"The appeal pending before this court in the above styled cause grows out of a judgment rendered by the District Court of Gregg County, in favor of Howard Dailey, as intervening plaintiff, against W. L. Nix, in which Dailey was awarded a recovery for a portion of the amount sued for, the establishment of the validity and priority of his chattel mortgage lien on certain personal property, and the right to have his judgment paid out of certain funds held in the registry of the court. The funds from which payment was ordered were placed in the registry of the court by a previously appointed receiver of the property of the defendant, Nix.
"W. L. Nix was, for a time, engaged in the refinery business, under a trade name of Texas Refinery. He manufactured and distributed motor fuel and thereby became liable for the payment of certain taxes thereon to the United States and to the State of Texas. He failed to pay certain of those taxes, and when suit was instituted against him by the original owner of certain notes owing and to foreclose certain chattel mortgage liens previously executed by him to secure their payment, a receiver was appointed, who, under orders of the court, leased the refinery plant for a time and later sold its physical assets. The proceeds coming into the receiver's hands were deposited in the registry of the court.
"We believe that the following statement from the entire record will suffice to place before the Court the points involved:
"M. R. Ingram sued W. L. Nix, doing business in the trade name of Texas Refinery, and Heartfield Refinery Company, Inc., in a district court of Gregg County, Texas, for recovery on a note in the principal sum of $1,103.49, with interest at 8% per annum from its date along with the usual and customary ten per cent attorney fees, seeking a foreclosure of a chattel mortgage lien on six 250-barrel run down tanks, and one 1000-barrel storage tank, alleged to be a part of the equipment used in connection with a refinery. The note and mortgage were alleged to have been executed by Heartfield Refining Company, Inc., to plaintiff, on May 11th, 1933, and that the chattel mortgage lien was forthwith filed for record.
"Further allegations are to the effect that subsequent to the execution and delivery of the note and mortgage, Heartfield Refinery Company, Inc., for a valuable consideration, sold and delivered to defendant, W. L. Nix, the mortgaged property
and that Nix assumed to pay plaintiff said indebtedness evidenced by the note.
"Plaintiff's pleadings further show that the indebtedness is past due and unpaid, that demand has been made therefor and that Nix is insolvent. Other allegations state facts which, if true, would authorize the appointment of a receiver for the business operated by Nix.
"Prayer was for the debt and foreclosure of the chattel mortgage lien and for a receiver; that a sale of the property by the receiver be ordered and that the proceeds of such sale be applied to the liquidation of plaintiff's debt and for general relief.
"After notice, the court heard the application and entered an order appointing a receiver of the business operated by W. L. Nix, in which order, among other things, it is recited: "* * * And the plaintiff appearing by counsel and the defendant having appeared, and plaintiff having announced ready on his application, the court having read the verified oath of complaint and hearing the statement and admissions in open court, is of the opinion and finds that the same presents the proper case authorizing the appointment of a receiver, ex parte, and for granting the relief shown in this order.' J. G. Strong was appointed receiver, his bond set and his duties defined.
"The Federal Government, the State of Texas and R. P. Ash intervened as creditors of W. L. Nix. Ash's claims consisted of two notes secured by chattel mortgages. The first note was for $1,750.00, dated April 27th, 1933, with 8% interest per annum from date and ten per cent attorney fees, secured by a chattel mortgage lien on what was known as the Heartfield Refining Company plant (excepting the part previously mortgaged to plaintiff). Ash's second note was in the sum of $4,651.86, dated September 19th, 1933, with 8% interest per annum from date and attorney fees, secured by a chattel mortgage on one 1500-barrel capacity Pipe and Still, Water Cooling Tower, Laboratory Building and Equipment, Pipe and Equipment in Water Well, 2000-barrel capacity bubble tower, Bath house and equipment, Office furniture, typewriter and filing cabinets. It was alleged these notes were both due and unpaid. Prayer in that intervention was for debt and foreclosure of the lien on the property described.
"The State of Texas intervened under its claim for $28,870.16, then due the State by W. L. Nix for taxes, penalty and interest, on motor fuel manufactured and distributed, upon which the tax had not been paid under Article 7065a, Vernon's Civil Statutes [article 7065a—1] et seq., and for a foreclosure of its alleged first and preferred lien on all the property of W. L. Nix, including that described in plaintiff's and Ash's alleged chattel mortgages.
"The United States, acting by and through W. A. Thomas, Collector of Internal Revenue for the Second District of Texas, intervened, made proof of and asked for judgment for its debt of $20,907.61, for taxes and penalties due on motor fuels manufactured and sold by Nix, for which no payment had been made. This intervener claimed and asked for a foreclosure of its first and preferred lien on all property of Nix, under and by virtue of Section 3466 of Revised Statutes of the United States, Section 191, Title 31, U.S.C.A.
"Thereafter, on January 21st, 1938, Howard Dailey was permitted by the court to intervene, as the sole plaintiff under allegations that he had acquired all the rights in the subject matter theretofore held by the original plaintiff, M. R. Ingram, and intervener R. P. Ash. An amended petition was at that time filed by intervener Dailey, alleging the indebtedness and liens acquired by him, largely in the same language previously set out by Ingram and Ash. Further allegations were made that the receiver, theretofore appointed by the court, had, under orders of the court, sold the assets of W. L. Nix, doing business in the name of Texas Refinery, and had turned into the registry of the court (less costs and expenses incurred) the total sum of $7,466.92.
"Prayer was for allowance of his indebtedness, that he be given judgment for the amount and that his claim and liens be decreed as prior and superior to all others of the parties, whether plaintiff, defendants or interveners, and that an order be entered directing payment from the funds in the registry of the court, for costs and general relief.
"Interveners, United States and the State of Texas, renewed their pleas of intervention in much the same way as in their original pleadings, and further answered and denied that the substituted plaintiff, Dailey, was entitled to the relief sought. Each intervener insisted upon its respective rights and priorities theretofore pleaded.
"Upon trial to the court, evidence was heard, about which there is little or no controversy under the issues involved here. Judgment was entered favorable to the intervening plaintiff, Dailey, as well also more favorable to the intervener, United States, than to the State of Texas.
"The court found in his judgment that Dailey was...
