Receivers may be appointed not only when a cor poration has become insolvent but also when there has been mismanagement on the' part of the officers and directors, or when there is a deadlock in the corpora tion.
During receivership most of the ordinary powers of the corporation are taken over by the receiver. The powers of the receiver are given by the general law of the state, by the order of the court appointing the re c.eiver and by such subsequent orders as may be made from time to time. In fact, the receiver has some times been called the "right arm of the court." His possession of the property is really the possession of the court, and nobody can interfere with the property unless permission is first received from the proper court.
So far at least as Canada is concerned the fore going statement as to receivers is insufficient. In the province of Quebec, the term "receiver" has no legal signification, and the word "sequestrator" should be substituted in trust deeds or in actual pro ceedings otherwise taken for an appointment. In Canada trust deeds usually authorize the trustee or trustees to take possession of the property covered by the charge and to administer it, or to sell it. The trustees of corporate mortgages are now usually in corporated trust companies, and the power of entry, administration and sale can be as well exercised by such a company as by the appointment of a receiver or sequestrator; tho trust deeds often provide for the appointment of a receiver, manager or sequestrator at the instance even of the trustee. Such a receiver
would, upon the event happening, take possession of the property and manage the business in the interest of the bondholders. Such a receiver also is not an official of any court. Unless the trust deed otherwise provides be is the agent of the persons by whom he was appointed—the bondholders, tho for some pur poses he may be the company's agent. Thus the trust deed may recite that a receiver so appointed shall be deemed the company's agent, and that the company alone shall be responsible for his actions. This would protect the bondholders or their trustees from liability as mortgagees in possession. Moreover, the bond holders may appoint a receiver under such a power even after the appointment of an official liquidator in a winding up, and the court will not ordinarily dis place the receiver in favor of the liquidator.