W. T. Jones and Company, Incorporated, and Noland Company, Inc., and Marvin Moseley v. Foodco Realty, Inc., and United States of America

SOBELOFF, Chief Judge.

When the Small Business Administration has joined a private bank in making a construction loan secured by a recorded deed of trust and the borrower becomes insolvent, is the SBA’s interest in the unpaid balance of the loan subordinate to mechanic’s liens accorded priority over deeds of trust by state law? Under the circumstances of this case we think that the mechanic’s liens are not entitled to priority over the Government’s claim.

The facts are undisputed. Since these are set forth in meticulous detail in the District Court’s opinion, 206 F.Supp. 878, only those which…