Continental Banking Co. v. City of Escondido

California Court of Appeal Jun 15, 1937 No. Civ. 10499Published

Before: Dooling

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Holding. The court held that a municipal ordinance imposing different license tax rates on bakeries with a fixed place of business within the city versus those located outside the city is constitutional, provided both classes are taxed and the classification is not a mere subterfuge for oppression. The difference in tax burden is justified by the fact that local businesses pay additional ad valorem property taxes to the city that non-resident businesses escape.

Issues

Whether a municipal ordinance imposing different license fees on bakeries based on whether they maintain a fixed place of business within the city constitutes unconstitutional discrimination.

Disposition. affirmed

Quotations verified verbatim against the opinion

“the very power to license for purposes of regulation and revenue involves the right to make distinctions between different trades and between essentially different methods of conducting the same general character of business or trade”

“merchants having fixed places of business within a city and other merchants may be separately classified and license taxes in different amounts may be laid upon those in the two classifications”

“Persons conducting bakeries within the City of Escondido are obliged to pay an ad valorem tax to the city on the real and personal property devoted to their businesses. Those engaged in the bakery business elsewhere pay no such tax”

DOOLING, J.,

pro tem.

—Appeal from a judgment for' defendants entered after sustaining a ■ demurrer to an amended complaint. Plaintiffs and appellants are severally engaged in the bakery business in the city of San Diego and selling bakery goods within the corporate limits of respondent City of Escondido. By their complaint in this action they sought to enjoin the enforcement of Ordinance No. 297 of respondent city, imposing a license tax on persons, firms and corporations engaged in the bakery business, on the ground of unconstitutional discrimination.

The taxing sections of the ordinance which are claimed to operate unconstitutionally upon appellants are sections 6 and 7 and so far as here involved those sections rea,d:

“Section 6: Every person, firm or corporation owning, operating and conducting a bakery within the City of Escon

[390]

dido, California, and which bakery is upon the tax rolls of said City, shall pay to said City the following license fee— To-wit: the sum of Fifty Dollars ($50.00), for each year for each such bakery so operated. . . .

‘ ‘ Section 7: Every person, firm or organization owning, operating and conducting a bakery without the City of Escondido, California, and who carries on or engages in the business of selling bakery products or solicits orders for the sale of bakery products in said City, produced in such bakery, directly or indirectly, individually or by agent, representative or otherwise, shall pay to said City the following license fee to-wit: One Hundred and Fifty Dollars ($150.00) for each year for each such bakery, provided such person, firm or corporation shall use no more than one vehicle in his said business in said City and for each additional vehicle used by said person, firm or corporation in said City there shall be paid a further sum of Twenty-five Dollars ($25.00) for each vehicle, which said sum of Twenty-five Dollars shall be paid semi-annually in advance. ...”

We consider this case to be controlled by the principles laid down in

Ex parte Haskell,

112 Cal. 412 [44 Pac. 725, 32 L. R A. 527],

Continental Banking Co. v. City of Escondido

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DOOLING, J.,

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