Repossession Case in Georgia – Alstep, Inc. v. State Bank & Trust Co.

This case involved an appeal over the finding of a trail court that a receiver should be appointed under the Georgia Code OCGA 9-8-1 which states that “when any fund or property is in litigation and the rights of either or both parties cannot otherwise be fully protected, a receiver of the same may be appointed …” This statement has often been interpreted as granting a wide decision making power to the court on whether or not to make the relevant appointment. The case boiled down to the fact that the party that lodged the appeal did not give any record of the evidence that was heard in the trial case and the appeal court was therefore unable to sustain the appeal.

The basic facts of the case involved a small business in Georgia where there was a gas station, a convenience shop and an alcohol shop. The plaintiff purchased the property on which the businesses stood and took out a loan with the defendant. The normal security documents were used by the finance company in the transaction. The security documents attached the personal assets of the the owners of the businesses that stood on the property. There was a default on the loan repayments, the property was put up for auction and the highest bid was accepted. Possession was demanded but there was a refusal from the appellants to vacate the property.

A receivership motion was filed on the basis that the rent from the shop was being converted by the persons occupying the property. Neither the appellants or their lawyers attended the hearing of the matter. Despite this, the court held an evidential hearing. The basis of the appeal was that the trial court erred by allowing the appointment of a receiver because such a remedy is an extraordinary one which should only be exercised in exceptional circumstances. In the final analysis, the appeal court affirmed the decision of the trial court and rejected all of the bases of the appeal submitted by the appellants.

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