business as a public service corporation, such personalty 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, which said claims have been approved and allowed in the respective amounts following, to wit: Guy I. Towle..... Carl J. Hahn, as administrator of the estate of Harry M. King, L. M. Plumer and E. B. Scull, executors of the estate of L. L. ... . $13,963 01 6,225 15 15,625 00 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 shall 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 $45,000 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 L. L. McClelland, deceased, and Jake M. Shank interveners therein, the record 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, 1916. This permission to hear the application of the American Waterworks & Electric Company on its unverified complaint in intervention 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 L. 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 these petitions, and counsel for the American Waterworks & Electric Company had 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. Murray, Prentice & Howland, of New York City, and Richards & Haga and J. L. Eberle, all of Boise, Idaho, for appellant Equitable Trust Co. of New York. Wyman & Wyman, of Boise, Idaho, for appellant American Waterworks & Electric Co. Martin & Cameron, of Boise, Idaho, for appellees Plumer and Scull. ROSS, Circuit Judge (after stating the facts as above). [1] We readily concede that none of the intervening creditors of the insolvent corporation had or acquired any lien on any of its personal property, but are unable to sustain the contention of the appellant that the court below erred in permitting the intervention of such of the general creditors who asked to intervene prior to the entry of the decree of the court. One of such creditors had obtained judgment against the insolvent, and the demands of the others of them had been presented and allowed as claims against the insolvent debtor. Section 3418 of the Revised Statutes of Idaho provides, with reference to mortgages upon property within the state, as follows: "The right of the mortgagee to foreclose, as well as the amount claimed to be due, may be contested in the District Court by any person interested in so doing, for which purpose an injunction may issue if necessary." And section 4111 of the same Code reads: "Any person may, before the trial, intervene in an action or proceeding, who has an interest in the matter in litigation, in the success of either of the parties, or an interest against both. An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, or by uniting with the defendant in resisting the claims of the plaintiff, or by demanding anything adversely to both the plaintiff and the defendant, and is made by complaint, setting forth the grounds upon which the intervention rests, filed by leave of the court, and served upon the parties to the action or proceeding who have not appeared and upon the attorneys of the parties who have appeared, who may answer or demur to it as if it were an original complaint." While the Supreme Court of Idaho held in the case of Union Trust & Savings Bank v. Idaho Smelting & Refining Co., 24 Idaho, 735, 135 Pac. 822, that the appellant there was not entitled to intervene in the foreclosure suit there involved, having failed to allege the insolvency of the corporation which executed the mortgage, or to show that the party claiming the right to intervene had prosecuted its claim to judgment, or had made any effort to collect the same from the debtor, or that an attempt to do so would have been useless, yet held that if the appellant had "first shown the existence of its claim, and that it had exhausted all of its legal remedies, or that those remedies were useless, and it would be vain to pursue them, and that the only way it could secure and collect its claim would be out of the property covered by this mortgage, then it would have been in a position to contest the validity of the mortgage and to raise the question as to whether or not" the bonds there involved had been issued and the mortgage had been executed in violation of the provisions of the Constitution of the state, citing section 4111 of the state statute, and declaring that: "Any third party may intervene in an action in this state who has 'an interest in the matter in litigation, in the success of either of the parties, or an interest against both.'" In the present case the interventions allowed by the court below met the requirements of the case just cited. The previous case in the same court of Neustadter Bros. v. Doust, 13 Idaho, 617, 92 Pac. 978, is wholly unlike the present one. There the action was against a sheriff to restrain and enjoin him from selling certain personal property described in the complaint under a chattel mortgage which had been previously executed by the copartnership of Lang & Wunderlich in favor of the Exchange National Bank of Coeur D'Alene City; and the question was as to the sufficiency of the complaint. It alleged, among other things, that Lang & Wunderlich executed to the bank their certain chattel mortgage, which was made a part of the complaint, and that: "The said chattel mortgage, as to any of the creditors of said Lang & Wunderlich, was void from the beginning, and that as to the said creditors and any and all of them, the said chattel mortgage was and still is null and void and of no force and effect whatsoever or at all." In holding the complaint insufficient, the court said: "The plaintiff makes no attempt to show that Lang & Wunderlich had no other property out of which to pay their indebtedness. It contains no allegation of insolvency, nor does it allege any facts from which insolvency can be reasonably inferred. It does not state that the plaintiff has ever made any demand on Lang & Wunderlich for the payment of the debt due, nor does it show any steps taken toward the collection of the same. They are not made parties defendant in the action against the sheriff, nor has the plaintiff reduced his claim to a judgment. He has commenced no action against Lang & Wunderlich, has never attached this or any property, and in no way connects his right, interest, or claim with the property that he seeks to restrain the sheriff from selling, and no assurance is given when he will prosecute his action or that he will ever obtain a judgment against them. It can make no difference to the plaintiff whether the sheriff sells this property or not, if Lang & Wunderlich pay the plaintiff. If they should have the means with which to pay their indebtedness to the plaintiff, or if they have other property, either merchandise or cash, then there can be no reasonable objection to their paying their other debtor, the Exchange National Bank." We do not understand the case last cited to hold that under the provisions of the Idaho statute that has been cited a chattel mortgage, unaccompanied by the affidavit of good faith and not recorded as required by the state statute, is valid as against all creditors of the mortgagor, except such as have a lien upon the property; nor do we understand the case of Ryan v. Rogers, 14 Idaho, 309, 94 Pac. 427, or Martin v. Holloway, 16 Idaho, 513, 102 Pac. 3, 25 L. R. A. (N. S.) 110, cited by the appellants in support of the contention, to so hold. In the first of these cases what the court held was that where the mortgagor remains in possession of the chattels and with the knowledge and consent of the mortgagee and continues to sell and dispose of the same without applying the proceeds of the sale to the reduction of the mortgage debt, the existence of such facts, whether shown by the mortgage itself or by evidence aliunde, will invalidate the mortgage as against creditors and other interested third parties, and that although such mortgage be defective or invalid as to third parties, if the mortgagee take possession of the property covered by it prior to the acquiring of a claim thereto by attachment, execution, or other lien, the possession of the mortgagee will be protected and his security be held valid to the extent of his claim. In the second of the cases last cited it was held that the mortgagor and mortgagee to a chattel mortgage may make an agreement, valid as between themselves, that the possession of the property mortgaged shall remain in the mortgagor, with power on his part to dispose of it and apply all or any part of the proceeds in payment of the mortgage indebtedness, and that section 3409 of the Revised Codes of Idaho recognizes the right of a mortgagor and mortgagee to such a mortgage to agree that the possession of the mortgaged property may remain in the mortgagor, or be transferred to the mortgagee, in which latter. event such possession by the mortgagee is equivalent to the recording of the mortgage, and gives to the world the same notice that the recording of the mortgage would give. In all that we see nothing inconsistent with the sections of the Idaho Statutes that we have above quoted, or with the decision of that court in the case of Union Trust & Savings Bank v. Idaho Smelting & Refining Co., supra, or with what we have above held. [2] We quite agree with the learned counsel for the appellants that, in the absence of specific state statute or decisions of the state courts conferring special rights and powers, and where he is not appointed for the purpose of impounding it for a specific purpose, the appointment of a receiver of property by a federal court is for the protec tion and preservation of all rights and interests therein existing at the time of such appointment. Authorities to this effect are so numerous that we think it is unnecessary to cite them. [3] The receiver in the present suit, therefore, held all of the personal property of the insolvent corporation, to which the trustee's liens did not apply, for the benefit of the complainant in the receivership suit and for such of the other general creditors of the insolvent debtor as should join therein. So far as appears all such general creditors did so join except the appellant American Waterworks & Electric Company, which company, while having actual notice of all the litigation in question, for some reason or reasons abstained from intervening during the progress of the trial. But after its conclusion and after the entry of the decree in the cause and the creation of a specific fund by stipulation of the respective parties to the suit, which was the agreed value of that portion of the personal property to which the court held the trustee's liens did not apply, and which was therefore subject to the payment of the claims of the general creditors who had intervened in the receivership suit, and after the sale of all the property covered by the deed of trust and supplemental mortgages the appellant American Waterworks & Electric Company presented to the court a petition to intervene, which petition was directed only against the general creditors of the insolvent debtor who had intervened in the foreclosure suit; alleged their respective claims and an allowance thereof in and by the decree of the court; that the amount realized from the personal property held by the court not to be covered by the trustee's liens was $45,000, and, among others, made these further allegations: "That all of said claims and a large number of other claims aggregating upwards of $4,000,000, the exact amount thereof being to your intervener unknown, were filed with the receiver in said cause pursuant to the order of the court and the notice of the receiver requiring the filing of claims against the power company for allowance by the receiver and court, to the end that the same might be entitled to share in the equitable distribution of the assets of such receivership estate pursuant to law and the principles of equity governing the administration and distribution of assets of insolvent debtors by courts of equity in suits brought by one or more creditors in behalf of themselves and all other creditors of the insolvent debtor. * That in addition to said sum of $45.000 this intervener is informed and believes that there is approximately $25,000 in the hands of the receiver of said power company that may also be available for the payment of claims of general creditors, making in the aggregate approximately $70,000 available for the payment of claims aggregating upwards of $4,000,000; that the other property of said power company subject to complainant's deeds of trust and mortgages was sold for $2,000,000 by the special master under the decree of foreclosure, which amount was less, as this intervener is informed and believes and so alleges the fact to be, than is due the said plaintiff under said decree of foreclosure." Notwithstanding the allegation in the complaint of intervention thus sought to be filed by the American Waterworks & Electric Company that there were a large number of other claims against the power company, none of those alleged other claimants at any time intervened or sought to intervene in the foreclosure suit, although the record shows that notice was mailed to each known creditor of the insolvent |