Washington Irving begins his story "The Devil and Tom Walker" with the legend behind the woods. The myth begins with a local legend about Kidd the Pirate who once buried his treasure under a larger tree. It is told that the devil himself "presided at the hiding of the money, and took it under his guardianship." Though no one saw this encounter, it's been passed down from generation to generation until it's been accepted as fact. Kidd the Pirate was hung, and so no one knows the true location of the treasure or tried to fight the devil for the right to it.
This legend gives an air of believability and credence to the story. By citing public lore, the author brings in his audience to the story and leads them to believe the rest of the story that is to follow.