Conditional sales have become very common and are so deceptive both to purchasers from the buyer and to the buyer's creditors, since the buyer not only has possession of the prop erty but ordinarily is entitled to use It and does use it as if it were his own, that re cording acts have been passed in many states. The purpose of these acts is to give notice to the public of the seller's title and to invali date that title unless the bargain is In writ ing and a record of It made. Such 'statutes have been passed in more than one-half of the states. In England the Factors' Act of 1889 has absolutely invalidated all conditional sales where the buyer has possession as against purchasers, whether by absolute sale or by mortgage or pledge, reaching, as to such parties, the same result that has been reach ed in a few jurisdictions without the aid of statute.
There can he no estoppel If a purchaser or creditor has notice. In the case of a purchas er, notice is important when he has entered into a bargain for the purchase of the goods. So far as the creditor is concerned. the time when notice is important might well be held not to be when the levy is made, but when the debt was created, if its creation was subsequent to the conditional sale; Vanmeter v. Estill, 78 Ky. 456.
Risk of loss and gain is upon the buyer, under the Sales Act, and was so held in Chicago Ry. Equipment Co. v. Bank, 136 U. S. 268, 283, 10 Sup. Ct. 999, 34 L. Ed. 349 ; American Soda Fountain Co*. v. Vaughn, 69 N. J. L. 582, 55 Atl. 54; Osborn v. Lumber Co., 91 Wis. 526, 65 N. W. 184: Whitlock v. Lumber Co., 143 N. C. 120, 58 S. E. 909, 12 L. It. A. (N. S.) 1214; Topp v. White, 12 Heisk. (Tenn.) 165 ; contra. Arthur & Co. v. Blackman, 63 Fed. 536; Bishop v. Minder bout, 128 Ala. 162, 29 South. 11, 52 L. R. A. 395, 86 Am. St. Rep. 134; Mountain City Mill Co. v. Butler, 109 Ga. 469, 34 S. E. 565; Sloan v. McCarty, 134 Mass. 245. Doubtless the question of risk may be settled by the parties in any way they please, and some of the ap parently conflicting decisions may be recon ciled on this basis. See a discussion in American Soda Fountain Co. v. Vaughn, 69 N. J. L. 582, 55 Att. 54.
A conditional sale is distinguished from a so-called lease, in that the latter contem plates only the use of the property for a lim ited time, and its ultimate return to the les sor; whereas the former contemplates the ultimate ownership by the buyer together with the use in the meantime. Sellers de sirous of making conditional sales of their goods, but who do not wish openly to make a bargain In that form, have resorted to the device of making contracts in the form of I rleases either with options to the buyer to purchase for a small consideration at the end of the term, provided the so-called rent has been duly paid, or with a stipulation that if the rent throughout the term is paid, the title shall thereupon vest in the lessee. Such
transactions are leases only in name. Stat utes and courts have disregarded the form of the transaction and hold such leases sub ject to the rules governing conditional sales; Ileryford v. Davis, 102. U. S. 235, 26 L. Ed. 160 ; Manson v. Dayton, 153 Fed. 258, 82 C. C. A. 588; Warren v. Liddell, 110 Ala. 232, 20 South. 89; Hine v. Roberts, 48 Conn. 267, 40 Am. Rep. 170 ; Lucas v. Campbell, 88 Ill. 447; Puffer & Sons Mfg. Co. v. Lucas, 112 N. C. 377, 17 S. E. 174, 19 L. R. A. 682.
A conditional sale and a chattel mortgage are in essence the same, but are different in form, and by virtue of this difference they have been given different names. According ly, statutes providing for the recording of chattel mortgages are not generally held to cover conditional sales; White Sewing Ma chine Co. v. Conner, 111 Ky. 827, 64 S. W. 841.
In Pennsylvania on a sale of chattels, if the vendor and vendee agree that the possession shall pass to the vendee, but the property re main in the vendor until the whole purchase money is paid, such agreement, as respects creditors, is fraudulent. This principle was ful ly established in Clow v. Woods, 5 S. & It. (Pa.) 275, 9 Am. Dec. 346, the opinion by Gibson, J., and Martin v. Mathiot, 14 S. & R. (Pa.) 214, 16 Am. Dec. 491, the opinion by Tilghman, C. J.; but if the possession is transferred under an express contract of bailment, the trans action is not fraudulent as to creditors, though there is a superadded executory agreement for the sale of the property to the Bailee, upon the payment of a certain price; Stoddart v. Price, 143 Pa. 537, 22 Atl. 811; Kelley Springfield Road Roller Co. v. Schlim me, 220 Pa. 413, 69 Atl. 867, 123 Ain. St. Rep. 707. The question of importance in Penn sylvania in cases of this kind is whether the transaction Is a conditional sale or a bail ment.
See CONFLICTS OF LAWS.
Delivery to the Buyer and Retention of Pos aession by Seller. By the Sales Act : Where a person having sold goods continues in posses sion of the goods, or of negotiable documents of title to the goods, the delivery or transfer by that person or by an agent acting for him, of the goods or documents of title under any sale, pledge, or other disposition thereof, to any person receiving and paying value for the same in good faith and without notice of the previous sale, shall have the same ef fect as if the person making the delivery or transfer were expressly authorized by the owner of goods to make tile same.