Recording Chattel Mortgages on Fixtures

The scope of this comment is limited to the problem of the chattel mortgagee in assuring notice of his lien to those who subsequently purchase or encumber the realty. The situation of the conditional vendor has been simplified by a 1933 amendment to the conditional sales contract filing statutes which provide that where the chattel is to be attached to a building, in addition to being filed, the contract also must be indexed and recorded with real estate mortgages. However, since there are several factors which may make the use of a chattel mortgage more desirable than a conditional sales contract, it is more than merely academic to discuss the possibility of giving constructive notice where a chattel mortgage is used to secure the transaction. The Washington court has been openly hostile to conditional sales contracts and on occasion has said that these instruments are not favored in law. The conditional sales contract cannot be used in instances where the credit is actually advanced by someone other than the seller. The chattel mortgage allows the mortgagee to realize on his security and, at the same time, retain his right to recover any deficiency—an advantage which is not open to the conditional vendor in a state that requires him to elect to repossess or sue for the unpaid part of the purchase price. Also, as a matter of business policy, some firms may find that the use of a chattel mortgage is more desirable because of the public attitude that conditional sales contracts expose purchasers to unnecessary risks of forfeiture