Irving Sulmeyer, Etc. v. Miller Engineering Co.

This case is the aftermath of Miller v. Sulmeyer, 9 Cir., 263 F.2d 513 . There we held that when bankruptcy eventuated the Millers lost the lien of a chattel mortgage because of 79 days delay in the recording thereof. The mortgaged personal property having been repossessed and sold by the Millers to a bona fide purchaser (and thus unrecoverable), we reluctantly upheld the district court in awarding the trustee damages against the Millers for the amount of $82,500, the proceeds of the sale. Our mandate did not foreclose consideration of whether the Millers were entitled to certain offsets for expenditures they had made in connection with the repossession (and after) from the debtor Deleon Corporation, now Sulmeyer’s bankrupt.

When the case went back to the referee, the trustee conceded, and we think for all time, the validity of offsets for •costs in the amount of $3,641.82. But he disputed offsets as follows:

Attorney fees paid Millers’ attorneys .............. $ 5,000.

A finder’s fee paid to one who found the purchaser who

paid $82,500 ............ 5,000.

Audit of records .......... 377.

$10,377.

'The referee denied the above items. The ■district court reversed the…