Paul Lynch and June I. Lynch v. Alfred O‪.‬

This appeal concerns questions of priority between mechanics lienors and beneficiaries under a deed of trust. Appellants Paul and June Lynch, together with Joseph and Margaret Reilly, were partners in the ownership and operation of an Anchorage bar named "Pal Joey." The Reillys desired to add restaurant facilities to the Pal Joey bar, but the Lynches did not, so the Reillys agreed to buy out the Lynches. The Reillys then borrowed $60,000 from the First National Bank of Anchorage, upon the security of a deed of trust covering all real property and "tenements, hereditaments and appurtenances thereunto belonging," and paid part of the $60,000 to the Lynches. They then executed a second deed of trust on the same property running to the Lynches to secure payment of the remaining balance of $80,000 due the Lynches for their partnership interests. This second deed of trust was by its terms subordinated to the deed of trust the Reillys executed in favor of the First National Bank of Anchorage.