City of Los Angeles v. Security Systems, Inc.

The City of Los Angeles sued defendant to recover $2,240.46 in business taxes based'on gross receipts for the calendar years 1968, 1969 and 1970, pursuant to sections 21.03 and 21.190, Los Angeles Municipal Code, penalties and interest. Plaintiff was awarded $230.52 and interest. It appeals from the judgment, and urges inadequacy of the recovery.

Most of the facts are stipulated and the rest undisputed. Defendant is a corporation, a wholly owned subsidiary of West Coast Burglar Alarm Systems; in turn defendant has two wholly owned subsidiary corporations, Aaron Alarm and Sylvester Alarm (hereafter referred to as affiliates). The affiliates install, maintain and sell alarm systems. Defendant’s function is to act as a financial and employer “conduit” for the affiliates. In this respect and on behalf of its affiliates defendant sends out all billings to their customers and collects for them all sums owing, pays all of their obligations, hires, carries on its own payroll and supplies to them all of the waged and salaried persons used by them in their various functions—installation, servicing, sales, central office activities and special contract labor —and makes deductions…