.S. 23:1472(19).

During the lay-off period, however, claimants had received holiday pay as provided for in the collective bargaining agreement for December 24th, 25th and 26th. For each of these three days they received eight hours pay at their respective straight time rates.

Apparently because payment of unemployment compensation claims affects the employer’s experience rating and may contribute to precluding a reduction in the company’s payroll tax, the company opposed the applications. It contended that applicants had received holiday pay for the 24th, 25th and 26th of December and were thus not entitled to unemployment compensation for the week ending December 28, 1974.

Claimants prevailed in two of the three eases before the agency (actually an appeals referee for the Department of Employment Security), lost before the Board of Review, succeeded in the Twenty-Second Judicial District Court for the Parish of Washington, and lost again in the Court of Appeal. Parker v. Gerace, 346 So.2d 853 (La.App. 1st Cir. 1977).

We granted writs on application of claimants to review that decision of the Court of Appeal, and to consider whether under the appropriate statutes claimants were “unemployed” during the week ending December 28, 1974. 349 So.2d 333 (La.1977).

Louisiana Revised Statute 23:1472, briefly alluded to above, defines unemployment and wages as follows:

“(19) ‘Unemployment’ — Any individual shall be deemed to be ‘unemployed’ in any week during which he performs no services and with respect to which no wages are payable to him, or in any week of less than full-time work if the wages payable to him with respect to such week are less than his weekly benefit amount.
“(20)(A) ‘Wages’ means all remuneration for services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash.” [emphasis here and elsewhere added]

Louisiana Revised Statute 23:1593 provides in pertinent part:

“An eligible individual who is employed in any week shall be paid with respect to such week a benefit equal to his weekly benefit amount less that part of his wages, if any, payable to him with respect to such week in excess of fifty percent of his current weekly benefit amount.”

The Local 189-Crown Zellerbach contract provides:

“For each recognized holiday an eligible employee shall receive eight (8) hours’ pay at the straight time rate of the job on which he worked on his last working day before the holiday. If such employee works on the holiday, he shall receive additional compensation as provided in Section XIV — ‘Overtime’.
“In order to be eligible for holiday pay, an employee must meet all of the following conditions:
“1. He must have been on the payroll of the Company for a period not less than thirty (30) days immediately preceding the holiday.
“2. He must have worked his scheduled work day immediately before and immediately following the holiday unless absent for a justifiable cause.
“3. He must have worked on the holiday if scheduled to work unless absent for justifiable cause.
“An employee will be considered absent for justifiable cause:
“1. If he is on vacation; or,
“2. If he is unable to work because of illness or injury, which must be proven by evidence satisfactory to the Company, and the holiday falls within the first six (6) months of such absence; or,
“3. If he has been excused by his supervisor.”

The Section XIV overtime to which the employee who works on the holiday is additionally entitled is time and a half for each hour worked. The Local 1362 contract has similar provisions to these.

The pertinent inquiry here is whether under the statute claimants were “unemployed” on the days when they had been laid off but received holiday pay. If so, they are entitled to unemployment compensation notwithstanding receipt of holiday pay. If not, any weekly benefit amount to which they would otherwise be entitled must be reduced in accordance with a prescribed formula by wages payable to them with respect to such week. R.S. 23:1593. Thus the definition of unemployment in R.S. 23:1472, its proper construction, and its application to the facts of this case is dis-positive of this litigation.

Since wages as defined by R.S. 23:1472(20)(A) means all remuneration for services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash, we are inclined to believe that holiday pay, like salary and other fringe benefits (together sometimes referred to as the “wage package”), comprises wages in this broad sense under the statute. That, however, does not end our inquiry. We must further construe the definition of unemployment in R.S. 23:1472(19). It encompasses, as we interpret it, any week during which an individual performs no services and with respect to which such week no remuneration for services performed that week is payable to him.

Admittedly, this construction of the statutory language is not the only reasonable one possible. Defendant contends, and not frivolously, that the language should be construed to mean that the individual is unemployed who performs no services in a given week and receives in that week (or ascribable to that week) no remuneration for services whenever performed.

Because either construction of the statutory language seems equally plausible, we hold that this portion of the statute is ambiguous. The Louisiana Employment Security law is remedial social legislation. It is to be construed liberally and in the interest of the statute’s beneficiaries. National Gypsum Company v. Administrator, 313 So.2d 230 (La.1975); Lambert v. Brown, 169 So.2d 4 (La.App. 2nd Cir. 1964). For this reason we resolve the ambiguity by construing the statute as contended by the claimants, that is, that to be unemployed there must be no remuneration for services performed that week.

Applying the construction we have chosen, we must determine whether these claimants received remuneration for services which were performed the week ending December 28, 1974. We conclude that the holiday pay was not remuneration for services performed on the holidays or during the week when the holidays fell. Bearing heavily upon our conclusion is the fact that were claimants to have in fact performed services on the prescribed holidays, because scheduled to work or otherwise, they would have received, in addition to the holiday pay, time and one-half pay for each hour worked. It is thus apparent that they received holiday pay not in relation to services performed that day, nor that week, but rather as a fringe benefit of their employment simply by virtue of being a company employee during the contract period and meeting the contract eligibility requirements referred to hereinabove. Their holiday pay was a fringe benefit just like insurance or annuities, retirement, sickness or accident disability, medical and hospitalization expenses which, incidentally, are specifically excluded from wages by R.S. 23:1472(20)(C).

The noninclusion of holiday pay in R.S. 23:1472(20)(C) neither helps nor hinders claimants in their legal position. The sole inquiry as we see it is not whether the legislature has said holiday pay is or is not included in wages but rather, in the absence of a legislative expression, whether this Court should construe holiday pay as described in this contract as remuneration for services performed during the week in question.

Defendants argue that the contractual requirements for eligibility for holiday pay indicate the holiday pay is remuneration for the services impliedly stated therein. They point out that, under the relevant contractual provisions, to be eligible for holiday pay an employee must have been on the payroll for thirty days or more and must have worked his scheduled work day immediately before and immediately following the holiday unless absent for a justifiable cause and must have worked on the holiday if scheduled to work unless absent for justifiable cause. They cite Geremia v. Administrator, Unemployment Comp. Act, 146 Conn. 264, 150 A.2d 203 (1959) in support of the contention that the employee helps maintain continuity of production by working on the day before and the day after the holiday and that such is a condition to receipt of the holiday pay. Of course in this case plaintiffs did not work on the holiday^) nor on the day before or after the holiday(s). Rather they were absent for apparently justifiable cause (lay-off) and were not paid for any of those days. In any event, were they to have worked the day before and after, the pay, if ascribable to the day before, day after service, would not have been for services performed on the holiday. Furthermore were we to consider the contractual requirements controlling, the pay would still not be exclusively for services performed in the same week, i. e., the day before and the day after, and/or several days during the week and before the holiday(s). At best it might be said that the holiday pay was partially to remunerate the employee for day before/day after and pre-holiday employment of not less than thirty days. Even under this construction, one most favorable to defendants, the holiday pay would only have been partially for work during the week of the holiday.

Actually we believe the better construction to be and we now hold that holiday pay is a fringe benefit of employment not ascribable to services performed on the holiday or the week of the holiday or any other specific calendar period.

One of the more serious arguments put' forth by defendants is that there should be no double payment of unemployment compensation and holiday pay for the same period because they should not be paying a payroll tax on holiday pay while suffering for the holiday an experience rating disadvantage prompted by payment of unemployment compensation benefits. In this regard, they say they have paid the payroll tax on the holiday pay. They argue, and not implausibly, that it is unfair to hold that holiday pay is wages for purposes of the tax but is not wages for purposes of deduction against compensation benefits. Our answer to defendant’s position is that we have not held and do not here hold that holiday pay is wages for purpose of the tax.

Defendants also rely heavily upon eases in the national jurisprudence favorable to their position that holiday pay constitutes wages. General Motors Corp. v. Michigan Unemployment Comp. Com’n, 331 Mich. 303, 49 N.W.2d 305 (1951); Erickson v. General Motors Corp., 177 Kan. 90, 276 P.2d 376 (1954); In the Matter of the Employees of the Weyerhaeuser Timber Co., 53 Wash.2d 235, 332 P.2d 947 (Wash.1958); Geremia v. Administrator, Unemployment Comp. Act, supra; Moore v. State of Delaware Unemployment Comp. Com’n, 3 Storey 209, 167 A.2d 76 (Del.1961); Autwell v. State Dept. of Industrial Relations, 47 Ala.App. 8, 249 So.2d 625 (Ala.Civ.App.1971).

This line of cases stems from General Motors Corporation v. Michigan Unemployment Compensation Commission, supra, a 1951 decision of the Michigan Supreme Court with which we are not in agreement. There is incidentally a contrary decision by the New York Supreme Court, Appellate Division in Roman v. Catherwood, 25 A.D.2d 580, 266 N.Y.S.2d 907 (1966).

In any event we are not bound by the Michigan case and its progeny. And in fact we come to a different result as we construe our statute and the facts of this case.

Decree

For the foregoing reasons the judgment of the Court of Appeal is reversed. The judgment of the district court favorable to plaintiffs, reversing the decisions of the Louisiana Board of Review of the Louisiana Department of Employment Security dated respectively May 23, 1975, September 26, 1975 and December 19, 1975 and ordering payment to plaintiff-claimants of unemployment compensation benefits is reinstated. The case is remanded to the Board of Review for further proceedings in accordance with our decision; costs to be borne by defendants.

REVERSED AND REMANDED.

SANDERS, C. J., dissents with written reasons.

SUMMER, J., dissents.

SANDERS, Chief Justice

(dissenting).

The sole issue presented here is whether holiday pay is wages and thus deductible from unemployment benefits under LSA-R.S. 23:1471, the Louisiana Employment Security Law.

The Court of Appeal held that holiday pay is wages. See Parker v. Gerace, La.App., 346 So.2d 853 (1977). I agree.

LSA-R.S. 23:1593 provides in pertinent part:

“An eligible individual who is employed in any week shall be paid with respect to such week a benefit equal to his weekly benefit amount less that part of his wages, if any, payable to him with respect to such week in excess of fifty percent of his current weekly benefit amount.” [Emphasis added.]

LSA-R.S. 23:1472 defines unemployment and wages as follows:

“(19) ‘Unemployment’ — Any individual shall be deemed to be ‘unemployed’ in any week during which he performs no services and with respect to which no wages are payable to him, or in any week of less than full-time work if the wages payable to him with respect to such week are less than his weekly benefit amount.
“(20)(A) ‘Wages’ means all remuneration for services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash.” [Emphasis added.]

The relevant contractual provisions between the employer and the employees provide:

“For each recognized holiday an eligible employee shall receive eight (8) hours’ pay at the straight time rate of the job on which he worked on his last working day before the holiday. If such employee works on the holiday, he shall receive additional compensation as provided in Section XIV — ‘Overtime’.
“In order to be eligible for holiday pay, an employee must meet all of the following conditions:
“1. He must have been on the payroll of the Company for a period not less than thirty (30) days immediately preceding the holiday.
“2. He must have worked his scheduled work day immediately before and immediately following the holiday unless absent for a justifiable cause.
“3. He must have worked on the holiday if scheduled to work unless absent for justifiable cause.
“An employee will be considered absent for justifiable cause:
“1. If he is on vacation; or,
“2. If he is unable to work because of illness or injury, which must be proven by evidence satisfactory to the Company, and the holiday falls within the first six (6) months of such absence; or,
“3. If he has been excused by his supervisor.”

During the period that relators were on temporary lay-off, their employer paid them for the Easter, Memorial Day, and Christmas holidays in accordance with the union contract. Consequently, the employer deducted the amounts paid for the holidays from the unemployment benefits owed the employees. The employees contend that the deduction for the holiday pay received was improper. They argue that because they performed no services on the holidays, the money received was not wages and thus should not have been deducted from their unemployment benefits. Alternatively, they argue that even if the holiday pay is considered wages, these “wages” are statutorily excepted under LSA-R.S. 23:1472(20)(C).

LSA-R.S. 23:1472(20)(C) exempts certain enumerated benefits from the definition of wages which would otherwise be deductible from unemployment benefits. Among those benefits specified are insurance, annuity, retirement, sickness or accident disability payments made by the employer. However, holiday pay is not included among the exceptions. Moreover, to be eligible for holiday pay under the contract here, the employee must have worked the preceding day and on the holiday if scheduled to do so, unless absent for justifiable cause.

Relators’ primary argument, that holiday pay is not wages because frequently no actual work is performed on those days, has been rejected in other jurisdictions. My research discloses that the unemployment compensation acts in those states are almost identical to our own. Moore v. State of Delaware Unemploy. Comp. Com’n, 3 Storey 209, 167 A.2d 76 (1961); Geremia v. Administrator, Unemployment Comp. Act, 146 Conn. 264, 150 A.2d 203 (1959); Weyerhaeuser Timber Co. v. State Unemp. Comp.

Com’n, 217 Or. 378, 342 P.2d 114 (1959); Di Micele v. General Motors Corp., 29 N.J. 427, 149 A.2d 223 (1959); In Re Weyerhaeuser Timber Company, 53 Wash.2d 235, 332 P.2d 947 (Wash.1958); General Motors Corp. v. Michigan Unemploy. C. Com’n, 331 Mich. 303, 49 N.W.2d 305 (1951); Draus v. Board of Review, 13 N.J.Super. 231, 80 A.2d 316 (1951).

Our state statute defines wages as “all remuneration for services, including commissions and bonuses and the cash value of all remuneration in any medium other than cash.”

The state statutes upon which the courts of other jurisdictions have based their conclusion that holiday pay is wages contain almost identical language. Those statutes define wages as meaning “all remuneration for services [or in some instances, for personal services], including commissions and bonuses and the cash value of all remuneration in any medium other than cash.”

In Di Micele v. General Motors Corp., supra, where the state statute defined wages identically, the New Jersey Supreme Court held that holiday pay is wages. In refuting the same argument advanced here, that court stated:

“But the argument is not well premised, and it begs the question. The meaning of a statute, clear and explicit in terms, cannot be enlarged or modified to accord with what might in popular view be deemed to be a more politic contrivance. The making of law, it has been said, is an exercise of the will of the state; the judicial function is an exercise of the reason of the judge in the interpretation and application of the law, to fulfill the intention of the lawmaker.”

In Geremia v. Administrator, Unemployment Comp. Act, supra, the Connecticut Supreme Court of Errors, controlled by both statutory and contractual language identical to that before us, reasoned:

“The Unemployment Compensation Act defines ‘wages’ as ‘all remuneration for employment,’ and ‘employment’ as ‘any service * * * performed under any * * * contract of hire creating the relationship of employer and employee.’ Rev.1958, § 31-222(a)(1), (b). ‘Wales' must, therefore, be taken to mean all remuneration for any service performed in the course of an employer-employee relationship. Here the employees who received holiday pay performed a service for their employers, first, in helping maintain continuity of production by working on the day before and the day after the holiday. It was apparently important to the employers that this service be rendered, otherwise there would be no reason for incorporating the requirement as a condition of the receipt of holiday pay. Again, the employees who received holiday pay performed another service for their employers in holding themselves ready for work on the holiday, if the employers required work to be done on that day. Readiness to serve may be hired, quite as much as service itself. Armour & Co. v. Wantock, 323 U.S. 126, 133, 65 S.Ct. 165, 89 L.Ed. 118. Wages are no less earned when the employee holds himself in readiness to perform than when he actually performs. General Motors Corporation v. Michigan Unemployment Compensation Commission, 331 Mich. 303, 312, 49 N.W.2d 305. Here one of the services required of the employees, in return for payment to them of holiday pay, was that they hold themselves in readiness to work on the holiday; having done so, they earned their right to holiday pay to the same extent as they earned their right to be paid wages for any other service performed for their employers pursuant to the employers’ direction. The holiday pay received by the plaintiffs was a payment of wages for the service they were required to render and did render to their employers in order to qualify for holiday pay under the provisions of the contracts. It was not a payment of compensation for loss of wages.
“Under the collective bargaining agreements, the employers were obligated to pay, and the employees were entitled to receive, wages or remuneration for services performed by the employees. For their regular wages, the service which the plaintiffs were obligated to perform consisted of production work at the times required by the agreements. For their holiday pay, the service which the plaintiffs were obligated to perform, pursuant to the provisions of the same agreements, consisted of helping to maintain continuity of production by working on the day before and the day after the holiday, and in addition, holding themselves in readiness to work on the holiday if called upon to do so. Both regular pay for production service and holiday pay for the service required as a condition of receiving holiday pay were wages or remuneration earned by the employees for services rendered. They were similar in character so far as they represented payment by the employers of remuneration earned by the employees pursuant to the provisions of their employment agreements. The agreement in the case of the plaintiff Geremia gives express recognition to this fact in the provision dealing with the computation of vacation pay. It is there provided: ‘In computing an employee’s average work week and average straight time hourly rate for purposes of vacation pay, the Company will include the hours paid for and the pay received under the holiday pay provisions of the Contract.’ In other jurisdictions where a similar question has been presented under contracts containing like provisions, holiday pay has been uniformly held to be remuneration for services rendered to the employer. General Motors Corporation v. Michigan Unemployment Compensation Commission, supra, 331 Mich. 309, 49 N.W.2d 307; In re Weyerhaeuser Timber Co., Wash. [53 Wash.2d 235], 332 P.2d 947, 949; Erickson v. General Motors Corporation, 177 Kan. 90, 98, 276 P.2d 376; Hill v. Review Board, 124 Ind.App. 83, 87, 112 N.E.2d 218.” [Emphasis added.]

In support of their position, relators cite the judgment of the Court of Appeal in American Sugar Company v. Brown, La.App., 193 So.2d 326 (4th Cir. 1967), cert. denied, 250 La. 263, 195 So.2d 145 (1967). That case dealt with the question of whether vacation pay is wages and thus deductible from unemployment compensation. The Court of Appeal held that it was. That case, of course, is distinguishable, and rela-tors’ reliance upon it is misplaced. Moreover, consistent with this dissent, the Court of Appeal stated:

“Holiday pay constitutes ‘wages’ for unemployment payment purposes. Erickson v. General Motors Corp., Buick-Oldsmobile-Pontiac Division, Kansas City, 177 Kan. 90, 276 P.2d 376, 380.”

The majority also cites Roman v. Gatherwood, 25 A.D.2d 580, 266 N.Y.S.2d 907 (1966). This is a decision of the Appellate Division of the New York state court of general trial jurisdiction. The question presented here was not raised nor considered in that case. The court held only that a week in which an employee did not report to duty but received one day holiday pay was not a “week of employment” within the Labor Law provision defining that term as a week in which the claimant did some work in employment for an employer. The decision has no persuasive force here.

Consistent with the uniform jurisprudence of courts faced with this question, I conclude that the judgment of the Court of Appeal is correct and would affirm that judgment.

For the reasons assigned, I respectfully dissent.

      . See R.S. 23:1531-1542.

      . While the controversy arose concerning December 24th, 25th and 26th, 1974 and the week ending December 28, 1974, the litigation now also apparently involves the holidays March 30, 1975 (Easter) and May 26, 1975 (Memorial Day). What if any periods of unemployment preceded or succeeded these latter holidays is not apparent from the record.

      . R.S. 23:1472(20)(C) provides that:
      “(C) The term ‘wages’ shall not include;
      (I) The amount of any payment made to or on behalf of an individual in its employ under a plan or system established by an employing unit which makes provision for individuals in its employ generally or for a class or classes of individuals, including any amount paid by an employing unit for insurance or annuities, or into a fund to provide for any such payment, on account of retirement, or sickness or accident disability, or medical and hospitalization expenses in connection with sickness or accident disability, or death, provided the individual in its employ
      (a) has not the option to receive, instead of provision for such death benefit, any part of such payment or, if such death benefit is insured, any part of the premiums (or contributions to premiums) paid by his employing unit, and
      (b) has not the right under the provisions of the plan or system or policy of insurance providing for such death benefit, to assign such benefit, or to receive a cash consideration in lieu of such benefit either upon his withdrawal from the plan or system providing for such benefit or upon termination of such plan or system or policy of insurance or of his services with such employing unit;
      (11) The payment by an employing unit (without deduction from the remuneration of the individual in its employ) of the tax imposed upon a worker under Section 1400 of the United States Internal Revenue Code.
      (Ill) Dismissal payments which the employing unit is not legally required to make.”

      . See R.S. 23:1531, 1532 and 1533.

      . While we do not have to decide that specific issue in this case, it would seem that holiday pay, as we here construe it, is no more wages for purposes of payroll tax than are the fringe benefits described in R.S. 23:1472(20)(C).

      . There the Court found unfavorably to the claimant but analogously favorable to claimants here that holiday pay was not wages. The claimant in that case was arguing that holiday pay of Christmas week was wages in order to make forty weeks of employment for unemployment compensation eligibility.

      . LSA-R.S. 23:1472(C) provides that:
      “(C) The term ‘wages’ shall not include;
      “(I) The amount of any payment made to or on behalf of an individual in its employ under a plan or system established by an employing unit which makes provision for individuals in its employ generally or for a class or classes of individuals, including any amount paid by an employing unit for insurance or annuities, or into a fund to provide for any such payment, on account of retirement, or sickness or accident disability, or medical and hospitalization expenses in connection with sickness or accident disability, or death, provided the individual in its employ
      “(a) has not the option to receive, instead of provision for such death benefit, any part of such payment or, if such death benefit is insured, any part of the premiums (or contributions to premiums) paid by his employing unit, and
      “(b) has not the right under the provisions of the plan or system or policy of insurance providing for such death benefit, to assign such benefit, or to receive a cash consideration in lieu of such benefit either upon his withdrawal from the plan or system providing for such benefit or upon termination of such plan or system or policy of insurance or of his services with such employing unit;
      “(II) The payment by an employing unit (without deduction from the remuneration of the individual in its employ) of the tax imposed upon a worker under Section 1400 of the United States Internal Revenue Code.
      “(Ill) Dismissal payments which the employing unit is not legally required to make.”

      . Subsequent to Moore v. State of Delaware Unemploy. Comp. Com’n, supra, the Delaware Legislature amended the statute to specifically exclude holiday pay from the definition of wages. Hence, based upon this specific legislation, the Delaware Supreme Court later held that holiday pay is not wages. See General Motors Corporation v. Crishock, 287 A.2d 648 (Del.1972).