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Secured Transactions History: The Northern Struggle To Defeat The Judgment Lien In The Pre-Chattel Mortgage Act Era, George Lee Flint Jr

Faculty Articles

Nonpossessory secured transactions evolved as a competitor to collusive judgments as a means to protect creditors from the loss of their investments in colonial America. A collusive judgment involved the debtor recognizing his debt before the court, while the creditor held equitable title to the debtor’s personalty as collateral while the debtor retained possession. The 1677 Statute of Frauds destroyed the priority of the collusive judgment presenting opportunities for other parties to seek the debtor’s collateral. The chattel mortgage, predecessor of the secured transaction, developed from the standard shipping practices during colonial times. The shipping industries extended lines of credit …