*1 No. 30558. Sept. 1976.] [L.A. Plaintiff, CORPORATION, TITLE
BUSINESS al., OF LABOR LAW ENFORCEMENT et DIVISION Defendants and Appellants; AMERICA, OF
UNITED STATES Defendant Respondent. *2 Counsel Leff, Rosenfield, Leif, & Temkin G. & Robert Denison Kight-
Lipsig, General, John P. Evelle J. lingér, Kightlinger, Younger, Attorney Milas, General, Thomas Scheerer and Martin Deputy Attorneys Lazar, Friedman, Stahl & Jabin for Defendants and Appellants. General, P. Levi, Scott H. United States
Edward Attorney Crampton, Garrett, Andrews, D. General, Crombie J. Gilbert E. Assistant Attorney Keller, Gelber, D. United States M. William Attorney, Stephen for Defendant H. Assistant United States Charles Attorney, Magnuson, and Respondent.
Coulter, & P. Curiae. Vernoff Brewer and Coulter Amici George Opinion
SULLIVAN, holder J. In this action an escrow interpleader brought of sale of to resolve claims a conflicting of seller from the claimant creditors various judgment wage appeal taxes in of defendant United States of America for entered favor unpaid and penalties. 24, 1971, of the District Director Internal Revenue
On September Game, for Inc. an assessment made Mating unpaid against Act taxes Contributions (F.I.C.A.) Federal Insurance withholding $3,170.88. amount of with and interest total penalties together was made at this assessment of and demand Notice time. same escrow 1971, Game, Inc. into a written 6, entered
On October Mating latter for sum to sell to the Corporation agreement for certain license issued $10,500 its on sale premises general liquor Title (Busi- Business Plaintiff in Los Corporation interpleader, Angeles. The full under this acted as escrow holder Title) ness agreement. in the escrow the was buyer. deposited purchase price Game, escrow various creditors the course of the Mating During claims. On October holder of notified escrow Inc. unpaid plaintiff Los the Recorder of filed with Revenue Service Internal on taxes and notice its lien for the assessed January County Angeles this notice of holder served on escrow levy pursuant taxes, $3,170.88 in assessed lien for penalties previously perfected Enforcement, State Law Division Labor interest. Defendant $1,418.85; defendant California, claim in sum presented wage Fund Union Welfare Hotel-Restaurant presented Los Employer Angeles $1,650; Temkin, Jr., claim for William H. defendants $3,952.19, Sanford and Peter similar claims for Orling Rooney presented $575, $575 respectively. $10,500
Business Title as escrow holder determined that all of the above insufficient claims and the amount due under satisfy the federal tax lien. Pursuant to section 24049 Business and Professions Code1 and order to make actual transfer of the liquor the escrow holder made from this fund to the possible, payments State Board of and the of Human Resources Equalization Department tax liabilities of the State of Development satisfy outstanding 24, 1972, California. On Business Title received notice from the May of Alcoholic Control that the Beverage (Department) *4 license had been transferred. to section 24074.12 it Accordingly pursuant advised each creditor who had filed a claim the escrow that there against creditors, were insufficient assets in the escrow to in full. pay 25, 1972, On Business Title the instant action in July brought the court the claimant defendants interpleader asking require themselves their to the funds in escrow litigate among respective rights 1Section24049 “The provides: refuse to department may license when the any applicant Tax in the of delinquent taxes due payment any under the Alcoholic Beverage Law, Law, the Sales Law, and Use Tax the Personal Income Tax or the Bank and Law, Tax Corporation on unsecured as defined in Section 134 of the Code, Revenue and Taxation when such tax arises in full liability or in out of the part exercise of the of an alcoholic privilege beverage amount due under Insurance Code Unemployment when such arises out of the conduct of a liability business licensed by Department Alcoholic Control.” Beverage Hereafter, noted, unless otherwise all section references shall be to the Business and Professions Code. 2Section 24074.1 act as provides: “Any an escrow holder under person desiring Section 24074 shall: “1. with all the Comply provisions with Section applicable Chapter (commencing 17000)of Division 6 of the Financial Code. creditor, “2. Not more than 10 after a claim days from said escrow holder receiving claim; shall of each acknowledge receipt “3. Not more than 10 after the license has been transferred and to the days prior distribution of the assets held said escrow holder he shall advise each creditor who filed a claim the escrow whether or not there are in the against sufficient assets escrow to full, all creditors in If full. the assets in the escrow pay are sufficient to all creditors in pay said escrow holder shall also advise each creditor of the date or before which on full, will be made. If there are not sufficient assets to all creditors in he shall then pay advise each escrow with (a) creditor who filed claim of the the total assets in following: placed asset; (b) him and the nature of each the name of each filed a creditor who claim; (c) claim against escrow and the amount of said the amount he proposes creditor; (d) each the date on or before which pay creditors.” said amount will be total of the claims filed exceeded the sum in Each
since the held escrow. of the defendants answered. escrow holder was ordered to Plaintiff $7,699.04, amount its with the court the sum remaining deposit state taxes and hands after above-mentioned it and allowed the court. fees and costs incurred Upon attorney’s Title from action. such Business was discharged making deposit from the action Game was also dismissed Defendant pursuant Mating of America United States entered on 1973. Defendant a default May substituted as had been States), (United stipulation pursuant named United States defendant the originally place Service, moved for Revenue summary partial Treasury—Internal Temkin, moved for and defendants also Orling Rooney judgment summary j udgment. law3 in which it of fact and conclusions of
The trial court filed findings From these we have set them forth. the facts to be found substantially $7,699.04 the title to the it concluded that sum interpleaded findings Game, was in the defendant supremacy Mating defaulting VI, cl. made 2)4 United States Constitution (art. clause of the sections 6321 and defendant United States under accorded priorities Code, over scheme of title United States control 6323 (a) any priority Code and that 24074 of the Business Professions contained *5 lien claim for States constituted a the claim of defendant United and taxes, the sum and interest interpleaded unpaid penalties before the from the fund was entitled to be in court and deposited was entered claims of the other defendants. accordingly.5 Judgment to which seeks in “have no summary judgment procedure of fact place 3Findings not ‘issue with ‘issue finding’ and is concerned discover whether there is try anything 141, 148 (1962) 210 (de v. de Cal.App.2d [26 determination.’” Echeguren Echeguren bench, However, motion after the summary in the case at 562].) judgment Cal.Rptr. filed, facts, at least and filed a thereby, defendants stipulation interpleaded (See rather than summary judgment. trial on the facts to a stipulated implicitly agreed Witkin, 2704.) are ed.) of fact (2d normally Although findings § Cal. Procedure p. 4 facts, to make court it is a cause is tried on proper where stipulated unnecessary findings material. Neu Corp. (Hugo facts contain evidentiary of fact where the stipulated Moreover, 916].) (1966) 706 Cal.Rptr. v. the Los County Angeles Cal.App.2d [50 facts, issues of law. their limiting appeal do dispute parties VI, Constitution clause of the United States provides: 4Article Constitution, made in which shall be the United States and the Laws of “This made, thereof; made, the Authority which shall be under and all Treaties or Pursuance Land; States, and the every Law of the Judges shall be the of the United supreme or Laws of State to in the Constitution thing shall be bound thereby, any State Contrary notwithstanding.” fund in court out of the the court to deposited directed the clerk of pay 5Thejudgment States, $3,520.54with interest the sum of To defendant the following: by plaintiff These the several defendants defendant United appeals (except States) followed.
Section 2407 certain prescribes procedures requirements connection with the transfer of a license: The of an establishment escrow, therein, and the from deposit purchase price payment of all bona fide with creditors who file claims purchase price If escrow holder. or consideration is not sufficient to purchase price full, the claims in then the escrow holder is to distribute the pay consideration, material, so far as is here as follows: First the payment Enforcement, to defendant Division of Labor Law 17.36 specified; percent, Temkin, defendants 62.45 and to defendant Los Orling Rooney collectively, percent, Fund, Hotel-Restaurant Union Welfare 20.19 of the fund Angeles Employer percent, after of the claim of defendant United States. remaining payment 6Section 24074 “Before the provides: of such a transfer filing application if the intended transfer of the department, or business or license involves a purchase price consideration, the licensee and the intended transferee shall establish an escrow with some or person, association not a to the corporation, transfer as escrow party acting holder, and the intended transferee shall with the escrow holder the full amount deposit of the a or purchase consideration. The price shall be application accompanied by of the entire description consideration. Such shall include a of of description designation cash, checks, notes, and promissory and the amount tangible intangible each thereof. The licensee and intended transferee shall also enter into an agreement, holder, holder, shall be agreement with the escrow deposited escrow directing satisfied, after the for transfer as requirements Section 24049 are provided out pay consideration, or purchase the claims of the price bona fide creditors of the licensee who file their claims with the escrow holder before the escrow holder is notified of its of the transfer of the if the department approval license or purchase price full, consideration is not sufficient to the claims in to distribute the consideration as pay follows: “First, salaries, of claims for benefits of wages, fringe employees sale, transfer, the seller or transferor earned or of an accruing prior opening thereof; escrow for the sale “Second, to the of claims of secured creditors to the extent of the which arise from the sale of the security; “Third, taxes; United States for claims based on income or withholding *6 24049; thereafter for claims based on tax other than taxes in Section any specified “Fourth, liens; the of claims on mechanics’ payment “Fifth, to the of escrow fees and the of claims for payment payment prevailing fees for services rendered and claims brokerage for reasonable fees for services attorney’s rendered. “Sixth, to the of claims for sold and delivered to the .transferor for payment goods rendered, resale at his licensed and the of claims for services premises payment or in connection with the of the licensed business. performed, supplied operation “Seventh, to the of all other claims. The if payment of these claims sufficient payment assets are not available for the of the claim in full shall be rata. payment paid pro “If the transferor licensee claim the escrow holder shall the disputes any notify claimant and the amount or rata amount thereof shall be retained the escrow pro holder for a The of 25 and if not period days, attached shall be to the transferor licensee. shall also agreement the escrow holder shall make the provide distribution within a reasonable time after the of the transfer of the license.” completion
884 seller; of of the benefits of claims for salary, fringe employees wages, creditors; “Third, the the of claims of secured second to Thus, taxes.” for claims based on income United States withholding would to defendants’ the give priority statutory language appear defendant United States’ claim for taxes. claims over unpaid salary However, of this conferral dissolves before the priority illusory of law. It is well settled and commands federal now paramount state indeed that federal law rather than law deter beyond argument liens one of is a tax lien mines the where them priority competing s.7 United States 363 U.S. (1960) asserted the United State v. (Aquilino 1368-1369, United States v. 509, 1365, 80 S.Ct. 1277]; 513-514 L.Ed.2d [4 S. v. 267, U. 211, 264, 213 75 Acri 239]; L.Ed. S.Ct. 348 U.S. (1955) [99 53, 56-57, & Bk. 47, U.S. 49-50 71 Tr. Sav. 340 L.Ed. (1940) Security [95 465 In United 1269.) F.2d States 1972) v. Cir. (8th S.Ct. 111]; Trigg of the Acri that the “relative lien court observed high . to be for is . . a federal United States taxes question always unpaid courts. The state’s characterization determined finally this liens, all does not bind its while necessarily good purposes, bench, In at 213 L.Ed. at case 267].) Court.” U.S. at (348 p. p. [99 determined, United States the trial court defendant acquired properly 6321,8 a “in 26 Code lien favor of the United States pursuant whether real or United States rights lien on to ...” Game. This arose belonging Mating September personal, 24, 1971, and was (26 the date the assessment U.S.C. § perfected of this rule to sale of alcoholic beverage 7Defendants contest the applicability 24074 was enacted licenses on the Amendment that section ground pursuant Twenty-first and therefore is not subject to the United States Constitution However, all other does not clause. Amendment supersede supremacy provisions Twenty-first LaRue regulation (California of the Constitution with respect 342, 350, at 390]) 93 S.Ct. and is aimed (1972) specifically L.Ed.2d 409 U.S. [34 it limitations when restricts states “traditional Commerce Clause from exempting use, distribution, or within its consumption destined for of intoxicants importation (1964) 377 U.S. L.Ed.2d (Hostetter borders.” 355, v. Idlewild Liquor Corp. [12 and other 1293].) portions Whenever Amendment S.Ct. Twenty-first conflict, resolved as follows: the conflict is are States Constitution potential Constitution, in the each must be considered light “Like other provisions other, (Id., at concrete case.” and interests at stake and in the context of issues any creditors of 332.) scheme among private Section 24074 merely provides priorities p. the state’s interest consumption that in no relates to regulating licensees way and distribution alcohol. tax or refuses to “If liable to neglects pay 8Section 6321 any person pay provides: *7 interest, amount, demand, addition additional the same after the amount (including any tax, thereto) accrue in addition to assessable costs that may or penalty, together shall of the States to rights be a lien favor whether real or to such belonging person.” personal,
885 Recorder of Los (26 lien with the notice of County. Angeles filing by 63239 the lien 26 United States section Under Code U.S.C. (f).) § claims, such claims and all later to all perfected superior unperfected of defendants. as those law, hand, law, determines whether not federal
On the other state 6321; fn. see U.S.C. (26 § has property" rights taxpayer “property States, can attach. v. United 8, the federal lien to which ante) (Aquilino Therefore, 1365, 509, L.Ed.2d 1368].) 363 U.S. “[t]he supra, [4 Federal case, where the as in all cases in this threshold question lien, extent and to what tax is whether asserts its Government could the tax lien to which or had ‘rights property’ ‘property’ taxpayer must courts both federal and state that In attach. answering question, aof rule that ‘in the law, has been the to state for it look application long the nature act, law controls in federal revenue determining be . . had in the . interest which sought taxpayer legal However, attached to tax lien has . . . once the the statute.’ reached by interests, of federal enter the we state-created province taxpayer’s law, held determines which we have consistently or asserted liens ‘rights against taxpayer’s ‘property’ competing ’’ 1368-1369]; at 512-514 L.Ed.2d at pp. property.’ (Aquilino, supra, pp. [4 1140-1141, 357 U.S. 55 L.Ed.2d United States v. Bess (1958) [2 Ltd. v. United States (7th 78 S.Ct. Avco Delta Canada 1054]; Corporation 1973) 697.) Cir. 484 F.2d
Thus, instant case narrows to us in the question presented whether Game to California law had Mating according “property” to which the in the funds held the escrow agent “rights property” claimants could attach. Defendant lien of defendant United States sale contend that Game was not entitled to Mating transferred, that until the license was held escrow creditors were all the bona fide could be transferred until Game 24074 and therefore in accordance with section Mating claims until had no specified prior “rights property” “property” 24074 were section paid. State United States v. on the case of Defendants rely heavily out of which arose Cir. 281 F.2d bankruptcy (9th California be valid as 6321 shall not (a) lien imposed by 9Section “The provides: lienor, interest, lien or judgment mechanic’s holder of a security against any purchaser, (f) has been of subsection until notice thereof meets requirements creditor his filed delegate.’’ Secretary *8 There, licensee was a California delinquent proceedings. States, of United to a warrant federal taxes. The of pursuant payment certificate. distraint, license seized his business including property, and the United States surren- was The licensee adjudicated bankrupt The which had the receiver in dered the certificate to bankruptcy. was sold at auction the receiver to certain meanwhile been renewed of Alcoholic Department purchasers, subject approval withheld its of the transfer Control. The Department approval Beverage and use state sales taxes of the license until unemploy- delinquent from the to ment contributions were paid purchase price pursuant thereof, the transfer was 24049. fn. ante.) section (See Upon result, As a was issued to the and a certificate purchasers. approved lesser amount from the United States received substantially of the sale. to recover the amount States sued the State California
The United taxes that to the state had retained contending permit delinquent such would be to defeat California to retain sums paramount right collect taxes and to render the the federal levy government Ninth Circuit Court that of the state. The claim subordinate to States’ tax to which the lien could attach that there was no held property Appeals transfer, that such until approval approved Department taxes, and therefore that of state conditioned upon prior taxes which the lien could attach until after such was no there however, is not as to had The court declared: “The been paid. question, United States. The is as of the tax lien question supremacy U.S.C. (26 § nature right property’ ‘property this we which that lien attached. Ordinarily, determining question had look to law. ... Here the license existed because the state state [II] value, If it was because the issued it. the licensee acquired something had it him. Whatever value the as state bestowed upon If it was have had to a its transferability. may purchaser depended upon transferable, had had made it so. If the state seen it was because state it has fit to issuance or transfer of conditions impose upon upon created, its demands are that is the state’s so wholly prerogative long has no The federal power arbitrary discriminatory. government be command the in this It has no to direct that area. power (Id., at 727-728.) seizure.” created the state for pp. purposes at bench is States that the case The United distinguishable argues in the last fn. (see ante)—the because section applicable refuse cited case—confers absolutely power *9 in the license if licensee is transfer of a the liquor delinquent paying 6, ante)—the taxes whereas section 24074 fn. section (see applicable in which the instant directs the action—merely proceeds derived from the transfer shall be (after by approval Department) distributed. To 24049 another Section argument way: gives put to refuse transfer and Department power liquor sale, to make available to creditors the its until thereby proceeds state taxes in the section have been Section delinquent specified paid. 24074 on the hand other confers no to defeat the transfer of the power license as is shown section 24074.1 fn. (see ante) by provides that within 10 after the license has been transferred with the days the escrow holder shall the creditors approval department, notify of the distribution of the assets held the escrow holder. If such assets are insufficient to full the creditors in escrow holder shall advise pay each filed creditor who a claim of the The total assets (a) following: asset; in escrow with him and the nature of each the name (b) placed each creditor who filed a claim the escrow and the amount of said against claim; creditor; the amount he each and (c) (d) proposes pay day 24074.1; ante.) see fn. (§ payment.
It is thus clear that the set forth in 24074 section are noi priorities conditions to the of the transfer that section approval Department, 24074 does not confer to refuse the Department power with, unless the are but that instead it sets priorities complied forth the for disbursement of the funds to the seller priorities belonging the transfer has been in accordance approved after with the escrow.10 v. (See 37 (1974) prescribed Doyle Coughlin 911, 917-918 701].) Once the transfer has been Cal.App.3d [112 Cal.Rptr. 24, 1972, occurred in this case on to the close of approved, May prior escrow, title to the Game to the lien proceeds passed Mating subject Game held in the priorities escrow which the Mating federal tax lien could attach.
This conclusion is consistent California law on the entirely prior v. Finale 39 777 (1974) subject. 562]; (Gough Cal.App.3d Cal.Rptr. [114 Atlantic doubtful that effect a state-desired scheme of as the federal pronouncement of a licenses from the attachment of language 10Moreover, even if City alone of our statute is not (1963) interest a state government in and of itself is 40 is within the N.J. empowered 24074 federal liens....” concerned, meaning insufficient lien 387 purported modify dispositive priorities [192 of section 6321 N.J.S.A. 33:1-26 A.2d to determine property rights (The 584].) condition the derogation Boss [26 the existence issue, U.S.C.].... Co., cannot Inc. Bd. Com'rs concepts v. a state immunize [1] nonexistence Thus, rights, law. “The legislative order to as far it is
888 911, 917-918; v. State 37 Golden Cal.App.3d Doyle Coughlin, supra, In the court held P.2d Golden 49].) (1955) Cal.App.2d [285 its transfer while derived from within the in escrow were “rights property” “property” reposing 6321), 26 U.S.C. Code section (now § 26 United States meaning *10 to such and tax lien attached that federal acquired priority the law, Defendant section under federal wage notwithstanding. as it read at that time11 section 24074 that since merely claimants urge to to distribute the rata escrow holder sale directed the pro proceeds not creditors, court the statute was the that timely recognized filing over the tax lien the creditors intended prior priority government give (id., now at further that since section 24074 646). p. They argue claims and for state over above federal asserts priorities specifically However, liens, court in did tax no has the Golden Golden longer vitality. of but itself to a limit statutory interpretation, specifically question in that the to set such indicated incompetent up priorities 10, federal the (see ante) of claims fn. because derogation lien sale thereof were which the attached proceeds the law the under settled law once lien attaches federal governs of tax liens. priority Finale, 777,
Moreover, the in court Gough supra, Cal.App.3d it the the of section 24074 as reads with effect presently interpreted where scheme for order of and held that the asserted priorities vendor license under section 24074 of creditors of a of a bankrupt Act, the in the Federal conflicts with priorities specified Bankruptcy Laws, Control section 7.2 of the Alcoholic Act General (Deering’s 11Former Beverage 3796), Act “At least seven before days statute to predecessor provided: the licensee the intended transferee transfer with filing a application board association, not to the or a shall an escrow with some person, establish corporation party transfer, holder, said shall with and said intended transferee deposit as escrow acting be, consideration, if there any full of the purchase escrow holder the amount price transfer, shall intended transferee said licensee and be also enter into an holder, in connection with said be with said escrow shall agreement deposited agreement, consideration, holder, pay out of said said escrow purchase price directing claims licensee file their said of the fide creditors of the as shall the claims of such with said escrow holder within said bona of the notice the recording of seven after period days or if such or consideration 1 of this section said claims in purchase price Subdivision provided full, rata said consideration shall sufficient to to distribute pro not be pay licensee; that escrow said said shall also said to said creditors of holder provide agreement within reasonable time after make such distribution a shall of the recorded notice of said license. A certified transfer completion intended transfer and copy the escrow holder a escrow by said agreement copy certified transfer shall be filed with the board be and correct thereof copy together true (Stats. 2960.) ch. application.” p. Federal Act controls. The court the case Bankruptcy distinguished United States v. State on 281 F.2d California, supra, ground section 24049 reserved creator of that affected rights whereas section 24074 to a certain right attempts rights grant priority class creditors of license holder. As out earlier in this private pointed we case this on a different basis in the tax lien opinion, distinguish context as section 24074 does not context: opposed bankruptcy to refuse to transfer the confer upon power transfer, creation of the from a thereby very conditioning proceeds but to establish creditors merely among following attempts priorities transfer. Nonetheless the result Golden entirely Gough consistent with our conclusion in escrow following to the vendor licensee approval Department belong lien law, claims as established when one subject *11 of the claims is a federal tax lien. The court in Doyle Coughlin, supra, 917-918, held that title to the escrow fund Cal.App.3d specifically is transferred the transfer of the the upon liquor by Department and that such transfer seller owns the sale upon to the claims of the seller’s filed creditors who their claims with subject the escrow holder the latter before was notified of its by transfer of license. approval trial
The court determined that the claim of defendant properly United ‘States a taxes, constituted lien for interest claim unpaid and the sum court and that such penalties upon deposited by plaintiff before the claim entitled to be from such fund claims of the other defendants.
The is affirmed. judgment J., J., McComb, J., Tobriner, J., Clark, J., Richardson, C. and
Wright, concurred.
MOSK, J. I dissent.
The here is not the conferral of a or the effect problem priority, were, liens on If it claims federal competing property. unquestionably whether, would be The when the fundamental issue paramount. state, would not exist its creation except by property can state from the nature and value government determining prevent which it creates. property The States States Code relies United which in relevant for a tax lien provides, part, “upon property whether real such personal, belonging rights person.” lien Thus in (Italics added.) determining validity government’s must whether there was we ascertain initially any property rights so, and if indebted to the government, belonging persons property to state value thereof. In so we look the nature and doing exclusively law; it held that the federal code section creates no has been property but attaches defined federally consequences rights merely Indus, v. (Ideco are defined state law. Division Dresser which by rights 165; 422 F.2d United States v. 1970) Chance Co. Cir. (5th Gurley Drilling Cir. 415 F.2d 144.) (5th a sheet of worth license is merely
Superficially tangible paper, Whatever value there be inherent its additional may farthing. Its transfer is created the State of California. artificially by possession demand, merit, worth is determined not intrinsic not by supply value, tests of market not other by any principles economics, limits but exclusively by monetary possessory If the the state. state were authority, prescribed regulating licenses, it could do under its the transfer of police prohibit instant would be in the there no rights power, *12 case and could no lien. thus the government By parity impose a satisfaction when the state transfer reasoning, only upon permits unreasonable, conditions, not which are statutory admittedly precise those conditions. exist subject property rights property Cir. (9th v. State The rule was well-stated in United States California had state 726, 728: existed because the 281 F.2d “Here the license value, it was because it. issued If the licensee something acquired as had it him. Whatever value state bestowed upon it was If its to a have had transferability. may purchaser depended upon If the had seen had it so. state transferable, was the state made it because it has fit to issuance transfer conditions property impose upon upon are as created, so its demands that is the state’s wholly long prerogative has no not The federal power arbitrary discriminatory. government be in this It has no to direct that command the state area. power created state for of federal seizure. purposes such
“The has no United States contends that right impose States; a control that state’s a condition the claims of the United against that its over the licenses is derived from issuance police power; the conditions here the state relate to revenue and imposed by control. police that state, conditional demands aof
“Assuming, arguendo, unrelated transferred, to the to be would be as privilege sought regarded arbitrary, we cannot is such the case here. If (as here) say conditions be lawful the sense that are and reasonable demands to make they proper of an constitute a limitation applicant, they upon right which that constitutes applicant upon right the values which attach to that Those values and no property. greater values became a estate and fell within the reach of part bankrupt the United States.” turn, then,
I to determine the nature and extent interest created the State of California. It seems evident that as to the escrow funds which claim, a earners have valid there is wage no property to such rights indebted to the property “belonging person” government, United States Code section 6321. The required by earners are not indebted to the government property belonging to them is not ato tax lien. subject
But, the the state conditions majority argue, statutory apply disbursement of funds in escrow as from the transfer of the distinguished are, hold, license. There However, two distinct such they processes. of what is attempted fragmentation scheme essentially unitary unrealistic. utterly The has made it clear Legislature that the escrow is an abundantly of the transfer into escrow is not integral part process. Entering act; the statute 24074). directs that it be (§ shall established voluntaiy Sections in the Business and Professions Code to the entire relating *13 24070; 24072; fees, transfer notice of intended § subject § (transferability, licenses, 24073; holder, escrow, 24074; transfer duties escrow § § 5). all 24074.1) are included in the same article of the code art. (ch. § That are interrelated and inseverable is indicated section they 24074.3, with the transferee file requires prospective a statement that the has been consideration department deposited—not with transferor—but with the escrow holder. proposed
The statutes thus that transfer totally dependent upon contemplate holder, other and the funds or consideration to the escrow of the escrow 24074.1 duties holder section require compliance or a consummated and a be before right may his If holder fails created. the escrow duty statutoiy complete transfer fails. attempted In this lieu of
A 24074.4 confirms interpretation. reading file with the licensee an escrow a may department corporate opening of the licensee shall be that all creditors faithfully paid, guarantee has the license until not transfer shall guarantor “department section, while not claims in full.” The creditors’ apposite paid case, intent make insever- instant is illustrative legislative and satisfaction transfer of between able relationship the. an escrow. claims, in this instance creditors’ through out his amicus General In the as final Attorney points analysis, The is involved here. brief, curiae a matter public policy important in section position wage preferred recognized Legislature labor, and thus for their not been imposed earners who have creation of condition to them a precedent determines whether state law funds. It is clear that interest in the escrow lien can attach. to which a federal interest there exists a property L.Ed.2d 363 U.S. 512-513 (1960) v. United States [4 (Aquilino 51, 55 1368-1369, Bess 357 U.S. (1958) States v. 80 S.Ct. 1277]; [2 1135, 1140-1141, Canada 78 S.Ct. Avco Delta 1054]; L.Ed.2d Corporation 692, 697, 415 U.S. Cir. 484 F.2d cert. den. (7th Ltd. United States in this case 1444].) 94 S.Ct. Under circumstances L.Ed.2d [39 are not claimants. the relevant funds in escrow They belong which a indebted to property, belonging persons government, tax lien attach. may I would reverse the judgment.