described in section 6, is valid as against certain purchasers and creditors. It is only invalid as against "purchasers from the buyer for value in the ordinary course of business".

SECTION 7. (Filing.) The filing officer shall mark upon the contract or copy filed with him the day and hour of filing and shall file the contract or copy in his office for public inspection. He shall keep a book in which he shall enter the names of the seller and buyer, the date of the contract, the day and hour of filing, a brief description of the goods, the price named in the contract and the date of cancellation thereof; except that in entering the contracts mentioned in Section 5 the Secretary of State shall record either the sum remaining to be paid upon the contract or the price of the goods. Such book shall be indexed under the names of the seller and of the buyer. For filing and entering such contract or copy the filing officer shall be entitled to a fee of (ten cents), except that for filing and entering a contract described in Section 5 the Secretary of State shall be entitled to a fee of (one dollar).

In only nine of the American states do the filing statutes appear to provide expressly concerning the method of filing and entering the conditional sale contract. Doubtless in many states the method of filing and entering is governed by custom; in others general filing statutes are held to control conditional sales as well as other contracts. It seems desirable to be explicit regarding the details of filing and entering. Filing consists of marking the paper and retaining it in a proper place in the office. Entering consists of noting the existence of the contract and certain facts concerning it in a proper book. The contract is not to be recorded in the sense of being copied in full into a book. Notes are to be made of its existence in the index book and the paper is to be subject to inspection in the files.

Section 8. (Refiling.) The filing of conditional sale contracts provided for in Sections 2, 3 and 4 shall be valid for a period of three years only. The filing of the contract provided for by Section 5 shall be valid for a period of fifteen years only. The validity of the filing may in each case be extended for successive additional periods of one year from the date of refiling by filing in the proper filing district a copy of the original contract within thirty days preceding the expiration of each period, with a statement attached signed by the seller, showing that the contract is in force and the amount remaining to be paid thereon. Such copy, with statement attached, shall be filed and entered in the same manner as a contract or copy filed and

entered for the first time, and the filing officer shall be entitled to a like fee as upon the original filing.

In but five of the states do there appear to be express provisions for the refiling of the conditional sale contract after a lapse of a certain length of time. Provision for such refiling, however, seems desirable. The life of these contracts is ordinarily brief. They are performed or rescinded usually within a few months or within three years at the most. Searchers who are examining the records concerning personal property should not be obliged to look back over a long period of years. They should be warranted in assuming that the apparent owner of personal property is the actual owner thereof, if his title appears clear for a period of three years. Conditional sellers who desire to reserve their rights for longer than three years cannot object to the slight additional burden of refiling their contracts.

SECTION 9. (Cancellation of Contract.) After the performance of the condition, upon written demand delivered personally or by registered mail by the buyer or any other person having an interest in the goods, the seller shall execute and deliver to the demandant a statement that the condition in the contract is performed and that the buyer has become the owner of the goods. If for ten days after such demand the seller fails to mail or deliver such a statement of satisfaction, he shall forfeit to the buyer five dollars ($5.00) and be liable for all damages suffered. Upon presentation of such statement of satisfaction the filing officer shall file the same and note the cancellation of the contract and the date thereof on the margin of the page where the contract has been entered. For filing and entering the statement of satisfaction the filing officer shall be entitled to a fee of (ten cents), except that the Secretary of State shall be entitled to a fee of (fifty cents) for filing and entering a statement of the satisfaction of a contract described in Section 5.

This section in connection with Sections 7 and 8 completes the statement of the duties of the filing officer regarding conditional sale contracts. It contains a number of rules which are obviously fair and just and might by some be considered to be too obvious for statement in the act. However, it is the belief of the draftsman that nothing should be left to implication. Every step in the transactions concerning conditional sales should be covered by express provision.

When the buyer has performed his contract obviously it is equitable that he should be entitled to a statement to the effect that such performance has occurred and that the buyer has now become the

owner of the goods. This statement clears the buyer's title and leaves him free to dispose of the goods. He should be entitled to demand a statement of this sort from the seller and be entitled to file it. If the seller maliciously or carelessly refuses to render such a statement and thereby deprives the buyer of his power to dispose of the goods or to use them freely, the seller should be penalized.

SECTION IO. (Prohibition of Removal or Sale Without Notice.) Unless the contract otherwise provides, the buyer under a conditional sale contract may, without the consent of the seller, remove the goods from any filing district and sell, mortgage or otherwise dispose of his interest in the goods; but prior to the performance of the condition, no such buyer shall remove the goods from a filing district in which the contract or a copy thereof is filed, except for temporary uses for a period of not more than thirty days, unless the buyer not less than five days before such removal shall give the seller personally or by registered mail written notice of the place to which the goods are to be removed and the approximate time of such intended removal; nor shall the buyer, prior to the performance of the condition, sell, mortgage or otherwise dispose of his interest in the goods, unless the buyer or the person to whom he is about to sell, mortgage or otherwise dispose of his interest in the goods, shall notify the seller in writing personally or by registered mail of the name and address of the person to whom his interest in the goods is about to be sold, mortgaged or otherwise transferred, not less than five days before such sale, mortgage or other disposal. If any buyer does so remove the goods, or does so sell, mortgage or otherwise dispose of his interest in the goods without such notice, the seller may retake possession of the goods and deal with them as in case of default in payment of part or all of the purchase price. The provisions of this section regarding the removal of goods shall not apply, however, to the goods described in Section 5.

Dishonest persons holding goods under conditional sale contracts frequently endeavor to defraud the sellers thereof by removing the goods from the district where they were originally delivered or by transferring their interest to third persons. The object of section 10 is to require notice of such removal or sale in order that the seller may protect himself against fraud.

The right to remove the goods and the right to dispose of his interest therein is one which should be, of course, accorded to the buyer. The seller is not allowed to prohibit such removal or sale unless the buyer acquiesces in such prohibition in the contract, but it

does not seem unreasonable to require of the buyer, as a condition of exercising the right of removal or sale, that he give the seller five days notice thereof. Such notice will enable the seller to trace the goods and to take such steps as are necessary to protect his rights.

In order that the section may have some force and may be acquiesced in by buyers, it is necessary to place a penalty upon the buyer if he does not give the notice specified. The penalty of being considered in default and of making the goods subject to retaking by the seller does not seem too drastic when the dangers to the seller are considered. For example, if a buyer of a piano under a conditional sale contract in Chicago contemplates moving to Texas and taking the piano with him, it is obviously of great importance to the seller to know of its removal. The seller will desire to learn of the buyer's new residence in order that he may collect future part payments. If the buyer is then in default, the seller may then wish to exercise the right of retaking, whereas he would not exercise such a right if the goods were to remain in Chicago.

SECTION II. (Refiling on Removal.) When, prior to the performance of the condition, the goods are removed by the buyer from a filing district in this state to another filing district in this state in which such contract or a copy thereof is not filed, or are removed from another state into a filing district in this state where such contract or copy is not filed, the reservation of the property in the seller shall be void as to the purchasers, mortgagees, pledgees and creditors described in Section 2, unless the conditional sale contract, or a copy thereof, shall be filed in the filing district to which the goods are removed, within thirty days after the seller has knowledge of the filing district to which the goods have been removed. The provisions of this section shall not apply, however, to the goods described in Section 5. The provisions of Section 8 regarding the duration of the validity of the filing and the necessity for refiling shall apply to contracts or copies which are filed in a filing district other than that where the goods were originally delivered for use.

As previously stated the filing provision is of but little importance unless the record exists in the county where the goods are located. Previous provisions of the act require filing in the county where the goods are originally delivered for use and keeping, but the statute allows removal of the goods to a new filing district, and actual experience shows that such removal very frequently occurs. Therefore, if the innocent public in the new filing district is to be protected, a second filing must occur in such new district. Persons taking chat

tel mortgages on the goods or purchasing the goods in the new district cannot be expected to ascertain the district where the goods were originally delivered and have a search made there. Such chattel mortgagees and creditors ought to be protected if they make a search in the filing district where the goods are located at the time they deal with them.

This situation does not seem to be covered by the statutes of many states, but there is precedent for it in the statutes of five states, and it seems a desirable provision to insert in the uniform statute. A large amount of litigation has arisen concerning goods sold under conditional sale contracts and removed from one state to another, great difficulty has been experienced by the courts in establishing rules to cover such cases, and the controlling principles are not even now clearly defined. It is submitted that the general adoption of a uniform act containing Section II would obviate this litigation and clarify the situation. If all sellers were required to refile when the goods were removed, as a condition of retaining their rights, the public in the new filing district would be protected by filing or else the seller would have no standing as against innocent dealers in the new filing district.

SECTION 12. (Fraudulent Injury, Concealment, Removal or Sale.) Wherever prior to the performance of the condition the buyer maliciously or with intent to defraud shall injure, destroy or conceal the goods, or remove them to a filing district where the contract or a copy thereof is not filed, without having given the notice required by Section 10, or shall sell, mortgage, or otherwise dispose of such goods under claim of full ownership, he shall be guilty of a crime and upon conviction thereof shall be imprisoned in the county jail for not more than one year or be fined not more than ($500) or both.

This section is in accord with existing law in the great majority of American states. Statutes very commonly make it a crime on the part of conditional buyers or chattel mortgagees to injure, destroy, conceal or remove the goods with a fraudulent intent.

In section 10 a civil penalty was placed upon the buyer for the removal or sale of the goods without notice. The removal there provided for might be either innocent or fraudulent. The penalty provided was that the seller might treat the buyer as in default and retake the goods. The penalty provided in section 12, on the other hand, is a criminal penalty and is imposed only where there is malice or fraud. Some cases have arisen of malicious destruction of the goods by buyers for the purpose of preventing the sellers from retak