Appeal from the District Court of the United States for the Southern’Division of the District of Idaho; Prank S. Dietrich, Judge.

Suit by the Equitable Trust Company of New York as trustee under deeds of trust by the Great Shoshone & Twin Falls Water Power Company against the Great Shoshone & Twin Falls Water Power Company and others, in which the American Waterworks & Electric Company sought to intervene and file an intervening complaint against Guy I. Towle and others. From the decree (228 Fed. 516), and from an order denying leave to intervene, plaintiff and the intervener appeal.

Th.e Great Shoshone & Twin Falls Water Company was a public service "corporation of the state of Idaho, engaged in generating and supplying electricity to various persons and various places in the southern portion of that state, and having a large amount of both real and personal property. It subsequently became insolvent, with a number of general creditors, and one, at least, secured one. One of its general creditors, Guy I. Towle, commenced a suit, in his own behalf and in behalf of such of the other creditors as might join therein, against the company in the court below on the 2d day of November, 1914, alleging, among other things, its insolvency, and that he was a creditor of the corporation, and asking for the appointment of a receiver of its property. The defendant immediately appeared, and by answer admitted the allegations of the bill, and joined in the request for a receiver, with the result that the court on the same day appointed William T. Wallace such receiver, and enjoined every one from attaching or levying upon or seizing any of the property of the company. Among the creditors of the power company was a corporation styled the American Waterworks & Electric Company, its claim being $1,268,434.66, or thereabouts.

Carl J. Hahn, as administrator of the estate of Harry M. King, deceased, was a judgment creditor of the insolvent corporation, and the Equitable Trust Company of New York was sole trustee under a deed of trust made by It May 1, 1910, and under supplemental mortgages dated June 21, 1911, and April 7, 1913, respectively, covering all of the real and personal property of the power company; and on the 14th day of April, 1915" that trustee commenced in the court below a suit to foreclose the deed of trust and the supplemental mortgages, alleged to have been given to secure an issue of bonds aggregating $2,230,000, making defendants to the foreclosure suit the mortgagor power company, William T. Wallace, as receiver of its property, Towle, the complainant in the receivership suit, and the judgment 'creditor Carl J. Hahn, as administrator of the estate of Harry M. King, deceased. A supplemental bill was subsequently filed by the trustee, praying, among other things: “That the court find and adjudge that the principal of the said bonds issued and outstanding, as alleged in the bill of complaint herein, in the amount of $2,230,000, is due and payable; * * * that an account be had and taken of the bonds, interest coupons, and interest secured by said deed of trust and supplemental mortgages, and the amount due thereon, with the names of the lawful holders or owners thereof, be ascertained; that -an account be taken of all property of every kind conveyed or pledged by said deed of trust and supplemental mortgages, or intended so to be, whether acquired before or after the execution and delivery thereof; * * * that the defendant Great Shoshone & Twin Falls Power Company and William T. Wallace, as receiver of its property, may be decreed to pay, within a short time to be fixed by the court, to the holders of the bonds and coupons secured by said deed of trust and supplemental mortgages, or to your orator as trustee for said holders, the principal amount of said bonds and the defaulted interest thereon.”

To the bill for the foreclosure Hahn, as administrator, filed an answer setting up the judgment obtained against the power company, and subsequently L. M. Plumer and E. B. Scull, as executors of the estate of L. L. McClelland, deceased, having filed their claim for allowance in the general creditors’ suit, and having obtained the allowance and approval thereof, intervened by leave of the court in the foreclosure suit, and by answer to the bill of complaint therein attacked the validity of the trust deed and mortgages.

Similar steps were taken by one .Take M. Shank and the defendant Towle, and they also were permitted to intervene in the foreclosure suit and to file an answer therein assailing the validity of the trust deed and mortgages; the ground of each of the said attacks being, in substance, that in so far as the personal property was concerned the deed of trust and mortgages were void as against those creditors because of certain provisions of the statute of the state of Idaho, including section 3408 of its Revised Codes, which declares that “a mortgage of personal property is void as against creditors of the mortgagor * * * unless * * * it is accompanied by the affidavit of the mortgagor that it is made in good faith,” etc.

Subsequently the complainant in the foreclosure suit moved to vacate eacli of the orders allowing the interventions to be filed and to dismiss each of the answers filed by the interveners, which motions were by the court denied. Thereupon the allegations in the answers of the interveners were by agreement of counsel deemed denied, and the cause came on for trial, the receiver Wallace having, by direction of the court, also filed an answer which, in addition to various admissions, alleged and denied as follows: “That at the time of the appointment of the receiver there was on hand a large and miscellaneous assortment of construction material such as poles, wire, cross-arms and insulators, transformers, and other material of like kind intended for construction purposes; that a portion of said material had been intended to be used for the construction of a line from Mountain Home to Boise, which lino has been abandoned and the material therefor was on hand; that a portion of said material not needed by the defendant company or the receiver has been sold by said receiver to the Southern Idaho Water Power Company, and an accounting therefore has been made. That in addition to this, at the various offices of the company in Twin Falls, Oakley, Shoshone, Jerome, Glenns Ferry, Gooding, and Mountain Home, a stock of lamps, fans, small motors, heating devices, and other merchandise was kept on hand for the convenience of the customers, of the comjiany and to supply them with appliances which they needed, these appliances being in the nature of appliances ordinarily carried in electric stores. * * ~ That defendant has no knowledge, information, or belief sufficient to enable him to answer as to whether or not said bonds were lawfully or properly sold or whether the purchasers thereof obtained any title thereto, and defendant therefore denies the same.”

The prayer of the answer of the receiver was: “That the court first ascertain the amount actually due upon the obligations of the Great Shoshone & Twin Palls Water Company, defendant herein, and that only so much of the property of said company be sold as is covered by the liens described in the bill of complaint herein, and that the defendant be given all proper relief.”

The record shows these further facts: That before the complainant closed its case an attorney of the court informed it that he had received a telegram from the president of the power company (who was also president of the American Waterworks & Electric Company), requesting him to file an answer in the ease on behalf of the power company, admitting all of the allegations of the hill and supplemental bill, and that he had prepared such an answer which he asked leave to file, which application the court took under consideration, but subsequently denied. And, further, that the claims of Jak M. Shank in the sum of $4,390, Guy I. Towle in the sum of $13,903.01, ano It. M. Pi timer and E. B. Scull as executors in the sum of $15,625 had been allowed and approved as claims against the power company in the general creditors’ suit, and that the deed of trust and supplemental mortgages were recorded in tlie mortgage records of 1he several counties as alleged in the bill of complaint, but were not recorded in the chattel mortgage records.

A certified copy of the unpaid judgment of Hahn, as administrator, against the power company was also introduced in evidence.

The trial court held and decreed that the lien created by the deed of trust and supplemental mortgages was subject and subordinate to the claims of the intervening creditors “as to all such articles of personalty as do not form a constituent part of and are not presently necessary for the maintenance, repair, and operation of the hydroelectric, generating, transmitting, and distributing systems of the power company or reasonably necessary in conducting its business as a public service corporation, such personalty consisting of construction supplies and materials fn excess of the present needs of the power company in conducting its business, and of bills and accounts receivable, stocks of merchandise which are intended for sale to the public in the ordinary course of retail business, the public ferry at Shoshone Falls, and stock owned by the power company in other corporations, which said claims have been approved and allowed in the respective amounts following, to wit:

Guy I. Towle...............................................$13,963 01

Oarl J. Hahn, as administrator of the estate of Harry M. King, deceased ................................................. 6,225 15

L. M. Plumer and E. B. Scull, executors of the estate of L. L. McClelland, deceased...................................... 15,625 00

Jake M. Shank.............................................. 4,390 00

and there is due the said claimants respectively the sums aforesaid, with interest thereon at the rate of 7 per cent, per annum from the date hereof.”

Thereupon this stipulation of the respective counsel was entered into: “It is hereby stipulated by and between the parties hereto, that in view of the decision of the court that the lien of complainant’s mortgage is, as to certain personal property, subject and subordinate to the claims of certain of the defendants and the interveners, and in view of the further fact that it is to the interest of all parties to this suit and creditors of the Great Shoshone & Twin Falls Water Power Company that all the property, rights, and assets of said corporation be sold as an entirety and without delay, the decree in this cause shail provide for the sale of all of the property of the said defendant Great Shoshone & Twin Falls Power Company in block and as an entirety, but the sale of said premises shall not be construed as a waiver of the right of appeal of any party to this cause as to any matter relating to the distribution of the proceeds of sale, or as to any matter involved in the decision of the court rendered herein on the 17th day of November, 1915, but all objections that might be raised on an appeal from the decree herein may be raised with the same force and effect on an appeal taken after the sale of such property under said decree.”

Subsequently, and before the making of the sale directed by the decree, this further stipulation was entered into: “It is hereby stipulated and agreed by and between the parties hereto, through their respective solicitors, that the personal property referred to in paragraph second and other paragraphs of the decree entered in this cause on December 6, 1915, consisting of construction supplies and materials in excess of the present needs of the power company in conducting its business, and of bills and accounts receivable, stocks of merchandise which are intended for sale to the public in the ordinary course of retail business, the public ferry at Shoshone Falls, and stock owned by the power company in other corporations, being the property upon which the interveners and certain of the defendants were adjudged to have claims prior and superior to the lien of complainant, is of the reasonable value of $45,000. It is further stipulated and agreed that in apportioning the proceeds derived from the sale of the property of the defendant'power company under said decree, said sum of $45,000i shall be placed into what is in said decree sometimes called the ‘Unsecured Creditors’ Fund,’ to be apportioned and distributed as in said decree provided, relative to the payment and distribution of such Unsecured Creditors’ Fund. This stipulation is made to avoid the necessity of a hearing for the purpose of apportioning the proceeds of sale, as provided in paragraph 14 of said decree, and nothing herein contained shall be construed as a waiver of any right by any of the parties (to) except or object to or appeal from any of the provisions of said decree, or any order hereafter made based on said decree.”

On January 8, 1916, all of the property of the power company was sold at public sale under the decree of foreclosure and bid in for the sum of $2,000,000, the upset price theretofore fixed by the court, and on the following February 14th the motion for confirmation of the sale came on for hearing, and it was on that day confirmed. Thereafter the American Waterworks & Electric Company presented to the court a complaint in intervention, which it asked leave to file, to which were made defendants Guy I. Towle, Carl J. Hahn, as administrator of the estate of Harry M. King, deceased, defendants in said cause, and L. M. Plumer and E. B. Scull, administrators of the estate of D. L, McClelland, deceased, and Jake M. Shank Interveners therein, the roco.rd reciting, “And the above and foregoing amended complaint, when presented to the court, on the 28th day of February, 1916, was unverified, and the court stated at the hearing that the amended complaint in intervention might be used in its unverified condition in the presentation of application for leave to intervene, with the understanding that the said amended complaint in intervention should be verified by the proper officers, and when so verified might be lodged as of date the 28th day of February, 3916. This permission to hear the application of the American Waterworks & Electric Company on its unverified complaint in intervenúon was granted to the American Waterworks & Electric Company for the reason that petitioners L. M. Plumer and E. B. Scull, executors of the estate of T L. McClelland, deceased, Jake M. Shank, Guy I. Towle, and Carl J. Hahn, as administrator of the estate of Harry M. King, deceased, had noticed for hearing at 10 a. m. on the 28th day of February, 1916, their petition for an order upon the special master to pay the prior lien claims of those petitions, and counsel for the American Waterworks & Electric Company liad asked leave of the court to present the application of the American Waterworks & Electric Company on the unverified complaint in intervention in order that the two matters might come before the court on the same morning.” The application was by the court denied.

The appeals are by the trustee and the American Waterworks & Electric Company.