Flynn v. Engineers Radio Co.

Epitomized Opinion

Action by a surety on certain notes to compel the principal to save him harmless. The petition prayed the court to administer as a trust fund the property of defendant for the benefit of plaintiff and all other creditors. A decree was entered appointing a receiver to administer the assets of defendant. The receiver reported that the business could not be operated at á profit and on his application an order of sale was decreed.

Plaintiff and two other creditors now file an intervening petition for an order directing the receiver to deliver to them certain personal property on which they hold a chattel mortgage, becaues they are entitled to such possession by the terms of their mortgage and are authorized to sell the chattels to satisfy their claim. Held:

The receiver holds the property for the benefit of all the creditors. . Whatever equity exists in the mortgaged property constitutes a part of the trust fund, which the receiver is bound to administer. The intervening petitioners are not entitled to possession of the mortgaged property as against the receiver for the purpose of exercising the remedy provided in their mortgage. The general ceditors are entitled to the processes of the court for the protection of their interests. Intervening petition dismissed..