Case Name: PUSEY & JONES v. PENNSYLVANIA PAPER MILLS
Court: United States Circuit Court for the Middle District of Pennsylvania
Jurisdiction: United States
Decision Date: 1908-08-25
Citations: 163 F. 672
Docket Number: No. 44
Parties: PUSEY & JONES v. PENNSYLVANIA PAPER MILLS.
Judges: 
Reporter: Federal Reporter
Volume: 163
Pages: 672–672

Head Matter:
PUSEY & JONES v. PENNSYLVANIA PAPER MILLS.
(Circuit Court, M. D. Pennsylvania.
August 25, 1908.)
No. 44,
October Term, 1908.
1. Liens — Foreclosure—Decree of Sale.
In a decree for tbe sale of property to pay liens, it is correct practice to determine tbe relative priority and order of payment of sucb liens, but it must be on notice to tbe parties in interest.
2. Judgment — Res Judicata.
Tbe establishment of a mechanic’s lien by judgment against tbe debtor is not conclusive as to its validity, or right to priority as against tbe trustees of tbe first mortgage bondholders who were without notice of tbe proceeding.
In Equity. Sur petition of trustees for first mortgage bondholders to modify decree giving priority to the mechanic’s lien of the George M. Newhall Engineering Company.
W. H. Rhawn, for the motion.
Sheldon Potter and C. W. Miller, opposed.

Opinion:
ARCHBAED, District Judge.
It was correct practice to undertake in the decree of sale to determine the relative priority and order of the payment of the different liens upon the property (27 Cyc. 1761; Jerome v. McCarter, 94 U. S. 734, 24 L. Ed. 136), but not, of course, without notice (Pitts., Cin. & St. L. R. R. v. Marshall, 85 Pa. 187), which not having been given in the present instance, the decree as it stands cannot be maintained. Notwithstanding the judgment obtained by the George M. Newhall Engineering Company on the mechanic's lien which they hold, it is still open to the first mortgage bondholders to show that the lien is invalid or not entitled to the priority claimed for and accorded to it by the decree. Safe Deposit Co. v. Iron & Steel Co., 176 Pa. 536, 35 Atl. 229; Prudential Trust Co. v. Hildebrand, 34 Pa. Super. Ct. 249. It would be competent, as well as of advantage — the parties being now .before the court — to go into this question and settle it before the sale. ' But the time is short and the facts somewhat complicated, and I have concluded under the circumstances to reserve it, as asked, until the hearing on the distribution of the proceeds.
The decree of sale will therefore be modified by striking out the reference to the mechanic's lien of the -George M. Newhall Engineering Company, as well as to that of the Goulds Manufacturing Company, which latter for the same reason may as well go out with the other. And it is so ordered.