OPINION
RABINOWITZ, Justice.
This appeal presents the question whether the superior court erred in fixing the deficiency due a preferred ship mortgagee. We reverse.
I. FACTUAL AND PROCEDURAL BACKGROUND.
In 1982, Ken Kirkman, Jane Kirkman and Richard R. Rhyner formed a partnership known as K & R Fish. The partnership borrowed $210,300 from the Puget Sound Production Credit Association
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