Cheek

The question here is whether or not a California statute, § 1204, Cal.Code Civil Procedure, operates to give to wage claimants liens which survive bankruptcy by virtue of § 67, sub. b, of the Bankruptcy Act, 11 U.S.C.A. § 107 , sub. b.

On October 2, 1945, the bankrupt made a general assignment for the benefit of its creditors. On January 1, 1946, the bankruptcy proceeding was instituted by the filing of an involuntary petition. The two laborers whose rights are in dispute had performed personal services for the bankrupt within the period of 90 days preceding the general assignment. These employees, through the State Division of Labor Law Enforcement, filed with the assignee formal written notice claiming labor liens pursuant to the state statute, one claim being for $200, the other for $82.50. When the claims were filed the assignee had on hand sufficient assets to pay them, which assets he later surrendered to the trustee.

Upon intervention of the bankruptcy proceeding the state agency made formal claim to statutory liens on account of the amounts owing these laborers, but the referee allowed them only as general unsecured claims. Parenthetically we may observe that appellee…