Chapter 5.44
DISTRESSED GOODS AND CLOSING-OUT SALES
Sections:
5.44.030 Use of certain words prohibited.
5.44.040 License – Application.
5.44.050 License – Issuance restrictions.
5.44.080 License – Term – Renewal.
5.44.090 License – Revocation.
5.44.100 Commingling of goods prohibited.
5.44.110 Purchases with intent to commingle prohibited.
5.44.120 Additional goods prohibited.
5.44.130 Inspection of premises.
5.44.010 Definitions.
For the purpose of this chapter, the following definitions shall apply:
A. “Closing-out sale” means a sale advertised, represented, or held out as such arising from a future actual or contemplated cessation of business; provided, however, that the closing out of a line or type of merchandise not resulting in a cessation of the entire business shall not be deemed a closing-out sale.
B. “Distressed goods, wares or merchandise sale” includes all goods, wares, and merchandise advertised as an insurance, bankruptcy, mortgage, insolvent, assignees, executors, administrators, receivers or trustees sale of goods, wares and merchandise, or a sale of goods, wares and merchandise advertised as damaged by fire, smoke, water or otherwise, or a sale of goods, wares and merchandise advertised as obtained by, through, as a result of, or by reason of, any of the above-named situations or contingencies.
C. “Removal sale” means a sale advertised, represented or held out as such, arising from a future actual or contemplated moving of a business from its present location to a new location. [1956 Code § 5-1501, § 1.]
5.44.020 License – Required.
Except as to sales under judicial process, it is unlawful for any person to hold any sale defined in SMC 5.44.010, or to advertise, represent, or hold out that any sale of goods, wares or merchandise is a sale of distressed goods, wares or merchandise or is a removal or closing-out sale in the City unless such person has first obtained a license to conduct such sale pursuant to the provisions of this chapter. [1956 Code § 5-1501, § 2.]
5.44.030 Use of certain words prohibited.
Except as to sales under judicial process, it is unlawful in the City for any person to advertise the sale of goods, wares, or merchandise by using the words “fire,” “smoke,” “insurance,” “bankruptcy,” “mortgage,” “insolvent,” “liquidation,” “close-out,” “distress,” “removed,” “receivers,” “trustees,” “executors,” “administrators,” or words of similar import to denote the type or kind of sale, unless same is a bona fide distressed goods, wares, or merchandise sale or is a removal or closing-out sale, and such person has first obtained a license to conduct such sale pursuant to the provisions of this chapter. [1956 Code § 5-1501, § 3.]
5.44.040 License – Application.
In addition to the general application form to be filed with the City as provided in this title, the applicant for a license for the sale of distressed goods, a removal or closing-out sale, shall file a statement showing all the facts in regard to the contemplated sale, the reasons for such sale, and an inventory showing actual purchase price, names of persons from whom the goods were obtained, date of delivery to the applicant, and all details necessary to fully identify the goods to be sold, and shall specify the period of time during which the sale will continue, not to exceed a period of two months, except as hereinafter provided. As to any goods which were obtained more than three years prior to the date of the application, an estimate of their value shall be shown instead of the actual purchase price, and it shall not be necessary to show the name of the person from whom those goods were obtained. [1956 Code § 5-1501, § 4.]
5.44.050 License – Issuance restrictions.
No license shall be issued for a distressed goods, wares or merchandise removal or closing-out sale unless it shall appear that the applicant is in good faith disposing of his stock for the purpose of retiring from business, or unless he has suffered a fire or similar loss of substantial amount within 30 days prior to the date of such application, or unless the character of other or similar designated sales is based upon the foundation of fact or events which his announcement to the public regarding such sale is to be put forth as an inducement for patronage, or unless he is in a voluntary or involuntary bankrupt condition or unless he is removing his inventoried stock to a new location. [1956 Code § 5-1501, § 8.]
5.44.060 Bond.
An applicant for a distressed goods, wares or merchandise sale shall tender with the application a bond in the sum of $1,000, conditioned upon observance of this chapter and for the indemnification of any purchaser at such sale who suffers a loss by reason of misrepresentation. [1956 Code § 5-1501, § 5.]
5.44.070 License – Fee.
The license fee for each sale of merchandise under this chapter is set at the rate of $5.00. [Ord. 1663 § 1, 1989; Ord. 1491 § 1, 1995; 1956 Code § 5-1501, § 12.]
5.44.080 License – Term – Renewal.
A. All licenses issued for the sale of distressed goods shall be valid for a period of two months only, unless renewed as provided in subsection (B) of this section.
B. At any time during the period of the license, application may be made to the City Manager showing that all goods in the original inventory have not been sold, accompanied by an inventory of the remaining unsold goods, and if it appears to the City Manager that undue hardship will result unless the license is not extended, he may extend and renew the license on a daily basis upon the payment of an additional license fee of $25.00 per day, which license shall continue in effect only so long as the daily license fee is paid, and the license shall comply with the provisions of this chapter. Any application for such a license under the provisions of this chapter covering any goods, wares or merchandise previously inventoried and licensed, shall be deemed to be an application for renewal under this section, whether presented by the original applicant or by any other person. [1956 Code § 5-1501, §§ 6, 7.]
5.44.090 License – Revocation.
The City Manager may revoke the license of any person found guilty of violating this chapter and no new license shall be issued to such person within one year. [1956 Code § 5-1501, § 13.]
5.44.100 Commingling of goods prohibited.
The license shall be valid only for the inventoried goods. Commingling of additional merchandise with that inventoried shall cause the merchandise inventories to lose its identity as distressed goods, and any such license issued shall cease to apply to the sale of such goods. If the inventoried stock is offered for sale on the same premises with other stock by the same person, the same shall be deemed commingled. [1956 Code § 5-1501, § 9.]
5.44.110 Purchases with intent to commingle prohibited.
No person seeking a license shall secure goods, wares or merchandise prior to the application for a license for the purpose of commingling with the distress stock, and any unusual purchase or additional to stocks within 60 days prior to such application for license shall be prima facie evidence that such purchase or addition was made for the purpose of commingling at such sale. For the purpose of this section, an unusual purchase or addition to stocks shall be considered a purchase or addition to stocks which exceeds by 20 percent, in dollar volume, any purchase within any 60-day period in the preceding two years before the sale. [1956 Code § 5-1501, § 10.]
5.44.120 Additional goods prohibited.
No person operating under such a license shall add any goods to the inventoried stock and no goods shall be sold except those included in the original inventory. Each sale of goods not so inventoried shall constitute a separate offense under this chapter. [1956 Code § 5-1501, § 11.]
5.44.130 Inspection of premises.
All premises used for a licensed distressed goods, wares and merchandise sale as set forth in this chapter shall at all times be open to inspection by any employee of the City required to enforce this chapter in order to ascertain whether any infraction of the provisions of this chapter have taken place or is taking place herein. [1956 Code § 5-1501, § 14.]