author: SAMUEL, Judge.

text:
    Jack SCHWEIBISH d/b/a Metal Services of Colorado v. PONTCHARTRAIN STATE BANK.
    No. 11148.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 9, 1980.
    Rehearing Denied Nov. 17, 1980.

      Paula A. Peronne, New Orleans, for Jack Schweibish, d/b/a Metal Services of Colorado, plaintiff-appellee.
    Newman & Drolla, Robert A. Mathis, New Orleans, for Pontchartrain State Bank, defendant-appellant.
    Before SAMUEL, BOUTALL and BARRY, JJ.
   SAMUEL, Judge.

Plaintiff, Jack Schweibish, d/b/a Metal Services of Colorado, filed this suit against the Pontchartrain State Bank to recover the sum of $12,285.30, which he claims the bank owes him under an irrevocable letter of credit dated July 2, 1976.

The defendant answered, denying it had issued the letter of credit. In the alternative, it alleged plaintiff failed to comply with the terms of the claimed letter of credit by not furnishing the documentary evidence called for by those terms. Defendant further asserted the documents called for by the credit were not timely received by it, and that the credit was can-celled.

After a trial on the merits, there was judgment in favor of plaintiff in the amount prayed, together with interest and costs. Defendant has appealed.

The document sued upon was printed on defendant’s form. It is styled “Irrevocable Credit No. 000139 -76”, dated July 2, 1976, and is addressed to United Bank of Denver National Association. It authorizes that bank to draw on it for the account of International Metals Corporation up to the amount of $12,500 available by sight draft for 100% “Invoice Cost” to be accompanied by the following documents:

“Your invoice to Internation [sic] Metals covering 40,000 lbs. of aluminum scrap 6061 6063.
Certified Scale Weight slip showing net amount of Aluminum shipped.
Signed Bill’s [sic] of lading in duplicate. You may draw against this credit at 35 cents per pound shown at net weight of Aluminum scrap.”

The letter of credit further provides bills of lading must be dated not later than July 12, 1976, and drafts drawn against the credit shall be honored on delivery of the specified documents if negotiated or presented at the bank on or before July 12, 1976. It further provides it is subject to the Uniform Customs and Practice for Documentary Credits (1962 Revision) in accordance with brochure No. 222 of the International Chamber of Commerce.

The credit was issued to plaintiff at the request of an organization named International Metals Corporation. Plaintiff sold aluminum to International Metals between February and July, 1976. Defendant bank did not receive any remuneration from International Metals for the issuance of the credit.

Plaintiff agreed to sell International Metals approximately 30,000 pounds of aluminum scrap. The aluminum was sold to plaintiff by Accurate Perforating Company, Inc., of Chicago, and it was delivered to International Metals in Chicago on July 8, 1976 through an entity known as Croft Metals of McComb, Mississippi. Plaintiff’s price to International Metals was $12,-285.30. The parties do not dispute aluminum was delivered to Croft Metals as nominee of International Metals and that plaintiff complied with his contract.

On two or three prior occasions plaintiff undertook metal transactions with International Metals, and he received payment from defendant under similar letters of credit. However, defendant did not pay plaintiff under its letter of credit in suit.

Plaintiff testified he contacted a defendant employee when he realized he had not been paid. The bank employee insisted the bank had not received the documentation required by the credit, and further generally refused to discuss the transaction with him.

Defendant contends it is not liable to plaintiff because he did not comply with the requirements of the credit prior to its stated deadline of July 12, 1976 and because the documentation furnished by him did not precisely conform with the conditions stated in the credit. Defendant relies most heavily on plaintiffs failure to issue a sight draft. Plaintiff maintains he furnished defendant with an invoice to International Metals and a bill of lading from Accurate Perforating Company, Inc., well in advance of the deadline and that the documentation he furnished was not substantially different from the previous transactions when defendant honored its credits. Plaintiff also argues defendant violated its duty to him by not informing him of its decision to dishonor the credit.

In the preamble to the judgment, the trial judge stated it was his opinion that plaintiff timely complied with the requirements of the letter of credit, that defendant’s failure to honor the letter of credit was the result of the prospective failure of its customer, International Metals, and that plaintiff’s performance and reliance upon the credit entitled him to recover.

The evidence introduced by both sides leaves much to be desired. This is probably explained by plaintiff’s inexperience as a layman representing himself in the trial court and by the urgency caused by a hurricane scheduled to strike the Louisiana coast the evening of trial. Nevertheless, the evidence is sufficient for both the trial judge and this court to reach a valid decision.

Louisiana law on letters of credit is almost exclusively statutory. It is derived basically from Article 5, of the Uniform Commercial Code in force in the other 49 states, the District of Columbia, and the Virgin Islands.

A letter of credit is defined as “an engagement” by a bank made at the request of a customer that the issuer, will honor drafts or other demands for payment upon compliance with the conditions specified in the credit. It may call for a “documentary draft” conditioned upon the presentation of a document or documents to the bank issuing the credit. As defined in the statute a “customer” is a buyer or other person who causes a bank to issue a credit, and a “beneficiary” of a letter of credit is a person entitled under its terms to draw or demand payment.

No consideration is necessary to establish a letter of credit. In the absence of contrary agreement, the credit is established in relation to the beneficiary when he receives a letter of credit or an authorized written advice of its issuance. Once an irrevocable letter of credit is established for the beneficiary it can be modified or revoked only with his consent. An issuing bank must honor a draft or demand for payment which complies with the terms of the letter of credit regardless of whether the goods or documents conform to the underlying contract between the bank’s customer and the beneficiary. Hence, if the documents appear on their face to comply with the terms of a credit, the issuing bank must honor a draft or demand for payment by a negotiating bank or other holder taking the draft or demand under the credit and under circumstances which would make it a holder in due course, by a person to whom a document of title has been negotiated, or by a bona fide purchaser of a security. In all other cases, an issuing bank acting in good faith may honor the draft or demand for payment despite notification from the customer of fraud, forgery, or other defect not apparent on the face of the document.

The latter statutory rule is in conformity with the jurisprudence previously arising out of Louisiana which established that because a bank issuing a credit deals only in instruments and not in goods or merchandise, it is not concerned with the contract between its customer and the beneficiary, and it agrees only to honor drafts drawn and negotiated in strict compliance with the letter of credit. Present statutory law is likewise in conformity with previous Louisiana jurisprudence that a bank issuing an irrevocable credit is absolutely liable to the drawer making demand in accordance with the terms of the credit even though the bank was not paid by its customer. Moreover, jurisprudence arising from Louisiana has established that a bank’s evaluation of whether supporting documents submitted to it are in conformity with requirements of the credit is subject to judicial review as to reasonableness.

The first issue we face is whether the plaintiff acted timely in presenting documentation under the letter of credit to defendant. Neither party has cited legal authority expressly authorizing an issuer to place a time limit on a letter of credit; however, Louisiana law authorizes a credit to specify conditions. and we hold a time limit is a reasonable if not a necessary condition of a letter of credit.

Plaintiff testified that on or about July 7, 1976 he mailed to defendant his invoice on International Metals dated July 7, 1976 and a copy of a bill of lading from Accurate Perforating Company, Inc. evidencing the sale of 39,630 pounds of aluminum punchings. He mailed these documents by ordinary mail. He discussed nonpayment with defendant’s employee prior to July 9, 1976. When told defendant contended it had not received the documents, he caused an employee of International Metals to deliver copies of the documents to defendant before July 12, 1976, the deadline stated in the credit. Plaintiff did not send the documents by certified mail, and he could not produce a cover letter at trial. He nevertheless testified that on the prior occasions when he dealt with International Metals by means of defendant’s letter of credit, he handled the documentation in precisely the same manner as he did in the present transaction, and he was paid in due course without difficulty. The employee of the defendant bank who handled the transaction possessed no recollection whatever of the time sequence.

Plaintiff could not support his testimony with other evidence to show when he mailed the documentation, but his testimony is unequivocal and essentially uncontra-dicted. Moreover, that testimony is supported by implication in portions of the testimony offered by the bank’s employee when she testified, as will be discussed more fully below, that she consulted with a principal of International Metals to ascertain whether the documentation furnished the bank by plaintiff conformed with the underlying contract between International Metals and plaintiff. Accordingly, we find the trial court’s finding of timeliness must stand.

The second issue for our consideration also is purely factual. The trial judge found defendant’s failure to honor the credit was caused by the impending failure of International Metals. The record shows the financial dealings of International Metals’ principal, Sol Sieger, were being probed by the Federal Bureau of Investigation at the time of the transaction in dispute. Moreover, the bank had not been paid by International Metals for the issuance of the credit. Defendant’s personnel were aware of the F.B.I. investigation. Eventually Sieger was indicted and convicted regarding a transaction with an Oklahoma firm involving interstate fraud. Hence, the record, in some measure, supports the trial judge’s finding of the bank’s motivation for not honoring the letter of credit. We agree with that finding.

The final question for our determination is whether plaintiff’s reliance on the letter of credit entitled him to recover from defendant even though the record clearly establishes he did not precisely comply with the letter’s stated requirements. While plaintiff furnished invoice and bill of lading, he did not furnish a sight draft drawn on the defendant. However, the evidence is equally clear defendant did not require strict compliance with requirements in letters of credit issued plaintiff in previous dealings.

The witness who handled the bank’s letters of credit testified that while she was a defendant employee at least two previous irrevocable letters of credit issued to plaintiff were honored, and plaintiff was paid for the account of International Metals, even though the documentation furnished by him did not strictly or properly comply with the terms of each credit issued. For example, a letter of credit dated May 26, 1976 in the amount of $28,000 was paid even though no sight draft was drawn on defendant and two invoices sent by plaintiff did not properly conform to the credit. The transaction most closely in compliance with documentation requirements involved a credit dated March 16, 1976 for the amount of $12,000. That letter of credit contained basically the same documentary requirements as did the one in suit, and plaintiff supplied defendant with an invoice and sight draft issued by his Denver bank. The evidence offered by defendant did not establish plaintiff furnished the required bills of lading, but nevertheless defendant honored its letter of credit in the exact amount of plaintiff’s invoice to International Metals.

Because there is little jurisprudence on letters of credit in Louisiana, defendant cites the New York case of Bounty Trading Corporation v. S.E.K. Sports Wear as authority for the rule that a bank is entitled to dishonor a letter of credit when its beneficiary fails to present a sight draft in accordance with its conditions. In holding for the bank, the Bounty Trading Corporation court stated:

“Since the terms and conditions of a letter of credit must be strictly adhered to, plaintiff is not entitled to the funds secured thereby.”

It would appear that in the transaction now before us, the requirement of presentation of a sight draft, even though contained in the letter of credit, is for the benefit of the issuing bank rather than for the bank’s customer. Thus, insofar as the distinction between a sight draft and a demand for payment is concerned, the bank’s statutory duty to its customer to examine documents with care to ascertain that on their face they appear to comply with the terms of the credit seems to be mitigated. Nevertheless, for the sake of this opinion we assume the bank is entitled to require a sight draft instead of a demand for payment if presentation of a sight draft is a condition in the credit as allowed by law.

Having made this assumption, the defendant would seem to be entitled to judgment. However, Louisiana law allows application of other appropriate legal principles when necessary. Specifically, R.S. 10:5-102(3) provides as follows:

“This Chapter deals with some but not all of the rules and concepts of letters of credit as such rules or concepts have developed prior to this act or may hereafter develop. The fact that this Chapter states a rule does not by itself require, imply or negate applications of the same or a converse rule to a situation not provided for or to a person not specified by this Chapter.” LSA-R.S. 10:5-102(3).

We interpret this provision to mean that the chapter on letters of credit does not attempt to be sui juris, but instead allows application of other legal principals “to a situation not provided for” therein. The case before us is one for the application of the doctrine of estoppel, and we conclude the quoted statutory provision allows its application in this case since the chapter covering letters of credit is totally silent on estoppel by previous actions. It is important to note, moreover, that neither party has referred to any authority precluding application of the doctrine of estoppel to issuers of letters of credit, and our own independent research likewise has revealed no such jurisprudence.

It is well settled in Louisiana that when a party with full knowledge of the facts has acted or conducted himself in a particular manner, he cannot afterward assume a position inconsistent with his previous behavior to the prejudice of one who has acted in reliance on such conduct.

The defendant bank was well acquainted with the legal and commercial practice applicable to letters of credit, and it was entitled to demand strict compliance with the conditions stated in the letters of credit issued to plaintiff. Nevertheless it chose not to require strict compliance with these conditions so long as mere substantial requirement did not conflict with the bank’s own interests. However, after completing two or three transactions involving issuance of credits for International Metals to fund a sale from plaintiff, the bank assumed a position totally inconsistent with its prior actions by insisting on strict compliance with the conditions of the credit. Whether defendant received no consideration or anticipated receiving no consideration, its previous course of action in demanding only substantial requirement with conditions of earlier letters of credit caused plaintiff to act in reliance on the anticipation that the bank would not suddenly insist on exact and precise requirements with the conditions of the credit. While the bank can impose conditions in the credit and demand complete compliance with them, it cannot, in a series of dealings based upon credits, arbitrarily select those credits which must conform to the requirements therein stated and those which may be paid without complete compliance. If it chooses to demand complete compliance with the stated conditions at a later date, its future intent should and must be conveyed in time for the beneficiary to comply therewith. The record discloses only that, upon plaintiff’s calling the bank, it conveyed the information that it had not received the documentation. At no time did it notify plaintiff the documentation did not comply with the terms of the credit, and we hold plaintiff was fully justified in assuming that the documents timely delivered b.y him were sufficient to justify payment as they had in the past.

Defendant’s final contention is ancillary to its argument that plaintiff did not supply a sight draft. It argues that a substantial discrepancy existed between the terms of the credit and the bill of lading which plaintiff furnished from Accurate Perforating Company, Inc. This bill of lading referred to “aluminum punchings”, while the letter of credit referred to “aluminum scrap.” The employee of the bank who handled the transaction testified that upon receiving the bill of lading describing aluminum punchings she contacted International Metals’ principal, Sol Sieger, who informed her the two items were different and demanded she refuse to honor plaintiff’s demand under the credit. Assuming the truth of this statement, the opinion of the principal is not binding upon the defendant because the nature of a letter of credit requires that the bank make an independent determination based upon the face of the documents presented to it and not upon the underlying transaction.

The vast majority of the jurisprudence concerned with letters of credit, particularly prior to the Uniform Commercial Code, came from the state of New York. The portion of the Uniform Commercial Code adopted in Louisiana pertaining to letters of credit retains the New York rule that when reasonable doubt exists whether documents conform with the requirements of a letter of credit, the issuing bank has a defense against either the customer or the beneficiary, if it honors or dishonors the draft or demand for payment provided the bank acts “within reason.”

However, the bill of lading from Accurate Perforating Company leaves grave doubt whether defendant acted within reason by dishonoring the letter of credit because plaintiff delivered “aluminum punchings.” The bill of lading should show to a reasonable man that the object of the sale to International Metals was an accumulation of remnants left over after holes had been punched in aluminum. We cannot conceive of a clearer definition of “aluminum scrap” than remnants from punching holes in aluminum.

The letter of credit purports to incorporate the provisions of the Uniform Customs, and Practice for Documentary Credits presented by brochure No. 222 of the International Chamber of Commerce. Brochure No. 222 has been superseded by brochure No. 290, revised April, 1975. Article 8 of the Uniform Customs and Practice brochure indicates that if the issuing bank considers the documents do not on their face appear to be in accordance with the terms and conditions of the credit, the bank may, after a reasonable time, make a claim toward dishonor of the draft. However, if a claim is to be made, the issuing bank must, without delay, inform the beneficiary by cable or other expeditious method, and such notice must state that the documents are being sent to the beneficiary or are being held at its disposal. Moreover, Article 8(f) provides that if the issuing bank fails to return the documents, it shall be precluded from claiming that the payment, acceptance, or negotiation was not effected in accordance with the terms and conditions of the credit.

The Uniform Customs and Practice brochure was not introduced into evidence, but we doubt whether it is necessary to introduce this document into evidence in view of the provisions of R.S. 10:5-102(3) quoted above. Moreover, the statutory law of Louisiana allows the issuing bank three banking days following receipt of the documents to defer honor and further provides that upon dishonor the bank may “fulfill its duty to return the draft or demand and the documents” by holding all of them at the disposal of the presenter and sending him an advice to that effect. There is no doubt the defendant did not inform plaintiff of its decision to dishonor and likewise did not return the documents to him. Taking as true plaintiff’s testimony that he placed the documents in the mail to defendant bank on July 7, he would have been able to remedy defects in the documentation by July 12, even if the bank had waited three full banking days, assuming it was not barred by estoppel from dishonoring its credit for the reasons stated above. We therefore hold the defendant did not fulfill its duty to plaintiff as set forth in R.S. 10:5-112(2), with the result that it deprived plaintiff of an opportunity to present defendant with documentation reasonably acceptable to it.

It is noteworthy that in each case cited by defendant as authority for the rule that dishonor is proper when the documentation is not in strict compliance with the terms of the credit, there was a prompt notification by the issuing bank to the beneficiary that the documentation was not acceptable and the documentation was immediately returned to the beneficiary.

For the reasons assigned, the judgment appealed from is affirmed.

AFFIRMED.

      . The defendant bank additionally filed a peremptory exception based on the fact that the letter of credit was addressed to United Bank of Denver, and not the plaintiff. The record does not disclose any disposition of this exception, and the evidence adduced at trial indicates the plaintiff requested the credit to be executed in this manner since United Bank of Denver was his bank. We consequently conclude the exception was abandoned by defendant.

      . A witness formerly employed by International Metals testified “aluminum punchings” furnished by plaintiff were scrap aluminum as required by the letter of credit.

      . There is very little jurisprudential law on the subject in Louisiana.

      . See Comment to R.S. 10:1-101.

      . R.S. 10:5-103(l)(a).

      . R.S. 10:5 — 103(l)(b).

      . R.S. 10:5 — 103( 1 )(g).

      . R.S. 10:5 — 103( 1 )(d).

      . R.S. 10:5-105.

      . R.S. 10:5-106(l)(b).

      . R.S. 10:5-106(2).

      . R.S. 10:5-114(1).

      . R.S. 10:5-114(2)(a).

      . R.S. 10:5-114(2)(b). Under these circumstances, the bank’s customer may apply to a court of competent jurisdiction to enjoin honor of such a draft or demand. Id.

      . Sisalcords do Brazil, Ltd. v. Fiacao Brasileria de Sisal, S.A., 450 F.2d 419, cert. denied 406 U.S. 919, 92 S.Ct. 1771, 32 L.Ed.2d 118.

      . See Vivacqa Irmaos, S.A. v. Hickerson, 193 La. 495, 190 So. 657.

      . Bank of America v. Whitney Central National Bank, 291 F. 929, cert. denied 264 U.S. 598, 44 S.Ct. 331, 68 L.Ed. 869.

      . R.S. 10:5- 103(l)(a).

      . The record is unclear as to whether defendant issued plaintiff letters of credit on two or three previous occasions.

      . Failure of consideration is not a defense to non-payment to a beneficiary under an established letter of credit. R.S. 10:5-105, supra, note 9.

      . 48 A.D.2d 811, 370 N.Y.S.2d 4.

      . R.S. 10:5-109(2).

      . See R.S. 10:5 — 103(l)(a).

      . R.S. 10:5-101 through 5-117.

      . See Fred Miller Brewing Co. v. Ascension Ice Co., 128 La. 779, 55 So. 369; Westenberger v. State, Department of Education, La.App., 333 So.2d 264; United States Rubber Company v. Ball, La.App., 153 So.2d 203; Phillips v. Mid-Continent Life Insurance Company, La.App., 130 So.2d 791; and Carpenter v. Madden, La.App., 90 So.2d 508.

      . See note 2, supra. The lower court also had the benefit of testimony of a former employee of International Metals who explained aluminum punchings and aluminum scrap are the same thing.

      . Schlessinger, 3 N.Y. State Law Revision Commission, 1955 Report 1634-1635 cited in White and Summers, Handbook of the law under the Uniform Commercial Code 622-623. See text accompanying Note 17, supra.

      . See text after note 23, supra.

      . R.S. 10:5-112.

      . See Courtaulds North American, Inc. v. North Carolina National Bank, 528 F.2d 802 (4th Cir.); Banco Espanol de Credito v. State Street Bank & Trust Co., 266 F.Supp. 106 (D.C. Mass.); Marine Midland Grace Trust Co. of New York v. Banco del Pais, S.A., 261 F.Supp. 884 (D.C.N.Y.).


source: Caselaw Access Project

license: Public Domain

text:
    Anna L. JOSEPH v. DEPARTMENT OF HEALTH.
    No. 10928.
    Court of Appeal of Louisiana, Fourth Circuit.
    Sept. 19, 1980.
    Rehearing Denied Nov. 17, 1980.

      Gertler & Gertler, M. H. Gertler, New Orleans, for plaintiff-appellee.
    Michael A. Starks, Deputy City Atty., and Salvador Anzelmo, City Atty., New Orleans, for defendant-appellant.
    Before SAMUEL, REDMANN and SCHOTT, JJ.
   SAMUEL, Judge.

Plaintiff, who had permanent status in the classified civil service and who was a licensed practical nurse employed by the Department of Health for the City of New Orleans, was involved in a fight with another employee on August 10, 1978. Two days later she received written notice of dismissal from Helen Stanwood, the acting director of the Department, for deviation from professional behavior, inability to get along with certain co-workers, engaging in violence on the job, and prior physical violence during on the job arguments on March 22, 1976.

Plaintiff appealed to the Civil Service Commission which, after a hearing, revoked the dismissal and reduced the disciplinary action to a three day suspension. The defendant has appealed from that ruling.

The incident which sparked the dismissal occurred in New Orleans at the Health Center office on Earhart Boulevard. Mrs. Hattie Green, a health aide, was seated at her desk doing paper work. Plaintiff was standing behind Mrs. Green’s desk speaking with Mrs. Patricia Delaune, a team leader of the home service, who was seated at her own desk.

Mrs. Green pulled open her desk drawer to get a clipboard, striking plaintiff on the leg (accidently, according to her version of the incident; deliberately, according to plaintiffs version). Plaintiff immediately and intentionally pushed the drawer closed on Mrs. Green’s arm, starting a heated argument between the two women.

Mrs. Delaune, trying to calm down the participants, suggested they step outside and discuss their differences in Mrs. Johnson’s (the supervisor’s) office. With Mrs. Delaune leading the way, the three women started to leave, but a shoving match ensued. Mrs. Delaune continued to Mrs. Johnson’s office while the two other parties engaged in a fight. The fight obviously was extremely disruptive; the record contains testimony that an office chair was thrown, the two women were “scratching and clawing” each other, and verbal insults were made by plaintiff. It was broken up by Mrs. Johnson who arrived in the office to find plaintiff seated in a chair kicking and Mrs. Green standing.

The women then proceeded to Mrs. Johnson’s office where each gave her version of the incident, along with Mrs. Delaune and Coleen Rapier, a staff nurse who also was present at the time of the fight. Mrs. Johnson reported to the acting director who, after considering the incident and reviewing plaintiff’s previous personnel records, dismissed the plaintiff.

Following the hearing the Commission made the following findings and reached the following conclusion: Appellant was involved in a fight on August 10, 1978 but the testimony was conflicting as to who was the aggressor; the evidence was not convincing about appellant’s inability to get along with others; with the exception of physical contact with Mrs. Green on August 10, and a previous incident involving a Mrs. Smith, appellant apparently had no compatibility problems with workers or patients; the evidence failed to establish appellant was at fault or disciplined with respect to the previous fight; and, accordingly, the department failed to carry its burden of proof. It was of the opinion appellant should be disciplined for her involvement in the incident of August, 1978 but dismissal was too severe and should be reduced to a three day suspension.

The legal basis for any change in a disciplinary action can only be that sufficient cause was not shown by the appointing authority. The protection of civil service employees is only against firing or other discipline without cause. This protection arises from La.Const. Art. 10, § 8(A), which reads:

“No person who has gained permanent status in the classified state or city service shall be subjected to disciplinary action except for cause expressed in writing. A classified employee subjected to such disciplinary action shall have the right of appeal to the appropriate commission. The burden of proof on appeal, as to the facts, shall be on the appointing authority.” (Emphasis ours).

To paraphrase what this court said in Branighan v. Department of Police : The appointing authority (here the Director of the Department of Health) is charged with the operation of her department. She is the one who must run the department, an obviously necessary part of which is dismissing or disciplining employees. While she may not do so without cause, she may, and indeed must, within the exercise of sound discretion, dismiss or discipline an employee for sufficient cause. The Commission is not charged with such operation or such disciplining.

Our examination of the record convinces us that the appointing authority dismissed the plaintiff for sufficient cause and has carried its burden of proof.

Although the evidence is conflicting as to who may have been the aggressor in the fight, it is clear that both altercations resulted from plaintiff’s failure to get along with her co-workers on at least those two occasions. She had complained about some of her co-workers to other co-workers and, according to her own testimony, the animosity between Mrs. Green and herself preceded the second altercation by at least a month. As to the previous fight between plaintiff and Mrs. Smith, which occurred while plaintiff was on duty at Charity Hospital, the language and conduct of plaintiff in that fight was such as to disrupt the clinic and hospital patients. We note the Department transferred plaintiff as a result of that first fight and gave her a second chance to show she could refrain from such behavior.

In our view, the Commission was overly concerned with who was the aggressor in the two fights. As suggested by the defendant in its brief, the Department of Health cannot function efficiently if physical altercations among its employees take place during working hours in the office or in the hospital. Such disruption of the office and the hospital constitutes conduct prejudicial to the service and presents sufficient cause to warrant dismissal. In this case the Commission was without authority to substitute its judgment for that of the appointing authority.

For the reasons assigned, the decision of the Civil Service Commission is reversed and plaintiff’s appeal to the Commission is dismissed at her cost.

REVERSED.

      . La.App., 362 So.2d 1221, 1223.


author: MARVIN, Judge. HALL, Judge

text:
    Shirley McNAMARA, Secretary, Department of Revenue and Taxation, State of Louisiana, Plaintiff-Appellant, v. U. O. P., INC., Defendant-Appellee.
    No. 14267.
    Court of Appeal of Louisiana, Second Circuit.
    Sept. 22, 1980.
    En Banc. Rehearing Denied Oct. 30, 1980.

      Raymond L. Simmons, Baton Rouge, for plaintiff - appellant.
    Blanchard, Walker, O’Quin & Roberts by J. Edgerton Pierson, Jr. and William Paul Lawrence, II, Shreveport, for defendant-appellee.
    Before HALL, MARVIN and FRED W. JONES, JJ.
   MARVIN, Judge.

In this appeal we determine what sales and use taxes, if any, are owed the State for several million dollars worth of precious metals which are combined with other materials by a manufacturer in Louisiana to create catalysts that are used worldwide by petroleum refineries to produce high octane fuel. L.R.S. 47:301 et seq.

The refining process, known as catalytic reforming, is licensed to refiners by UOP under the name of plat forming. Platinum is the primary and most expensive of the metals which are combined with an aluminum oxide base to create catalysts. Some catalysts also contain either or both the less expensive precious metals, rhenium and oc-tenite. Octenite is a trade or code name for a metal or metallic compound, the composition of which is a trade secret.

Platinum comprises only about V20 of the catalyst but costs from 7 to 20 times more than the other materials in the catalyst. Rhenium and octenite are much less expensive metals and when used in the catalysts, their cost is approximately equal to the cost of the other material, excluding platinum. Platinum producers sold a troy ounce of platinum for about $22 in 1958 and for about $380 in November 1979. At all times the spot market price was from 10 to 40 percent higher. The period during which the State audited the defendant manufacturer, UOP, was 1972 through 1974. The average cost of platinum during the three - year period was $148 per ounce. For clarity, wé discuss the circumstances as if platinum were the only precious metal contained in the catalysts.

The catalyst is not consumed in the refining process, but loses its effectiveness in about three years. Spent catalyst is returned by the refiner to the manufacturer in Louisiana where about 99 percent of the platinum is recovered. UOP charges a per-pound recovery charge to its customers. The recovered platinum is then combined with new material and is made into fresh catalyst.

When the price of platinum was stable and relatively low, UOP owned more than 100,000 troy ounces which it used as any other raw material. The price of the catalyst charged the customer included the platinum in the catalyst. When the price of platinum soared in the 1960s, UOP succeeded in shifting the market risk of the platinum to each of its customers who became contractually obligated either to supply to UOP, or to authorize UOP to purchase for the customer’s credit, the precious metal needed to produce catalyst to supply that customer’s demand. UOP purchases platinum from producers for the account of each of its customers. A customer may direct UOP to sell platinum credited to that customer’s account. The customer pays UOP a $1.50 per ounce service charge when UOP sells or purchases platinum for that customer.

UOP maintains extensive records which project the demand for its catalyst. Each customer has a stock account which is debited or credited as the circumstances require when new metal is acquired or sold for the customer and when metal is either delivered in fresh catalyst to, or is recovered from spent catalyst returned by, the customer.

If there is a deficit in a customer’s platinum stock account, UOP charges a rent or lease charge (called a turnaround charge) to that customer for platinum contained in the catalyst shipped to that customer until such time as that customer fulfills its contractual obligation to supply the precious metal to UOP. The deficit is usually satisfied by the return of spent catalyst to UOP by the customer. Larger UOP customers such as Shell and Texaco usually have a credit in their platinum stock accounts while smaller refiners sometimes have a deficit. The turnaround (rent) charge for the platinum ($4.50 per ounce, raised to $5.50 in 1974) is for 35 days. If the customer’s account still shows a deficit after this period, a percentage of the turnaround charge is imposed daily until the customer makes up the deficit either by the return of spent catalyst or by authorizing UOP to purchase for its account, new platinum. If the deficit exists for 90 days, UOP is empowered by the contract to purchase new platinum and to charge the customer.

The number of ounces involved in turnaround charges during the audit period averaged slightly more than 50,000 ounces a year. One percent of this amount (500 ounces a year) is lost in the recovery process. UOP purchases more than 500 ounces of platinum each year because of customer demand and to avoid eventual depletion of the platinum available to UOP for the manufacture of catalysts.

During the audit period, UOP acquired for 44 customers about 91,000 troy ounces of platinum at an average cost of about $150 per ounce ($13,650,000 value). For manufacturing and reprocessing purposes, UOP considers that it “owns” all of the platinum subject to the “drawing rights” of its customers with platinum stock account credit balances. We deduce from this record that UOP received each year of the audit period at its Louisiana plant spent catalyst containing about 120,000 ounces of platinum, about 50,000 ounces of which was credited to UOP’s own platinum account. We estimate that approximately 1,200 ounces (one percent) was lost in the recovery process.

Ownership of the platinum is reflected by the accounting records at the UOP home office in Illinois and it is not possible to identify any quantity of platinum as being “owned” by a particular customer until fresh catalyst is labeled for shipment or spent catalyst is received from a customer by UOP. The platinum at UOP’s disposal is in Louisiana, in Illinois, and in new platinum stock accounts of suppliers who are primarily located in New Jersey. The great bulk of the platinum at UOP’s disposal is physically contained in the fresh or spent catalyst and in chloroplatinic acid which is used to make the catalysts. All UOP platforming catalysts are made and recycled in the Louisiana plant while chloroplatinic acid is made outside Louisiana. A customer’s order for catalyst is usually filled in Louisiana and is shipped by rail and other common carrier throughout the world.

In our composite illustration of the several transactions in question, C, the UOP customer, is a refinery outside Louisiana, with a credit balance in its platinum stock account of only 50 ounces. C orders 20,000 lbs. of fresh catalyst and eventually returns 16,000 lbs. of catalyst. C’s platinum stock account is adjusted and the deficit is eventually satisfied by UOP purchasing, for C, new platinum. Drum deposit charges, turnaround charges, recovery charges, and a per-ounce service charge on the purchase of new platinum are illustrated in the composite invoice:

1/ 1/73 (Balance in C's platinum stock account: 50 oz.)
20,000 lbs. catalyst shipped at $3.00 per pound $60,000.00
Platinum turnaround charge on 950 oz. at $4.50 4,275.00
(1,000 oz. platinum, less credit of 50 oz. in platinum stock acct.)
Drum charge, 89 at $8.00 each 712.00
2/ 5/73 Return of 16,000 lbs. spent catalyst (containing 800 oz. platinum)
Recovery charge, $.95 per pound of catalyst $15,200.00
C's platinum stock account credited with 792 oz. platinum recovered (1% shrinkage in recovery). (Deficit in account redued to 158 oz.)
Credit for 71 drums returned at $8.00 per drum (568.00)
2/15/73 Purchase by UOP for C of 500 oz. platinum at $150 per ounce $75,000.00
$1.50 per ounce service charge 750.00
Platinum stock account credited with 500 oz., bringing balance to 342 oz. credit.
Daily percentage turnaround charge on deficit of 158 oz. for 2/5/73 to 2/15/73 (Vioo x 10 days x $4.50 x 158) 71.10

Under UOP’s earlier method of doing business, UOP’s Louisiana customer would have owed a sales tax on the price of the catalyst (including the platinum it contained), even though the catalyst was not consumed in the refining process. Under UOP’s present method of doing business, UOP’s Louisiana customer would be charged by UOP with the sales tax on the price of the catalyst, excluding the value of the platinum contained in the catalyst. The Louisiana customer would then owe a use tax on the cost price of the customer’s platinum in the catalyst. This record reflects that a Texaco refinery in Louisiana was treated in this manner by the State taxing authority. UOP suggests this is the correct method of taxing UOP’s present way of doing business. The out-of-state customer in many states would owe that customer’s resident state a use tax on the cost price of the fresh catalyst installed in a refinery and this price would include the cost of the platinum in the catalyst, according to UOP. Our review of the Louisiana statute and of cases interpreting sales/use tax statutes leads us to generally agree with this concept, subject to these comments.

In Traigle v. P. P. G. Industries, Inc., 332 So.2d 777 (La.1976), P.P.G. periodically purchased carbon graphite blades which were used as anodes in the electrolytic manufacture of chlorine gas from seawater. The blades, are replaced from time to time as they were consumed in the process, although the carbon element of the blades, except for minute inconsequential traces found as impurities, did not become an integral part of the manufactured gas. The Supreme Court held that the general purpose and the statutory scheme of the Louisiana sales/use tax is to impose the tax upon the ultimate consumer of the particular product purchased. 332 So.2d at 780, 783. P.P.G. was there held to be the ultimate consumer of the graphite blades and responsible for the tax because the blades were used up in the manufacturing process and their carbon content did not become an integral part of the end product. They were not purchased either for the statutory purpose of resale in the form of tangible personal property or for further processing into chlorine. 332 So.2d 782.

The statutory scheme derived in P.P.G. Industries, Inc. is further supported by declarations in the statute:

“It is not the intention of this Chapter to levy a tax upon articles of tangible personal property imported into this state, or produced or manufactured in this state, for export; nor is it the intention of this Chapter to levy a tax on bona fide interstate commerce. It is, however, the intention of this Chapter to levy a tax on the sale at retail, the use, the consumption, the distribution, and the storage to be used or consumed in this state, of tangible personal property after it has come to rest in this state and has become a part of the mass of property in this state.” L.R.S. 47:305(5)
“There shall be no sales tax due upon the sale at retail of tangible personal property purchased within Louisiana for use exclusively beyond the territorial limits of Louisiana. If tangible personal property purchased tax free under the provisions of this Section is later brought into Louisiana for use herein the property shall be subject to the Louisiana use tax as of the time it is brought into the state for use herein, subject to the credit provided in R.S. 47:303(A).” L.R.S. 47:305.10

The tax in question is levied by § 302 of the statute in these terms: bution, and the storage for use or consumption in this state, of each item or article of tangible personal property, as defined herein . . .

“A. There is hereby levied a tax upon the sale at retail, the consumption, distri-
“(1) At the rate of two per centum (2%) of the sales price of each item or article of tangible personal property when sold at retail in this state; . . . “(2) At the rate of two per centum (2%) of the cost price of each item or article of tangible personal property when the same is not sold but is used, consumed, distributed, or stored for use or consumption in this state; provided there shall be no duplication of the tax.

“B. There is hereby levied a tax upon the lease or rental within this state of each item or article of tangible personal property, as defined herein . . .

“(1) At the rate of two per centum (2%) of the gross proceeds derived from the lease or rental of tangible personal property, as defined herein, where the lease or rental of such property is an established business, or part of an established business, or the same is incidental or germane to the said business. “(2) At the rate of two per centum (2%) of the monthly lease or rental price paid by lessee or rentee, or contracted or agreed to be paid by lessee or rentee to the owner of the tangible personal property.”

The statute defines many of its terms in § 301, including sale (12), sale at retail (10), dealer (4), lease or rental (7), storage (15), use (18), and use tax (19). What may be a sale by the broad definition of § 301(12) may not be a taxable sale at retail under § 301(10). The regulations promulgated by the State, numbered to correspond with the statute, are also express on this point. See Regulations, Arts. 47:301(9), (10), (11), and (12) of La. Dept. of Revenue and Taxation, June 1, 1979.

The term sale at retail does not include a sale of material which will be further manufactured or processed into an item or an article of tangible personal property intended to be later sold at retail. See L.R.S. 47:301(10).

If an item or an article is not sold at retail in the state, the tax is imposed when the item or article is used, consumed, distributed, or stored for use or consumption within the state. § 302(A). The lease or rental of property and the use of the property by the lessee in the state subjects that transaction to the tax. § 302(B), § 301(7). See also § 305(5), Central Marine Service, Inc. v. Collector of Revenue, 162 So.2d 81 (La.App. 4th Cir. 1964), writ refused.

If property is kept in the state for any use or consumption here, a purpose other than the sale at retail out of state, the cost price (§ 301(3)) is taxable here (§ 302(A)(2)).

If a sale of property here is not taxable because it is sold for use or consumption out of state, a later use or consumption of that property in Louisiana will be subject to the use tax. § 305.10.

A sale of raw material which is to become an integral part of a manufactured article that is to be later sold at retail is not subject to the sale or the use tax. The raw material becomes an integral part of the article to be sold at retail, the cost price or sales price of that raw material is theoretically incorporated into the sales price of the article, and the tax will be collected or paid when that article is later sold or used in Louisiana. The tax will be levied not upon the manufacturer, but upon the retail purchaser, user, consumer, as the case may be, of the manufactured item. Conversely, when a thing or a raw material is purchased here or is used or consumed here by a manufacturer in the manufacturing process, and that thing does not become an integral, beneficial part of the manufactured item, the manufacturer is the ultimate retail purchaser, user, consumer, as the case may be, and is obligated to pay the sales or use tax. P. P. G. Industries, Inc., supra.

UOP purchases platinum on the world market for itself or its customers and then only to maintain a supply of raw material for its catalyst manufacturing process. UOP is not engaged in the business of buying or selling platinum at retail. We hold then that no sales tax is owed when UOP purchases platinum under these circumstances

When fresh catalyst is sold at retail to a refinery in Louisiana the sales/use tax should be levied on the transaction.

The customer with a refinery in Louisiana may have refineries elsewhere and may or may not have a credit in its platinum stock account sufficient to cover the catalyst which is shipped by UOP to the Louisiana refinery. If the customer with a refinery in Louisiana has a deficit platinum stock account, the customer pays UOP for the platinum in the catalyst under the lease turnaround provisions of the UOP contract until such time as the deficit is erased by the purchase of platinum on the world market. This transaction is subject to the Louisiana tax. The catalyst has a sales price, excluding platinum, which may be determined. The cost price, and lease price, if applicable, of the platinum may also be determined. UOP is a dealer in the transaction and, as such, is responsible for collection of the tax. Regulations Art. 47:301(4), supra.

When fresh catalyst is sold at retail by UOP to a refinery outside Louisiana, the thing is sold for use outside the state and no sales tax is owed. § 305(5), § 301(10). No lease or rental occurs within this state and no lease/rental tax is owed. § 302(B), § 301(7).

When newly purchased platinum or platinum in spent catalyst is received at the UOP plant in Louisiana, the application of the taxing statute is not as easily resolved. Once the platinum stock accounts are adjusted in accord with the circumstances of the particular transactions, it is not possible to identify who owns what platinum in spent catalyst, in fresh catalyst, or in chlo-roplatinic acid, at the UOP Louisiana plant. This tangible personal property (platinum) has come to rest in this state and has become a part of the mass of property in this state. § 305(5). It is to be used as a raw material for manufacture into catalyst, some of which is intended for sale and use in this state.

Further compounding the problem is the fact that the catalyst is not consumed either in its use in the refinery or in the manufacturing process at the UOP plant. Platinum is, however, partially consumed or lost (approximately 1%) in the recovery process at the Louisiana plant. The platinum becomes an integral, beneficial part of the manufactured item (catalyst) and is not consumed in the manufacturing process. The recovery process is not integrated with the manufacturing process as we understand the testimony, but is a separate process. To a limited extent, UOP, in the recovery process, is the ultimate consumer of approximately one percent of the platinum. The platinum lost is eventually replaced, usually by UOP purchasing platinum for the account of a customer. We cannot overlook, however, that UOP purchased for itself approximately 500 ounces of platinum each year of the audit period to cover its shrinkage in the 50,000 ounces of UOP platinum involved each year in lease turnaround transactions in order to maintain its platinum stock account at 52,000 ounces.

The trial court held that the only platinum subject to the tax was platinum contained in a catalyst shipped to a Gulf refinery in Louisiana in 1972 on which UOP was paid a lease turnaround charge. The trial court’s judgment levied the tax on the then cost of that platinum (3,008 ounces at about $60 per ounce, or $180,000).

The State appealed and UOP answered the appeal. The correctness of the judgment, which both litigants assert is in error, and the issues on the contemporaneous construction bar and the liberative prescription of Art. 7, § 16, La.Constn., require our consideration.

The State generally contends that UOP owes a sales or use tax on the platinum that it purchases (presumably for itself or for another) and keeps in Louisiana for rent or lease (State’s Issue 1) and on the platinum in its custody in Louisiana which it uses to manufacture catalyst (State’s Issue 2).

UOP contends that no sales tax is owed on its sales of catalyst, or on leases of platinum in catalyst, which is used in refineries outside Louisiana, that no use tax is owed by UOP on the “use” of its, or of a customer’s, platinum in the manufacturing process, simply because no taxable use occurs here for the reason that all platinum is integrated in the manufacturing process as a raw material into the fresh catalyst. UOP contends that this is an exempted “use under the § 301(10) definition of retail sale and under § 305(5).

“The term ‘sale at retail’ does not include sales of materials for further processing into articles of tangible personal property for sale at retail, nor does it include an isolated or occasional sale of tangible personal property by a person not engaged in such business.” L.R.S. 47:301(10), in part.
“It is not the intention of this Chapter to levy a tax upon articles of tangible personal property . . . manufactured in this state, for export ...” L.R.S. 47:305(5) Our emphasis.

The intent of the statute is clearly expressed and its numerous sections are broad enough to accomplish its stated purpose to levy a tax on

the sale at retail,
the use,
the consumption,
the storage for use or consumption,

within this state, of tangible personal property after it has come to rest in this state and has become a part of the mass of property in this state. § 305(5).

Also pertinent is the L.R.S. 47:301(12) definition of sale and its corresponding regulation. The regulation (Art. 47:301(12)) reads in part:

“Whenever the title to or possession of property is exchanged or transferred by one person to another for a consideration, the transaction constitutes a sale for purposes of this act, even though the transfer is made on a conditional basis. The form of consideration is not a material factor. In the case of a person engaged in the business of fabricating materials into tangible personal property, the entire process for completing the finished product, including the fabrication labor, constitutes a sale. Similarly, if a person engaged in the business of fabricating materials into tangible personal property uses materials furnished by the person for whom the work is being performed, the fabrication of the materials is included in the definition of sales.
“If a person prepares, furnishes, or serves tangible personal property which is consumed on his premises, those activities, i. e., the furnishing, the preparation, and the serving constitutes a sale for purposes of this act, whether billed as one item or billed separately. If the property is not consumed on the preparer’s premises, preparing or serving is not a part of the ‘sale’ under this act, if and only if, a separate charge is made for the preparation and serving.”

Unlike Texas, Louisiana has not exempted the sale or use of catalyst from the tax. We are required to determine legislative intent from the entirety of the statute and to apply it to the circumstances of this case. The aim of all of the principles of statutory construction is to ascertain the legislative intent. A fair and reasonable construction is required and it is only when reasonable doubt arises about the application of the statute that we are required to construe it in favor of the taxpayer. P.P.G. Industries, Inc., supra.

Our consideration of the entirety of the statute leads us to the conclusion reached in P.P.G. Industries. The State intends to tax only the transaction which results in the ultimate use or consumption, or in the storage for ultimate use or consumption, in this state of tangible personal property.

The acquisition of raw material which will be manufactured into an item intended for sale at retail is not a taxable transaction, notwithstanding from whom or by whom the raw material is acquired. Here the raw material is platinum and the item intended for sale at retail is the catalyst.

Some waste or shrinkage occurs when any raw material is manufactured into an item to be sold at retail and we are not concerned in this case with the one percent loss of platinum in the recovery process being a taxable consumption in this state. The ultimate transaction in this case is the sale, use, or lease for use, within this state, of the manufactured catalyst and the platinum which it contains. This is the transaction which the statute is designed to tax. P.P.G. Industries, Inc.

We hold then that when UOP delivers catalyst to a refinery in this state, UOP is obligated as a dealer to collect from the transferee of the catalyst and to pay to the State, the sales, use, or lease tax on the transaction, as this case may be. The basis upon which the tax shall be levied, of course, shall vary as the individual transaction varies under the UOP method of doing business.

The result of the UOP method of doing business, as we understand it, is that at some time a Louisiana refiner will acquire platinum to satisfy its deficit platinum stock account. This acquisition of platinum, as tangible personal property defined by the statute, occurs when the catalyst containing the platinum is shipped to that refinery. Before the platinum deficit is erased, that refinery will be paying, in addition to the sales price of the platinum, a price for the use of the platinum in the catalyst. Whatever the transaction within this state, the Louisiana refiner will owe a tax which can be determined at some time. The total cost to the Louisiana refinery, including recovery and service charges, lease turnaround charges, and the cost price of new platinum, should be considered in determining the total cost of a particular load of catalyst to a Louisiana refinery. The statute is broad enough to allow the total cost of catalyst to the Louisiana refinery to be taxed and to allow for whatever credits might be permitted under the statute. The statute expressly provides that there shall be no duplication of the tax. § 302(A)(2).

Our intended result is that UOP shall be responsible as dealer to collect the tax from its Louisiana customer when the manufactured item (catalyst) is transferred to that customer.

THE CONTEMPORANEOUS CONSTRUCTION BAR

UOP shows that the State has periodically audited the UOP transactions since about 1960 and has not contended until this assessment was levied in 1976, that any taxes were owed by UOP. It has been recognized that an administrative contemporaneous construction for over two decades is indicative of legislative intent and may be given substantial and sometimes decisive weight. See P.P.G. Industries, supra, and cases cited therein. That case, however, squarely held that an administrative contemporaneous construction cannot have weight where such construction is inconsistent with the statute. 332 So.2d 782. We consider the square holding authoritative. The intent of the entire statute (chapter) as declared in § 305(5) is not ambiguous and the several sections of the statute, when construed in the light of that declaration, are not ambiguous.

THE PLEA OF LIBERATIVE PRESCRIPTION

UOP’s plea of liberative prescription is founded upon the premise that UOP had more than 60,000 oz. of its own platinum involved in turnaround transactions in 1967 (more than three years before the 1972-1974 audit period). UOP argues that any sales or use taxes even on the 3,008 oz. of its platinum allegedly used in Louisiana in the Gulf refinery lease turnaround transaction in 1972 had prescribed because the entirety of its platinum (more than 60,000 oz.) had been in Louisiana and had been used here in the manufacture of catalysts in 1967. This argument is not tenable, however, to a § 302(B) “lease” within this state or to a deferred “sale” that occurs during the audit period. See Collector of Revenue v. F. & H. Equipment Company, 119 So.2d 631 (La.App.2d Cir. 1960).

Accordingly, we find without merit UOP’s contentions relating to the liberative prescription and to the contemporaneous construction bar.

CONCLUSION

The trial court was not in error in taxing the platinum involved in the 1972 lease turnaround transaction between UOP and a Gulf refinery in Louisiana. The tax was imposed, however, on the “cost price” of the UOP platinum upon the theory that this constituted a “use” of the platinum by UOP in Louisiana. When the total cost of the catalyst, including the platinum, is determined, that cost may be more or less than the price UOP paid for that platinum. We will therefore reverse the judgment of the trial court to allow the tax to be levied on whatever the total cost of the catalyst was to Gulf.

We reverse the judgment of the trial court and remand for further proceedings for the taking of further evidence to allow the trial court to determine what taxes are owed for the audit period in accord with this opinion. Costs are assessed one-half to each litigant,

REVERSED AND REMANDED.

HALL, Judge

(concurring).

I concur in the remand of this case for further proceedings.

UOP is in the business of manufacturing and selling catalyst, which is made up of precious metals and other components. All of the transactions involved in this case arise out of written contracts between UOP and its customers for the sale of catalyst.

Regardless of whether UOP buys platinum for its own account or that of a customer, whether the customer pays UOP for the cost of the platinum before or after catalyst is delivered to the customer, whether there is a so- called lease or turnaround charge made, whether the customer returns spent catalyst to UOP, and regardless of the other variables involved in these transactions, there is simply a sale of catalyst, including the precious metals contained therein, for a price which includes the cost of the platinum contained therein and the service charge, if any, made in connection with the acquisition of the platinum. The price also includes the turnaround charge where applicable, this being nothing more than an additional charge made under the circumstances of those sales where the customer complies with its contractual obligation to supply platinum to UOP after delivery of catalyst to it rather than before delivery.

The crediting of a customer’s platinum stock account with a certain quantity of platinum and payment by the customer of the cost of the platinum, plus a service charge, does not amount to a sale of tangible personal property in Louisiana. Such transactions are made pursuant to the contract in connection with orders for catalyst, and amount to prepayment for the platinum contained in the load of catalyst ordered. No platinum located in Louisiana can be identified as belonging to a customer until catalyst is delivered to a common carrier at the UOP plant. Contrary to the State’s contention, there is no use of platinum by the customer in Louisiana prior to the use of the catalyst at the refinery. Consequently, there is no sales or use tax due by the customer prior to delivery of the catalyst to the customer.

Also contrary to the State’s contention, there is no tax due on UOP’s use of platinum in Louisiana. All platinum brought into the state by UOP is used in the manufacture of catalyst to be sold at retail, and is exempt under LSA-R.S. 47:301(10). The so-called lease or turnaround transactions are not leases at all, but are sales of catalyst with an additional charge incidental to the sale. Every so-called lease or turnaround transaction results in a sale and transfer of title to the catalyst, including the platinum. There is authority for looking through a transaction labeled as a lease and determining that it is in fact a sale for sales tax purposes. See Lee Const. Co. v. L. M. Ray Const. Corp., 219 La. 246, 52 So.2d 841 (1951) and Collector of Revenue v. F & H Equipment Company, 119 So.2d 631 (La.App.2d Cir. 1960). It follows that no platinum is held in Louisiana by UOP for lease to customers so as to subject UOP to a use tax.

All sales of catalyst shipped out of state are exempt from sales tax since the sales are in interstate commerce. LSA R.S. 47:305(5).

All sales of catalyst shipped to refineries in Louisiana are subject to sales tax. The sales price includes the price of the catalyst as shown on UOP’s invoice (which does not include the value or cost of the platinum), plus the cost price of the platinum, plus the turnaround charges if applicable, and plus any other taxable charges, less any deductions or credits which are applicable under the statute and regulations.

The record does not identify the sales of catalyst to Louisiana refineries or the price figures necessary to calculate the tax due thereon. Accordingly, I concur in the remand of the case for the taking of such additional evidence as is necessary and for the determination of the tax due by the trial court.

      . Texaco, with a credit balance in its UOP platinum stock account, would pay sales taxes on the price of the catalyst, excluding the platinum. Texaco then would be using at its Louisiana refinery its own platinum in the catalyst and would owe a use tax on the cost price of the platinum. The term cost price in § 302(A)(2) is defined in § 301(3). This situation is to be distinguished from the lease turnaround transaction where the refinery owns no platinum and where the tax is imposed on the rental price or gross proceeds derived from the rental of property. § 302(B). These terms are not defined in § 301.
      In a lease situation, the ultimate taxpayer is the lessee who uses within this state the thing leased. As we later observe, this taxpayer should have the benefit of paying the lower amount of tax [e. g. rental price (§ 302(B)) vs. the cost price (§ 302(A)(2))] notwithstanding that this taxpayer uses the platinum at its refinery.
      Texas resolves the problem simply by exempting catalysts from the sales/use taxing statute of that state. Tex.Tax.-Gen.Ann. Art. 20.04(E)(1)(b). Louisiana does not exempt catalysts, but exempts drilling equipment used for oil exploitation within the state and casing, drill pipe and tubing sold in Louisiana for use offshore beyond the territorial limits of the state, for the production of minerals. See § 305.1(C), § 305.4.

      . § 301(12) provides:
      “ ‘Sale’ means any transfer of title or possession, or both, exchange, barter, conditional or otherwise, in any manner or by any means whatsoever, of tangible personal property, for a consideration, and includes the fabrication of tangible personal property for consumers who furnish, either directly or indirectly, the materials used in fabrication work, and the furnishing, preparing or serving, for a consideration, of any tangible personal property, consumed on the premises of the person furnishing, preparing or serving such tangible personal property. A transaction whereby the possession of property is transferred but the seller retains title as security for the payment of the price shall be deemed a sale.”
      § 301(10) provides:
      “ 'Retail sale’, or ‘sale at retail,’ means a sale to a consumer or to any other person for any purpose other than for resale in the form of tangible personal property, and shall mean and include all such transactions as the collector, upon investigation, finds to be in lieu of sales; provided that sales for resale must be made in strict compliance with the rules and regulations
      * * * * * *
      “The term ‘sale at retail’ does not include sales of materials for further processing into articles of tangible personal property for sale at retail, nor does it include an isolated or occasional sale of tangible personal property by a person not engaged in such business.”


author: LABORDE, Judge.

text:
    ASSOCIATED PRESS, Plaintiff-Appellant, v. TOLEDO INVESTMENTS, INC., Defendant-Appellee.
    No. 7796.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 8, 1980.

      Lowther & Boone, Robert C. Lowther, Jr., Many, for plaintiff-appellant.
    Bethard & Davis, James G. Bethard, Coushatta, for defendant-appellee.
    Before FORET, STOKER and LA-BORDE, JJ.
   LABORDE, Judge.

This appeal arises from a breach of contract case in which appellant Associated Press, was denied recovery of liquidated damages from Toledo Investments Inc. For the reasons stated below, we affirm. We hold that while liquidated damages may be recoverable for breach of an obligation to pay money, that recovery is limited to interest. We deny enforcement of the liquidated damage clause in this case as it exceeds the allowable rate of interest.

The facts are not in dispute. Associated Press is a news service corporation organized under the law of New York. Toledo Investments, Inc., a Louisiana corporation, is the owner-operator of Radio Station KWLA located in Many, Louisiana.

On January 14, 1971, Associated Press and Toledo executed a written contract, in which Associated Press agreed to provide its news service to KWLA for a weekly assessment of $58.15. The contract, executed for a five -year term with a provision for successive five-year terms, authorized Associated Press to suspend or terminate the agreement should Toledo breach its obligation to pay the assessment. Following this authorization, a liquidated damage clause was inserted. In pertinent part, it provides:

“Upon such a suspension or termination the Member [Toledo] shall be liable to AP for the total amounts which otherwise would become due to AP under this agreement . .. during the balance of the term hereof, less the expenses which AP would incur in supplying Service to the member.”

On March 22, 1974, Associated Press and Toledo executed a supplemental agreement adding audio service for an additional weekly assessment of $58.60. The supplemental agreement provided that all other terms of the original agreement remained applicable.

On February 4, 1977, Associated Press suspended all service to Toledo for Toledo’s failure to timely pay the assessments. On February 1, 1978, this suit was filed to recover $10,139.58, representing the delayed assessments owing on the date of its election to suspend service, and $19,067.66, representing the liquidated damages stipulated for in the agreement.

The trial court granted judgment against Toledo for the past due assessments in the sum of $10,139.58, plus legal interest from date of judicial demand. The trial court denied Associated Press’ claim for liquidated damages. Associated Press appeals from that part of the judgment denying its recovery of liquidated damages.

The issue on appeal is the correctness of the trial court’s denial of liquidated damages. To resolve this issue we must first decide the question of which state’s law governs the rights of the parties under the contract. Although the printed contract provides that it is governed by New York law, for the reasons given at some length below, we conclude that Louisiana law governs.

We adhere to the principle stated in Davis v. Humble Oil & Refining Company, 283 So.2d 783, 794 (La.App. 1st Cir. 1973) (on rehearing), which involved an employee’s pension plan rights under a written contract that provided it was to be governed by New York law. On rehearing, the court announced the following rule: Where parties stipulate the State law governing the contract, Louisiana conflict of laws principles require that the stipulation be given effect, unless there is statutory or jurisprudential law to the contrary or strong public policy considerations justifying the refusal to honor the contract as written.

For example in Fine v. Property Damage Appraisers, Inc., 393 F.Supp. 1304 (E.D.La. 1975), the court, considering a contract that provided it was to be governed by Texas law, invalidated those terms against whose enforcement Louisiana had expressed strong public policy reasons.

Similarly in our situation, we find a clear conflict between Louisiana statutes and New York law. Louisiana statutorily limits damages recoverable for delay in performing an obligation to pay money. Those damages are restricted to recovery of interest in order to prevent usury. LSA-C.C art. 2924; LSA- R.S. 9:3501. To the contrary, New York law makes no distinction between damages recoverable for breach of contracts to pay money and damages recoverable for breach of other contracts. Because application of New York law would violate Louisiana’s strong public policy, the law of New York cannot govern this aspect of the contract. Hence, Louisiana law governs.

Under Louisiana law, the performance of an obligation to give a sum of money is of special importance. In its contract with Associated Press, Toledo obligated itself to pay weekly assessments for news and audio services. We find this is an obligation to give a sum of money. Article 1935 of the Louisiana Civil Code establishes the basic precept that damages due for delay in the performance of an obligation to pay money are limited to interest. See Griffin v. Creditors, 6 Rob. 216 (1843). The maximum amount of conventional interest cannot exceed eight per cent. LSA-C.C art. 2924 (1980 Pocket Part). Thus, because the damages it seeks are for non-payment of money, Associated Press is limited to recovery of eight per cent interest and no more, regardless of the loss it may have suffered. Griffin cited supra and Heeb v. Codifer & Bonnabel, 162 La. 139, 110 So. 178 (1926).

We now view the liquidated damage clause to see if it meets these restrictions. Associated Press seeks recovery of all assessments which would have become due under the agreement, less the expenses it no longer need incur in supplying the services. These damages clearly exceed the eight per cent interest allowable by contract. R.S. 9:3501 provides:

“Any contract for the payment of interest in excess of that authorized by law shall result in the forfeiture of the entire interest so contracted.”

As the liquidated damage clause before us does stipulate for the payment of interest in excess of that authorized by law, the entire interest provided by the clause must be forfeited. Associated Press can recover no interest under the contract. Gordon Finance Company v. Chambliss, 236 So.2d 533 (La.App. 4th Cir. 1970). Instead, its recovery is limited to legal interest on the past due assessments, at the legal rate of seven per cent per annum from date of judicial demand until paid.

For the above reasons, the judgment of the trial court is affirmed at Appellant’s cost.

AFFIRMED.


author: STOKER, Judge.

text:
    George Allen CAIN, Plaintiff-Appellee, v. COGBURN PUMP & SUPPLY COMPANY, INC. et al., Defendants-Appellants.
    No. 7801.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 8, 1980.
    Trimble, Randow, Smith & Wilson, Alonzo P. Wilson, Alexandria, for defendants-appellants.
    Glenn B. Gremillion, Ferriday, for plaintiff-appellee.
    ■ Before FORET, STOKER and LA-BORDE, JJ.
   STOKER, Judge.

Plaintiff, George A. Cain, brought this suit against defendants, Cogburn Pump & Supply Company, Inc., and New Hampshire Insurance Company, for damages arising out of an automobile accident. The trial court held the defendants liable in the amount of One Thousand Three Hundred Seven and 05/100 ($1,307.05) Dollars with Eight Hundred Fifty-Seven and 05/100 ($857.05) Dollars being the actual cost of repairs and Four Hundred Fifty and No/100 ($450.00) Dollars being awarded for forty (40) days loss of use.

The appellant’s sole argument on appeal is that the trial court erred in awarding forty (40) days loss of use.

The testimony at trial was not recorded, as neither party requested it, but the parties entered into a joint stipulation of facts pursuant to LSA-C.C.P. art. 2131. The stipulation does not appear in the record but a joint stipulation signed by counsel for both parties is incorporated in appellants’ brief. The stipulation reads as follows:

“JOINT STIPULATION
That only two witnesses testified with regard to the damages to the plaintiff’s automobile. Bill Wilson testified that in his opinion the cost of repairs would be ONE THOUSAND NINETY SEVEN AND 05/100 ($1,097.05) DOLLARS as reflected in his estimate of repairs which was introduced as plaintiff’s Exhibit Number 15. Albert Hester testified on behalf of the defendants that the cost of repairs would be SEVEN HUNDRED TWENTY NINE AND 79/00 ($729.79) DOLLARS and that the repairs could have been done in three days and that he checked and made sure that parts were available to make the repairs, all in accordance with his estimate of repairs marked Joint Exhibit Number 1.
After trial, the judge awarded a total of ONE THOUSAND THREE HUNDRED SEVEN AND 05/100 ($1,307.05) DOLLARS of which amount he attributed EIGHT HUNDRED FIFTY SEVEN AND 05/100 ($857.05) DOLLARS to cost of repairs and in addition awarded FOUR HUNDRED FIFTY AND NO/100 ($450.00) DOLLARS representing 40 days loss of use.
The above are stipulated to be true and correct in accordance with Article 2131 of the La.Code of Civil Procedure.”
In appellee’s brief the following appears:
“The appellee will accept the statement of facts of the appellant as being essentially correct. However, appellee would add the fact that following the accident it was some forty days before the appellee was contacted] by appellant insurance company concerning an adjustment to his vehicle.”

In view of the fact that appellee’s counsel signed the joint stipulation set forth above and his acknowledgement in his brief that the stipulation is essentially correct, we will act lipón it as containing the facts we may consider on this appeal.

The issue in the case is whether or not the trial court was in error in allowing forty (40) days loss of use of plaintiff’s automobile.

The appellee argues two points before us. In appellee’s brief it is asserted that appel-lee “testified he was financially unable at the time of the accident to have the repairs done to his vehicle”. Secondly, it is asserted that appellee “also stated he attempted as best he could within his limited means to contact the defendants’ insurance carrier, but his early efforts were to no avail.” We do not reach these arguments. Inasmuch as these averments are not in the joint stipulation of facts, they are outside of the record and may not be considered. All we have before us is the stipulation.

The trial court’s judgment makes a lump sum award of $1,307.05. There is no attribution in the judgment of this amount for the amount which represents repairs and the amount which represents loss of use. The stipulation, however, sets forth that $450.00 represented loss of use for forty (40) days. Apparently the trial court allowed $11.25 per day for loss of use. In view of the stipulated testimony of the repairman, Albert O. Hester, that all the repairs shown on his estimate could be accomplished within three days and that he had checked to determine that all necessary parts were available, we conclude that the trial court’s allowance of forty (40) days loss of use was excessive and manifestly erroneous and clearly wrong.

It would not be realistic to expect that plaintiff should take his damaged vehicle to a repair shop on the very day of the accident. Several days might be required before arrangements could be made and the repairman might not be able to commence repairs immediately. While an owner whose vehicle is damaged may recover for the loss of its use, he may not recover for loss of use beyond the time which should have been reasonably necessary to accomplish the repairs. Blum v. Allstate Insurance Company, 351 So.2d 283 (La.App. 3rd Cir. 1977), writ refused, 353 So.2d 1036 (La. 1978). In our opinion it would be fair and reasonable to allow plaintiff seven days for loss of use of his vehicle.

At the rate of $11.25 per day for seven days, we will make an award for loss of use of plaintiff’s vehicle of $78.75.

For the foregoing reasons the trial court’s judgment is affirmed insofar as it grants recovery in favor of plaintiff with interest and costs. We amend the judgment as to the principal amount. Accordingly, it is ordered, adjudged, and decreed that there be judgment in favor of plaintiff and against defendants in the full sum of $953.75, representing $857.00 as the cost of repair and $78.75 as damages for loss of use, together with legal interest from July 18, 1979, until paid and for all costs incurred in the trial court. Costs of this appeal are assessed to plaintiff-appellee.

AMENDED AND AFFIRMED AS AMENDED.

      . It appears to us that the preferable procedure in such cases would be to file the stipulation in the record in order that it might be included in the official record on appeal. Under the circumstances mentioned, we will not return the record for completion by insertion of this item.


author: GUIDRY, Judge.

text:
    STATE of Louisiana, Plaintiff-Appellee, v. Milton LAIR, Defendant-Appellant.
    No. 7806.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 8, 1980.
    C. O. Brown, Alexandria, for defendant-appellant.
    Donald T. Johnson, Alexandria, for plaintiff - appellee.
    Before GUIDRY, SWIFT and DOUCET, JJ.
   GUIDRY, Judge.

In this civil proceeding the defendant, Milton Lair, appeals a judgment declaring him a habitual offender as defined in LSA-R.S. 32:1471 et seq. and ordering him to surrender all permits and licenses to operate motor vehicles in Louisiana. We affirm.

On January 31, 1980, pursuant to the Motor Vehicle Habitual Offender Law provided in LSA-R.S. 32:1471 et seq., the State through counsel filed a rule to show cause why the defendant, Milton Lair, should not be adjudged a habitual offender and barred from operating a motor vehicle in Louisiana. The record reveals that the appellant was convicted on three separate occasions within a five year period for the offense of driving while intoxicated. These convictions occurred on June 19, 1975, June 26, 1975, and August 28, 1979. A certified copy of the appellant’s conviction record maintained by the Louisiana Department of Public Safety was admitted into evidence pursuant to LSA-R.S. 32:1473. At the hearing on the rule, the defendant admitted that he was the person named in the aforesaid conviction record. At the close of the hearing on the rule to show cause, the defendant was adjudged a habitual offender within the meaning of the statute. He appeals that judgment to this court.

At the outset it should be observed that this matter is properly appealable to the Court of Appeal as proceedings under these statutes are civil in nature. State v. Wilson, 354 So.2d 1077 (La.App. 2nd Cir. 1978), State v. Williams, 332 So.2d 432 (1976). LSA-R.S. 32:1478 specifically provides that an appeal from any final action or judgment pursuant to the Motor Vehicle Habitual Offender Law is taken in the same manner and form as appeals in civil actions.

Appellant urges on appeal that since two of the D.W.I. arrests occurred within one week of each other, it is apparent that he was entrapped and denied his constitutional rights. Appellant offers no evidence to substantiate his claim, thus his empty allegation is undeserving of serious comment.

Appellant next contends that he was not represented by counsel at the hearings which resulted in his first two D.W.I. convictions, and he was not adequately advised of his constitutional rights. We find no merit in this contention.

A review of the court minutes dated June 19,1975 and June 25, 1975, which document the defendant’s first two D.W.I. convictions, reveal that the presiding judge advised the accused of his constitutional rights, including the right to be represented by counsel and the right to have a lawyer appointed for him if he could not afford one. The record indicates that in both instances the defendant appeared without counsel and pled guilty to the charges against him.

Although we find, contrary to appellant’s assertion, that he was fully advised of his constitutional rights, we observe that it appears now well settled that a guilty plea, without benefit of counsel, in prior criminal proceedings is not a valid defense in habitual offender adjudications under LSA-R.S. 32:1471 et seq. In State v. Edwards, 353 So.2d 476, 477 (La.App. 3rd Cir. 1977), we said:

“Procedural due process is required before a driver’s license may be revoked. State v. Page, 332 So.2d 427 (La.1976), and Bell v. Burson, 402 U.S. 535, 91 S.Ct. 1586, 29 L.Ed.2d 90 (1971). This requires a meaningful hearing appropriate to the nature of the case.
The revocation of a driver’s license under the Habitual Offender statute does not constitute criminal punishment. It is a civil action and involves only the denial of the privilege of driving a motor vehicle on public highways of the state. There is no loss of liberty, no incarceration and no fine. State v. Page, supra, State v. Free, 321 So.2d 50 (La.App. 3rd Cir. 1976).
As this court stated in State v. Free. supra, at 54, ‘since this is a civil action and no deprivation of liberty is or can be contemplated, the stringent safeguards of criminal proceedings are not applicable.’ We held that a guilty plea without bene fit of counsel is not a defense in habitual offender adjudications under LSA — R.S. 32:1472, ...”

Appellant finally urges that the trial court erred by refusing to consider restoring his driving privileges based upon economic hardship. We disagree. LSA — R.S. 32:1479 as amended by Act 220 of 1979 and Act 347 of 1979 provides as follows:

“No license to operate motor vehicles in this state shall be issued to an habitual offender, nor shall a non-resident habitual offender operate a motor vehicle in this state until all of the following requirements have been complied with:
(1) a period of five years has elapsed since the date of the order of the court finding such person to be an habitual offender; and,
(2) financial responsibility requirements are met; and,
(3) Upon petition, after the lapse of the five year period provided above, and for good cause shown, the court, in its discretion, determines that the license should be restored. In restoring to such person, the privilege to operate a motor vehicle in this state, the court may prescribe such terms and conditions as it deems necessary to protect the best interests of the public, subject to other provisions of law relating to the issuance of operators’ licenses.”

Thus, there is no provision for the restoration of driving privileges on the basis of economic hardship once one has been adjudged a habitual offender under LSA— R.S. 32:1472.

For the above and foregoing reasons, the judgment of the trial court is affirmed. All costs of this appeal are assessed to the defendant-appellant.

AFFIRMED.


author: SWIFT, Judge.

text:
    Lester BROWN, Plaintiff-Appellee, v. FARMERS LAND & CANAL COMPANY, INC., Defendant-Appellee.
    No. 7812.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 8, 1980.
    Raggio, Cappel, Chozen & Berniard, Richard B. Cappel, Lake Charles, for defendant-appellant.
    Baggett, McCall, Singleton, Ranier & Iey-oub by Drew A. Ranier, Lake Charles, for plaintiff appellee.
    Before GUIDRY, SWIFT and DOUCET, JJ.
   SWIFT, Judge.

In this tort action the defendant appeals from a judgment finding it liable for bodily injuries sustained by the plaintiff in a collision in which the defendant’s cow was struck by the plaintiff’s automobile. We affirm.

The plaintiff, Lester Brown, was driving west on U.S. Highway 90 in the early morning hours of May 21, 1977, when he struck and killed a cow owned by the defendant, Farmers Land & Canal Company, Inc. (Farmers). At this point the facts are in serious dispute. The plaintiff contends that this collision caused extensive property damage to his automobile and severe bodily injuries to him which permanently disabled his left arm. The defendant contends that Brown waá not injured in the impact with the cow and he proceeded to drive approximately six miles further, leaning out his left window to see as his front view was obscured by the badly crumpled hood of his ear. Then, a second accident occurred wherein an unknown vehicle sideswiped the Brown automobile and caused his bodily injuries.

The jury rejected the defendant’s version of events, and rendered a verdict in favor of the plaintiff in the amount of $200,-000.00.

On appeal, Farmers does not question its liability for the first accident and the physical damages to the automobile, although no demand therefor was made in the plaintiff’s petition. It specifies as error the trial court’s findings that plaintiff’s bodily injuries were sustained in the collision with Farmers’ cow and that Mr. Brown was not contributorily negligent.

Farmers’ position is based primarily on the testimony of Janice Nixon, who was a guest passenger in the automobile on the night in question. Miss Nixon testified that Mr. Brown was not injured by the impact with the cow. Instead, he continued to drive on about six miles with his left arm out of the car window, where he was sideswiped by an unknown vehicle and sustained his injuries.

Mr. Brown, on the other hand, testified there was only one accident. At the time of the collision with the cow he saw the lights of an oncoming car a good distance away, but the other vehicle did not strike his automobile.

While there are several inconsistencies and discrepancies in the testimony of both of these persons and some unresolved questions may remain from the evidence as a whole, the jury apparently believed Mr. Brown’s testimony that his injuries were sustained as a result of the impact with the cow.

It is, of course, well settled that the credibility of the witnesses is best judged by the triers of fact and their judgment in that regard will not be disturbed unless clearly wrong. Canter v. Koehring Company, 283 So.2d 716 (La.1973); Arceneaux v. Domingue, 365 So.2d 1330 (La.1978); McMillan v. Travelers Ins. Co., 371 So.2d 1213 (La.App. 1 Cir. 1979).

Miss Nixon’s testimony was confused and uncertain. She admitted she had been drinking, that she did not know where the accident occurred or in which direction she was traveling when it happened. Animal hair and blood were found along the driver’s side of Mr. Brown’s vehicle. Further, the plaintiff’s physician, Dr. William Akins, testified that if Mr. Brown’s arm was resting out of the car window the impact with the cow could have caused his injuries, as well as an impact with a side-swiping vehicle.

From our review of the record, while we must admit some doubt that the plaintiff’s injuries were sustained in the collision with the defendant’s cow, we are unable to conclude that the jury’s factual finding in this respect was clearly wrong. Therefore, under our system of appellate review enunciated in Canter and Arceneaux, we must affirm.

As heretofore stated, the appellant does not question its liability for the damages that resulted to plaintiff from striking the cow on this “stock law” highway. LSA-R.S. 3:2803. Also, it has not attacked the-amount of the jury award as being beyond the upper limit of its discretion. Consequently, we have not considered that issue.

For the foregoing reasons, the judgment of the district court is affirmed. All costs are assessed against defendant-appellant.

AFFIRMED.


author: DOUCET, Judge.

text:
    Diann DEROUEN, Plaintiff-Appellee, v. Ruth KOLB & Lafayette General Hospital, Defendants-Appellants.
    No. 7818.
    Court of Appeal of Louisiana, Third Circuit.
    Oct. 8, 1980.
    Onebane, Donohoe, Bernard, Torian, Diaz, McNamara & Abell, Marilyn C. Castle and Timothy J. McNamara, Lafayette, for defendants-appellants.
    Simon, Come & Block, Gerald J. Block, Lafayette, for plaintiff-appellee.
    Before GUIDRY, SWIFT, and DOUCET, JJ.
   DOUCET, Judge.

Diann Derouen brought this tort action against Ruth Kolb, a registered nurse, and her employer, Lafayette General Hospital, seeking damages for injuries which she allegedly sustained as a result of an improperly administered intramuscular injection. Defendants filed exceptions of lis pendens and prematurity, which were based on the fact that plaintiffs claim had not been reviewed by a medical review panel as required by the Medical Malpractice Act, LSA-R.S. 40:1299.41 et seq. The district court overruled the exceptions, finding that as applied to the facts of this case, portions of the medical malpractice act are unconstitutional.

Defendants have appealed to this court. However, this court does not have appellate jurisdiction of this case in its present posture. The Louisiana Supreme Court has exclusive appellate jurisdiction over cases in which a law of this state has been declared unconstitutional. Louisiana Constitution Article V, Section 5(D).

It is therefore ordered that this case be transferred to the Louisiana Supreme Court. The transfer is to be made within sixty days after this decree has become final; otherwise the appeal is to be dismissed. All costs of this appeal and the transfer of this case to the Supreme Court are assessed against the appellants. LSA-C.C.P. Art. 2162; LSA-R.S. 13:4441-4442; In re Gulf Oxygen-Welders Supply Profit Sharing Plan and Trust Agreement, 291 So.2d 887 (La.App. 3rd Cir. 1974); reversed on other grounds 297 So.2d 663 (La.1974).

Appeal transferred to the Louisiana Supreme Court.