It is a well recognized principle of the common law that as between the vendor and vendee in a transaction involving property, they may by agreement fix the incidents which shall attach. The law is replete, however, with cases where a party in possession using the property creates a more or less deceptive appearance as to the ownership of the property so far as third parties are concerned. As between the vendor and a third party who has been misled, the law has taken into consideration not merely the objective incidents such as use and possession, but in addition the balance of social, particularly business, convenience to vendors and third parties generally. Sometimes the third party is protected; sometimes the vendor. In the case of the conditional sale, the vendor was with few exceptions protected at common law, the rationalizations of estoppel, apparent ownership, and constructive fraud being urged in vain. With the intention of protecting both the vendor and the third party so far as possible, resort was made to recording and filing acts for the purpose of giving knowledge to third parties. These acts qualified the rights of the vendor unless so recorded or filed. While such acts have been adopted in most of the states, there is still some question as to the policy of requiring filing or recording due to the fact that they place a restraint upon merchandising because of the consequent reflection on the credit of the vendee and the additional costs involved, and possibly the further fact that the reliance by third parties is largely fictional rather than real. Accordingly a number of the states still protect the vendor without the necessity of recording or filing.
Leslie J. Ayer,
Conditional Sales—Legislation in the State of Washington—Recent Legislation, Particularly Where Personality is Attached to Buildings on Realty,
13 Wash. L. Rev. & St. B.J.
Available at: https://digitalcommons.law.uw.edu/wlr/vol13/iss1/4