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 use taxes. The Bankruptcy Court disallowed the claim. No appeal was taken from that order.
As part of the final discharge in bankruptcy, the Court included an injunction against anyone pursuing claims against Century or its assets, save only certain claims not at issue here.
It is argued that the district court’s finding of the Board in contempt should be reversed and the injunction limited so as to permit the Board to proceed against Systems under the successor liability statute. However, the issue that would allow the Board to so proceed has been decided by the earlier bankruptcy proceedings. Whether *344correctly or incorrectly decided, the determination of the Bankruptcy Court precludes the Board from attaching successor liability to Systems and, therefore, the injunction and contempt citation should stand as issued.
Consider first, the language of the statute. Section 6811 of the California Revenue and Tax Code provides:
“If any person liable for any amount under this part sells out his business or stock of goods or quits the business, his successors or assigns shall withhold sufficient of the purchase price to cover such amount until the former owner produces a receipt from the board showing that it has been paid or a certificate stating that no amount is due.”
Section 6812 of the California Revenue and Tax Code provides in pertinent part:
“If the purchaser of a business or stock of goods fails to withhold purchase price as required, he becomes personally liable for the payment of the amount required to be withheld by him to the extent of the purchase price, valued in money a
While Section 6812 attaches personal liability to the purchaser of the business, before such a liability may attach, Section 6811 requires a two-step determination be made. First, the seller must be identified and, second, it must be decided whether that seller has a tax liability.
Knudsen Dairy Products Co. v. State Board of Equalization, 12 Cal.App.3d 47, 90 Cal.Rptr. 533 (1970), assists in identifying the seller.1
In the case before us, Century is obviously the seller. Century sold Automation’s assets, the assets of a wholly-owned corporation, and received the entire purchase price.
This presents the second issue — whether Century had a tax liability. However, this issue has already been decided in the bankruptcy proceedings. When the Board filed the claim against Century for the tax due from Automation, the bankruptcy referee disallowed the claim in its entirety on the grounds that it described a debt which was not a debt of the bankrupt. The validity of the Bankruptcy Court’s determination cannot be of any consequence to this Court. The Board should have appealed the decision there and, not having done so, is barred from asserting its invalidity now.
It was the Board’s activities in pursuing its claim that led to the District Court’s order finding the Board in violation of the Oklahoma injunction.
The facts, as this Court must find them, show that Systems acquired assets from a seller who had no tax liability and, as such, Systems may not be pursued under the successor liability statute.
We hold that the Board had its bite at the apple in the Oklahoma Bankruptcy Court. The Board’s failure to appeal from the order disallowing its claim ended the matter. The District Court correctly found the Board in violation of the Oklahoma injunction in attempting to pursue its claim against Century’s assets.
The judgment is AFFIRMED.
. In the Knudsen case, Pix, a super-market chain, had made purchases from Creamery, a distributor of dairy products, and had become substantially indebted to Creamery. Pix’s operations began to slip to the point where Pix could no longer remain current in its obligations to creditors. In order to assure a market for its dairy products, Creamery purchased Pix’s outstanding stock and made considerable loans to Pix. Pix’s operations continued to deteriorate and eventually an agreement was entered into between Pix and Creamery whereby Pix would make cash payments to all its liquidated creditors, except Creamery. After the cash payment, and pursuant to the agreement, Pix transferred all its operating assets to Dairy, a wholly-owned subsidiary of Creamery. Dairy then issued to Creamery a promissory note equivalent to the value of the assets which it received. Creamery then credited Pix, in reduction of its indebtedness, in the amount of the value of the assets transferred. The suit arose when Dairy was held liable under the successor liability statute for Pix’s tax indebtedness. Although Dairy’s liability was upheld, it is instructive to note that Pix was considered the “seller” of its own assets. 90 Cal.Rptr. at 538. Notwithstanding the stock purchase, the Pix-Creamery relationship was that of a debtor-creditor. In addition, Pix received the consideration from the transaction, in the form of a debt reduction.