City of Los Angeles v. Belridge Oil Co.

• Decision Date: 12 April 1957
• Citation: 309 P.2d 417,48 Cal.2d 320
• Court: California Supreme Court
• Parties: The CITY OF LOS ANGELES, a municipal corporation, Plaintiff and Appellant, v. BELRIDGE OIL COMPANY, a California corporation, Defendant and Respondent. L. A. 24129.

Page 417

309 P.2d 417

48 Cal.2d 320

The CITY OF LOS ANGELES, a municipal corporation, Plaintiff and Appellant, v. BELRIDGE OIL COMPANY, a California corporation, Defendant and Respondent.

L. A. 24129.

Supreme Court of California, In Bank.

April 12, 1957.

Roger Arnebergh, City Atty., Bourke Jones and James A. Doherty, Asst. City Attys., Los Angeles, for appellant.

Wellborn, Barrett & Rodi, Vernon Barrett and F. C. Lowell Head, Los Angeles, for respondent.

CARTER, Justice.

This is an appeal by the city of Los Angeles from a judgment entered upon a retrial after a decision by this court, City of Los Angeles v. Belridge Oil Co., 42 Cal.2d 823, 271 P.2d 5, reversing a judgment in favor of defendant, Belridge Oil Company.

The only question involved here is whether the trial court properly applied the law as set forth our decision ^* on the prior appeal.

Upon the retrial the parties stipulated that all of the gross receipts of the defendant 'are attributable in part to its selling activities within the City of Los Angeles and in part to its selling activities without the City' and that 'not more than 20% of defendant's total gross receipts for the years 1948 and 1949 are attributable to defendant's business (or selling activities) in the City of Los Angeles under any method of allocation which is fairly calculated to determine the defendant's gross receipts derived from or attributable to sources within the City of Los Angeles and to determine the defendant's gross receipts derived from or attributable to sources outside the City of Los Angeles' subject to plaintiff city's right to maintain on appeal that there should be no allocation of receipts for the purpose of determining the amount of the tax and that the tax should be measured by defendant's total gross receipts. Defendant agreed that 20% of its total gross receipts for the years 1948 and 1949 might be used to measure the tax to be imposed upon it under section 21.166 of plaintiff's license ordinance for the years 1949 and 1950.

The trial court held, in accord with the stipulations entered into between the parties, the defendant was subject to the license tax (21.166) for such portion of its gross receipts 'as is derived from or attributable to its business or selling activities in the City of Los Angeles; that such portion of such gross receipts should be determined under some method of allocation which is fairly calculated to determine the defendant's gross receipts derived from or attributable to sources within the City of Los Angeles and to determine the defendant's gross receipts derived from or attributable to sources outside the City of Los Angeles.' And that 'Not more than 20% of defendant's total gross receipts for the years 1948 and 1949 are derived from or attributable to defendant's business in the City of Los Angeles.' And that 'Not more than 20% of defendant's total gross receipts for the years 1948 and 1949 are derived from or attributable to defendant's selling activities in the City of Los Angeles.'

In harmony with its conclusion, the trial court held that there remained due and owing to the plaintiff from the defendant the sum of $536.43, including both principal and interest.

The primary argument of the plaintiff is that this court did not, in its prior opinion, hold that there should be an allocation of the total gross receipts of defendant based upon the selling activities directly attributable to the Los Angeles part of defendant's business.

Section 21.166 of the Los Angeles City Tax Ordinance provides that 'Every person manufacturing and selling any goods, wares or merchandise at wholesale, or selling goods, wares, or merchandise at wholesale, and not otherwise specifically licensed by other provisions of this Article, shall pay for each calendar year, or portion thereof, the sum of $8.00 for the first $20,000, or less, or gross receipts, and, in addition. * * *' We held (p. 830) that 'defendant's Los Angeles office was engaged in the activity of 'selling goods, wares or merchandise at wholesale' within the city of Los Angeles and was therefore subject to the provisions of section 21.166 of the Los Angeles tax ordinance.' We also specifically held (pp. 831, 832) that 'There is, however, one important limitation which should be pointed out and that is this: even though the city can tax the activity of selling it can only base the tax on such selling activities as are carried out within its territorial limits. For this reason it is only those gross receipts which are attributable to selling activities within the city which should form the basis for the rate of tax. Gross receipts attributable to selling activities conducted outside the city should not be included. Such a construction necessarily follows from the fact that the business license tax is on the privilege of engaging in selling activities in the city of Los Angeles and as such should only be based on such activities.'

Plaintiff argues that the controversy centers around the statement made by this court (p. 831) that 'Defendant company...