D.W. Standrod & Co. v. Utah Implement-Vehicle Co.

• Decision Date: 24 May 1915
• Docket Number: 2437.
• Citation: 223 F. 517
• Parties: D. W. STANDROD & CO. v. UTAH IMPLEMENT-VEHICLE CO.
• Court: U.S. Court of Appeals — Ninth Circuit

223 F. 517

D. W. STANDROD & CO. v. UTAH IMPLEMENT-VEHICLE CO.

No. 2437.

United States Court of Appeals, Ninth Circuit.

May 24, 1915

N.C Mickelson, the owner of certain real estate in the district of Idaho, during the summer of 1910 caused a building to be erected thereon. Thereafter, on February 7th, March 7th March 10th, March 11th, and May 1st, all in 1911, five mechanic's liens were filed for work done and material furnished in the construction of the building. Within six months from the date of the filing of the respective liens the lien claimants brought suits to foreclose their respective liens. Prior to the filing of the liens, and on January 2, 1911, Mickelson and his wife executed to E. E Rodgers and F. C. Rodgers a mortgage on said property to secure the sum of $3,000. Early in April, 1911, Mickelson was adjudged a bankrupt. On January 11, 1912, a suit was commenced to foreclose the Rodgers mortgage. Thereafter all the suits were consolidated, and on November 25, 1912, a final decree was entered, wherein it was ordered that the property be sold. A sale was had pursuant to the decree, and the property was sold to D. W. Standrod & Co., a corporation, as trustee for the mortgagees and for the lien claimants, for the sum of $6,728.41. Mickelson was indebted to the appellee herein, the Utah Implement-Vehicle Company, a corporation of the state of Utah, in the sum of $12,575.75 on notes and open account. To secure such prior indebtedness, he executed to the appellee on February 6, 1911, a note for said amount and a mortgage on the real estate involved herein, which mortgage was, on February 21, 1911, duly recorded. Although the mortgage was recorded prior to the commencement of the foreclosure of the mechanics' liens and the foreclosure of the Rodgers mortgage, the appellee was not made a party defendant in any of those suits. On May 29, 1913, the appellee commenced the present suit in the court below for the foreclosure of its mortgage, alleging that its lien on the property was second only to that of the Rodgers mortgage, and that the lien of the lien claimants was extinguished as to the appellee's mortgage by reason of the fact that no proceeding was brought by the lien claimants against the appellee within the six months limited by the statute of Idaho. The trustee, Standrod & Co., in its answer to the bill, denied the validity of the appellee's mortgage on the ground that the same was taken for a prior indebtedness, and that Mickelson, at the time of the execution of said mortgage, was insolvent, as the appellee well knew, and that the mortgage was given by the bankrupt and was received by the appellee for the purpose and with the intention of securing a preference on its part over the creditors of said Mickelson. It was the decree of the court below that the mechanic's liens were extinguished as to the appellee, but that there was due on the Rodgers mortgage $4,616.58, which sum was ordered to be first paid out of the proceeds of the property which the court directed to be sold. On the sale the appellee bought in the property for $8,000, and paid Standrod & Co., the trustee for E. E. and F. C. Rodgers, the sum of $4,616.58.

William A. Lee, of Blackfoot, Idaho, for appellant.

Clency St. Clair and Charles C. St. Clair, both of Idaho Falls, Idaho, for appellee.

Before GILBERT, ROSS, and MORROW, Circuit Judges.

GILBERT Circuit Judge (after stating the facts as above).

A motion is made to dismiss the appeal on the ground that the appellant, Standrod & Co., waived its right of appeal by accepting and retaining $4,616.58, a portion of the proceeds of the sale, and upon the ground that, while a severance was granted by the lower court, the severance was not permissible, and that no citation on appeal was issued to Bowman, the trustee in bankruptcy of the estate of Mickelson.

We find no merit in the motion. The right of Standrod & Co., as trustee, to appeal on behalf of the lien claimants, is not affected by...