United States v. Division of Labor Law Enforcement, Department of Industrial Relations, California

The trial court subordinated the priority granted to claims of the United States by Rev.Stat. § 3466, 31 U.S.C.A. § 191 , to certain labor claims which were asserted to have ripened into liens under the California Code of Civil Procedure, § 1204, at the time an assignment for the benefit of its creditors was made by an insolvent corporation. We have for determination the correctness of that finding.

The facts are not in dispute.

Stanley Restaurants, Inc., executed a written assignment to Ralph Meyer for the benefit of its creditors on June 23, 1947. Notice of this assignment was sent by Meyer to the trade creditors of the Stanley Restaurants, Inc., but no such notice was given to the parties to this action.

Appellee is the assignee of certain persons who were employed by the Stanley Restaurants, Inc., to perform labor and services. The wage claims ■ in question which were entitled to a preference and lien to the extent provided 'for by Cal. Code Civ.Proc. § 1204 amounted to the sum of $644.40. Appellee filed with Meyer written notices concerning the preferred labor claims.

On October 30, 1947, the United States Collector of Internal Revenue filed with Meyer as assignee for the…