Incorporate California

Appellant city sought review of a judgment from the Superior Court of Los Angeles County (California), which, pursuant to Cal. Rev. & Tax. Code § 23182, ordered appellant to refund moneys paid by respondent savings and loan for the appellant's business license tax. Appellant contended that § 22182 was an unconstitutional attempt by the legislature to regulate a municipal affair of a charter city.

Respondent savings and loan challenged appellant city's business license tax for violating Cal. Rev. & Tax. Code § 23182, which imposed a tax on net earnings of financial institutions in lieu of all other state, county, and municipal taxes and licenses. The superior court entered judgment in favor of respondent ordering appellant to refund the taxes paid because in an area of statewide concern, the state legislature could curb the taxing power of a charter city. Appellant Incorporate California sought review contending that its power to tax for revenue purposes could be limited only by an amendment to the constitution or to its charter. The court noted that the home rule doctrine under Cal. Const. art. XI, § 5(a) granted chartered cities the authority to manage local affairs while restricting the state's power to interfere with municipal matters. Because the power to impose taxes to raise revenue was a municipal affair pursuant to a direct constitutional grant, the court reversed the judgment holding that a statewide concern analysis was irrelevant to the business license tax imposed by appellant.

The court reversed a judgment that ordered appellant city to refund moneys paid by respondent savings and loan for its business license tax that was based on a state tax imposed in lieu of municipal taxes on financial institutions. The court held that taxing for revenue purposes was a direct constitutional grant to chartered cities and could be limited only by an amendment to the constitution or to appellant's charter.

Defendant debtor law firm challenged a judgment of the Superior Court of Orange County (California), which denied a claim of exemption under Cal. Civ. Proc. Code § 690.4 for personalty subject to a levy under a writ of execution on plaintiff creditor's judgment against defendant. Third party claimant law clerk challenged a separate judgment that found that the transfer of personalty from defendant to him was fraudulent.

Plaintiff creditor obtained a judgment against defendant debtor law firm in an unlawful detainer action for rent. Pursuant to a writ of execution, the sheriff levied on office equipment, books, and other items. Defendant claimed an exemption under Cal. Civ. Proc. Code § 690.4. Thereafter, third party claimant law clerk filed a claim for items defendant sold him in consideration for past unpaid wages. Third party claimant attorney also filed a claim to certain items under an agreement to buy the business. The trial court found that an exemption under § 690.4 did not apply, that third party claimant attorney was entitled to certain property pursuant to a resulting trust, and that the transfer to third party law clerk was fraudulent. Defendant and third party law clerk appealed and the court affirmed the entire judgment. The court held that § 690.4 was not available to defendant as a professional corporation. The court also held that the transfer to third party claimant law clerk was fraudulent because he had knowledge of defendant's financial problems. The court further held that the evidence showed that a resulting trust had formed in favor of third party claimant attorney.

The court affirmed the judgment denying defendant debtor law firm's claim for exemption as to a levy under a writ of execution on plaintiff creditor's judgment against defendant because such exemption was not available to professional corporations. The court also affirmed the judgment as to third party claimant law clerk's claim to certain property because the transfer of the property was fraudulent.

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