Is a conditional sales agreement or chattel mortgage executed to secure a preexisting debt, at a time when the maker of such instrument is insolvent, valid and enforceable against a receiver for the maker, appointed subsequent to the proper registration of the instrument ?
It has been uniformly held that a receiver for an insolvent takes and holds the property of such insolvent subject to valid and enforceable liens existing at the time of the appointment provided such liens have been properly executed and recorded. Withrell v. Murphy, 154 N. C., 82, 69 S. E., 748; Acceptance Corporation v. Mayberry, 195 N. C., 508, 142 S. E., 767. In order to obviate the application of this principle of law, the plaintiffs assert that the transaction set out in the record constitutes an assignment for the benefit of creditors, and is, therefore, governed by C. S., 1609, et seq. This position is not tenable for the reason that the court has noted the legal distinction between receivership and assignment for benefit of creditors. The line of demarcation between said remedies was recognized in Mfg. Co. v. Turnage, 183 N. C., 137, 110 S. E., 779, where it is written: “Nor is the contention sound, or permissible, that the office and duties of an assignee, under a general assignment for the benefit of creditors, and those of a receiver are even substantially alike.”
*317It is true that there are many decisions of this Court bolding in effect that if an insolvent grantor executes a chattel mortgage on practically all of his property to secure a preexisting debt that ordinarily such transaction will be treated as an assignment, but this record contains no facts indicating that the property covered by the chattel mortgage in controversy constituted practically all of the property of the insolvent.
The cause was tried upon the theory of an assignment for the benefit of creditors and such theory is not maintainable under the law as applied to the facts appearing in the record. The law affords ample remedy to the creditors to attack the conditional sale or chattel mortgage, but the same having been duly executed and recorded before the appointment of a receiver, is valid upon its face.
The intervener insists that the property was originally sold upon condition that a cash payment be made and certain notes executed, and that as such conditions were not complied with, no title passed. This position is likewise untenable, for the reason that the creditor thereafter took the chattel mortgage or conditional sales agreement to secure the entire purchase price.
New trial.