46 Kan. 83 | Kan. | 1891
Opinion by
The material facts are: On the 1st day of December, 1888, the plaintiff in error was in the possession of a stock of drugs and drug-store fixtures, situate in a building on lot 10, in block 36, in Garden City, known as the “George H. De Waters drug store.” The plaintiff in
On the hearing of the motion to vacate the order granting Conwell permission to sue the receiver in replevin, Conwell offered to show by DeWaters that he had a valid bona fide chattel mortgage upon the property that was a first lien thereon, but this was refused. It appears from the record that the defendant in error alleges that Conwell held possession of the stock of goods under and by virtue of a bill of sale that was claimed to be fraudulent.
The power of the court to appoint’ a receiver must be exercised with great caution, and with a due regard to the rights and interests of ail parties interested in the property. ■ It is not to be allowed when other adequate remedy exists. (High, Receivers, 369.) It is only in extreme cases that a' court will appoint a receiver for chattel property in possession of a mortgagee having the first lien, and the obvious reason for this is, that the statutes of the state authorize the mortgagee to take possession on condition broken, and this gives him the absolute legal right to possession; and, to authorize a receiver to take the possession of the mortgaged chattels away from one having apparently the first lien, there must be a very strong showing of fraud. This is familiar doctrine, to be found both in Beach and High on Receivers.
It is said by Jones on Chattel Mortgages, §439:
“The appointment of a receiver of mortgaged chattels held by a mortgagee in possession will only be made in cases of pressing necessity, in order to secure the rights of the mortgagor, or others claiming under him.”
A mortgagee in possession will not be dispossessed by the
These citations are sufficient to show how strongly the courts regard the right of possession of a first mortgagee of chattels. Applying this principle to the facts in this case so far as they are developed by the record, we doubt whether the showing was sufficient to authorize the appointment of a receiver. The appointment was made on an ex parte application, in an action on chattel mortgages executed by the debtor to the plaintiffs at a time when the mortgaged property was in the actual possession of Conwell, the action being commenced within a few hours after the execution of the chattel mortgages. Conwell ought to have had notice of the application ; he resided and the goods were situate in the same town in which the order was made. Under these circumstances, we regard the order made to allow Conwell to sue the receiver in replevin and determine his statutory right to the possession
We recommend that the order of the district court revoking permission to sue the receiver and dismissing the action be reversed, and the cause remanded for trial.
By the Court: It is so ordered.