“The Eternal Triangles of the Law”: Toward a Theory of Priorities in Conflicts Involving Remote Parties

Anglo-American priority law is premised on a doctrinal-derivational approach under which “triangle conflicts” are supposed to be resolved on the basis of the legal rights that the intermediate, wrongdoing party could have transferred from the first-in-time competing party to the second-in-time competing party. In Part I, I outline the major propositions of this approach. I argue that in focusing on the intermediate party, the doctrinal-derivational approach fails to address the primary consideration relevant to resolving triangle conflicts, namely the conduct of the two remote claimants involved in the conflict. In Part II, I focus on the two remote parties involved in triangle conflicts. I offer two sets of prescriptions for resolving such conflicts, one founded on the goal of efficiency, the other on the goal of justice. I show, in turn, that the prescriptions these two normative concepts dictate are basically similar. In Part III, I analyze the good faith purchaser for value doctrine that stands at the core of Anglo-American priority law. I explore the extent to which this doctrine can be rationalized in light of the prescriptions suggested in Part II. I argue that, indeed, the doctrine can be rationalized in terms of both efficiency and justice. This, in turn, leads to the further general argument that the considerable success of legal economists in rationalizing vast portions of common law doctrine stems from the convergence that exists between the concept of efficiency and the concept of justice. In Parts IV-VII, I analyze the rules governing four basic triangle conflicts: entrustments, conflicting transactions, seller-transferee conflicts, and theft. I explore the extent to which the rules governing these conflicts implement the prescriptions suggested in Part II.