CONVEYANCING 748

Conditional Contracts of Sale.

An. Code, 1924, sec. 55. 1912, sec. 53A. 1916, ch. 355, sec. 53B. 1931, ch. 402.

71. Every note, sale or contract for the sale of goods and chattels,
wherein the title thereto, or a lien thereon, is reserved until the same be
paid in whole or in part, or the transfer of title is made to depend upon
any condition therein expressed and possession is to be delivered to the
vendee, shall, in respect to such reservation and condition, be void as to
third parties without notice until such note, sale or contract be in writing,
signed by the vendee, and be recorded in the Clerk's office of the Superior
Court of Baltimore City, or in the Clerk's office of the Circuit Courts of
the various counties, as the case may be, where the vendee resides, or in
the case of a corporate or partnership vendee, then where such vendee
has its principal place of business in the State of Maryland; and such
recording shall be sufficient to give actual or constructive notice to third
parties when a memorandum of the paper writing signed by the vendee
or vendees, setting forth the date thereof, the amount due thereon, when
and how payable and a brief description of the goods and chattels therein
mentioned shall have been recorded with the Clerk aforesaid, but it shall
not be necessary that said paper writing shall be acknowledged or an
affidavit made to the consideration therein expressed as in the case of
bills of sale.

The term "third parties without notice," as used in this section, includes subsequent
creditors, whether or not lien creditors. Friedman v. Sterling Refrigerator Co., 104F
(2d) 837.

"Third parties without notice" includes not only lien creditors but also general un-
secured creditors who are subsequent and not prior creditors with respect to time of
conditional sale; term "subsequent creditor" construed. In Be Wilhelm, 25 F. Supp. 440.

In a contract for the purchase of coal, under which it was agreed to convey title to
coal stoker at conclusion of contract, held to be "conditional contract of sale" rather
than "leasing contract," so that seller's title was not protected as against creditors,
whose rights attached between time stoker was installed and the time contract was
recorded. Enterprise Fuel Co. v. Jones, 99F (2d) 928.

Reservation of title in a conditional sale, though unrecorded, is valid between parties
and as to antecedent creditors or purchasers, though void as to subsequent creditors.
Where purchaser becomes bankrupt, having both antecedent and subsequent creditors,
trustee takes property free of seller's lien, and its proceeds will be distributed among
all creditors alike. In re Rosen, 23 F. (2nd), (D. Ct. Md.), 687.

Unrecorded conditional sale contract is void as to creditors, but where such contract
is recorded sometime after its execution, it is valid against trustee in bankruptcy,
unless there are creditors between date of its execution and date of record. In re Shipley,

24 F. (2nd), (D. Ct. Md.), 991.

Unrecorded conditional sales, though valid as between the parties, are void as to
third parties without notice. Cases reviewed. Burden of proof—see notes to art. 9,
sec. 47. Motor Car Co. v. First Natl. Bank, 154 Md. 80.

Unrecorded conditional sale contract void as against party subsequently taking
chattel in settlement of antecedent debt. Stieff v. Wilson, 151 Md. 600.

Where contract for sale of truck was recorded, subsequent purchaser from vendee
is charged with notice of rights of vendor, even though vendee was automobile dealer.
Finance Co. v. Defiance Motor Co., 145 Md. 100.

Contract for consignment of shoes to bankrupt held within this section. Trustee
in bankruptcy entitled to assert invalidity of contract. Reliance Shoe Co. v. Manly,

25 F. (2nd), (C. C. A. 4th), 381.

Lien for repairs and storage of automobile subordinate to conditional sale contract
recorded under this section since passage of act of 1924, ch. 417 (art. 63, secs. 41-45).
Goldenberg v. Finance Co., 150 Md. 302.

Unrecorded conditional contract of sale is not void as against purchaser's creditors
whose debts arose out of transactions prior to date of the contract; immaterial that
debts were reduced to judgment after date of contract of sale. Gunby v. Motor Truck
Corp., 156 Md. 19.

Recorded conditional sales contract is sufficient notice as long as goods and chattels
described remain as such, but not when they have, with assent of sales vendor, become
integrated with real property; gas radiators in garage did not become part of realty.
Abramson v. Penn, 156 Md. 186.

Metal garage so attached to land as to make it a fixture is subject to prior mortgage
on land notwithstanding recording of memorandum on paper by contractor reserving
title to garage. Credit Co. v. Bldg. & Loan Assn., 160 Md. 232.