City of Los Angeles v. Cohen

[226]

SHINN, P.

J.

Defendant appeals from a judgment in favor of the city of Los Angeles for unpaid license taxes imposed under section 21.108 of the city license ordinance.

1

The ordinance excepts the business of engaging in transactions for the purchase or sale of real property and of making loans secured by liens upon real property.

The facts for the most part were stipulated and the remaining facts are not in dispute. The question is whether defendant was engaged in the business of purchasing or discounting or arranging for the purchase or discounting of any obligation of money due or to become due, or any evidence of any obligation of money due or to become due or the loaning of money or advancing credit, within the meaning of the ordinance.

The material facts are the following: By agreement with Modern of October 31, 1947, defendant obligated himself for one year to purchase from Modern Picture Frame Company such accounts receivable as were acceptable to him; he had the exclusive right to purchase them; he agreed to pay the full face value of the accounts so purchased less a trade discount of 2% per cent, without recourse to Modern for credit losses; defendant was to pay on the date of purchase 72% per cent of the face amount of the invoices less trade discounts; he was to retain 25 per cent as security for faithful performance of the agreement by Modern, but was to pay the 25 per cent retained as a reserve on the 10th day of the month following payment of the account by the customer to Modern. The terms of payment were modified by agreement of February, 1948; defendant was to retain at all times $500 as security for faithful performance of the agreement and upon the date of purchase was to pay Modern 95 per cent of the face amount of the accounts less trade discounts. In March, 1949, the agreement was again modified, particularly with reference to the accounts of approved chain stores and department stores.

[227]