MORTGAGES, DEBENTURES AND RECEIVERS 204

is concerned. As a rule, a receiver has express power given
him to take possession of all or any of the property subject
to the charge, to carry on the company’s business, to sell,
and to compromise. But he cannot carry on the business
unless he is expressly empowered to do so.

He will accordingly enter into possession, and, if so author-
ised, carry on the business, collect the assets, and, if necessary
sell all or any of them. Out of the proceeds he will pay the
expenses of the business, interest on prior charges, preferential
debts and his own remuneration, after which he will pay to the
debenture holders the interest due to them. If, in order to
pay off the principal due on the debentures, he sells, any
surplus must be paid to the company, as also any surplus
income if there is no sale.

If the company is in liquidation, the Court may, on the
application of the liquidator, fix the remuneration of the
receiver or manager [s. 309].

A motion to the Court to appoint a receiver and manager is
ordinarily the next step after the issue of a writ in a deben-
ture holder's action, and a receiver and, if there is a going
business, a manager will be appointed, if either principal
or interest is in arrear, or if the security is in jeopardy, e.g.
by a threatened winding up, or by execution having been
issued on a judgment against the company; or if the assets
are in danger owing to disputes between the directors [Stanfield
v. Gibbon (1925), W.N. 11].

When the Court appoints a receiver it assumes the pro-
rection of the property which constitutes the security of the
debenture holders, and holds it for their benefit. A receiver
appointed by the Court, and a manager appointed by the
Court, are officers of the Court, and any interference with
their possession or acts 1s contempt of Court. They are
neither agents of the company, nor of the debenture holders.
They are under the directions of the Court; and since the
Court cannot be liable as their principals, it follows that they
are primd facie personally liable, although they have a right
of indemnity against the assets [Burt v. Bull (1895), ~ C 3.
276; Strapp v. Bull (1895), 2 Ch. 1].

A receiver appointed by the Court must give security tc
account for what he receives. He is entitled to a proper
salary or allowance for the performance of his duties.

His appointment must be notified to the Registrar by
the person at whose instance it was obtained within seven
days from the date of the order appointing him [s. 86 (1)].
The usual order directs an enquiry as to the preferential pay-
ments to be made under s. 78 of the Act and provides for the

Appointed by
the Court.