Stepp

The claim of the appellant is based up-' on a contract entered into between him and the Elmer Company, Ltd., on November 25, 1929. In that contract, the appellant agreed to furnish and sharpen bits and to do welding work in connection with the company’s oil well drilling operations.

Pertinent provisions of the contract follow:

With reference to other specified wells, the contract contains provisions identi *927 cal or similar to that of paragraph 4(a), supra.

It was stipulated at the hearing before the special master that the Elmer Company had secured no permit from the Commissioner of Corporations of the State of California authorizing the execution of the contract.

The special master reported that by virtue of the contract, the appellant had an equitable lien against the proceeds of the wells, and found that the contract did not create or assign a “security” as defined by the California Corporate Securities Act (Calif.Stat.1929, p. 1251).

The court below sustained the exceptions of the appellee to the special master’s report, and made an order disallowing the appellant’s claim to a preferred status against the assets of the receivership. The court, however, recognized the…