Century Geophysical Corp., a Corporation, and v. California Board of Equalization, And

dissenting:

I respectfully dissent. In order to fully set forth the basis of my dissent, it is necessary to further detail the factual background of this case.

Century is an Oklahoma corporation, which had a wholly-owned California subsidiary named Century Automation, Inc. (Automation). In July, 1970, all the assets of Automation were sold to C. A. Systems, Inc. (Systems), a California corporation. The purchase price was to be paid in installments, but Systems defaulted almost immediately due to disputes over the terms of the agreement. This sales agreement provided that:

Century abandoned Automation as a going concern and wrote off its investment in Automation on its books, but Automation was not formally dissolved according to California law.

On April 19, 1971, Century filed a Chapter XI bankruptcy petition in the Northern District of Oklahoma. The Board filed a claim for $8,648.19 in the bankruptcy proceedings. In connection with this claim, the Board sent a letter to the referee explaining that since its information was “incomplete as to the intercompany relationship between the debtor and its subsidiary, Century Automation, Incorporated” and “[s]ince Century Automation is…

The California Board of Equalization appeals from an order of the District Court enjoining the Board from interfering with Century Geophysical’s (Century’s) rights under a sales agreement with C. A. Systems, Inc. (Systems). We affirm.

The underlying dispute concerns the Board’s attempts to collect certain taxes allegedly owing from Century Automation, Inc. (Automation), a company once a wholly-owned subsidiary of Century.

While the parties have raised several issues on this appeal this opinion will be confined to that issue found to have been dispositive.

The relevant facts may be stated briefly. Century entered into an agreement to sell all the assets of Automation to Systems. According to that agreement Century retained a security interest in the transferred assets.

Systems soon defaulted on its obligations under the agreement. Century moved to take possession of its collateral and further took steps which effectively dissolved Automation as a going concern.

Century subsequently filed a Chapter XI Bankruptcy petition in the Northern District of Oklahoma. The Board filed a claim for $8,648.19 in those proceedings, the amount it claimed was owed by Automation for sales and…

564 F.2d 342 CENTURY GEOPHYSICAL CORP., a corporation, Plaintiff and Appellee, v. CALIFORNIA BOARD OF EQUALIZATION et al., Defendants and Appellants. No. 75-2257. United States Court of Appeals, Ninth Circuit. Nov. 11, 1977. Dissenting Opinion Nov. 25, 1977. 1 Charles C. Kobayashi, Deputy Atty. Gen. (argued), Sacramento, Cal., for defendants and appellants. 2 Lance Stockwell (argued), of Boesche, McDermott & Eskridge, Tulsa, Okl., for plaintiff and appellee. 3 Appeal from the United States District Court For the Eastern District of California. 4 Before KILKENNY and ANDERSON, Circuit Judges, and CRAIG, District Judge * . 5 CRAIG, District Judge. 6 The California Board of Equalization appeals from an order of the District Court enjoining the Board from interfering with Century Geophysical's (Century's) rights under a sales agreement with C. A. Systems, Inc. (Systems). We affirm. 7 The underlying dispute concerns the Board's attempts to collect certain taxes allegedly owing from Century Automation, Inc. (Automation), a company once a wholly-owned subsidiary of Century. 8 While the parties have raised several issues on this appeal this opinion will be confined to that issue found…