City of Los Angeles v. Crawshaw Mortgage & Investment Co.

Respondent, the City of Los Angeles (hereinafter the City), brought suit to collect delinquent business taxes alleged to be owed by appellant, Crawshaw Mortgage and Investment Co., a corporation (hereinafter Crawshaw), in the amount of $2,336.07 plus interest and penalties. By its answer Crawshaw denied liability for the claimed delinquent taxes, maintaining that Los Angeles Municipal Code section 21.108 is unconstitutional as applied to it. Judgment was entered in favor of the City. Crawshaw appeals from the judgment.

Crawshaw contends that “Section 21.108(b) Los Angeles Municipal Code creates an arbitrary and impermissible classification of persons for the purpose of raising revenue by means of unequal taxation.” Los Angeles Municipal Code section 21.108 provides in pertinent part as follows: “(a) Subject to the exceptions stated hereafter, for each person engaged in the business of lending money, advancing credit, or lending credit or arranging for the loan of money or advancing of credit or lending of credit for and on his own behalf or on behalf of any other person as principal, agent or broker, whether security of any kind is taken for such' loan or advance or not;…