Lillian Schlothan v. Territory of Alaska, Territory of Alaska v. Lillian Schlothan

This mortgage foreclosure case presents questions concerning the priorities as between a statutory lien of the Territory of Alaska for unpaid license taxes and a purchase money mortgage. The trial court determined by summary judgment that the tax lien had priority as to some, but not all, of the unpaid taxes. The mortgagee has appealed, and Alaska has cross-appealed.

The facts are not in dispute. Prior to June 19, 1951, Lillian Schlothan was the owner of certain tideland and dock property in Ketchikan, Alaska. The property was then being used for storage and warehouse purposes and had never been used as a cannery. On the indicated date she sold this property to Sigmund Einstoss, executing a quitclaim deed and taking back a purchase money mortgage for the full purchase price of $25,000. The mortgage was duly recorded on June 28, 1951.

Einstoss was then and for some time had been engaged in the fishing and canning business throughout Alaska. Shortly after acquiring the Schlothan property, he converted it into a cannery and canned salmon there during the remainder of 1951. During this period, as before, he also canned salmon at other places in Alaska.

On November 2, 1953, Alaska…