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“Possession is 9/10 of the law” A right to take hold or sell property of a debtor to secure the payment of a debt.

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Presentation on theme: "“Possession is 9/10 of the law” A right to take hold or sell property of a debtor to secure the payment of a debt."— Presentation transcript:

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2 “Possession is 9/10 of the law”

3 A right to take hold or sell property of a debtor to secure the payment of a debt

4 1)Statute 2)Contract 3)Vested by the Constitution of certain states

5 Stableman’s/ Agister’s Liens Breeder’s Liens Veterinarian’s Liens

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7 Attaches to horses when one party leaves her horse(s) in the care of another for boarding or grazing. Lien holder may hold horses and sell horses to collect amount owed. Only applies to horse, not applicable to other personal property belonging to debtor

8 Possession Necessary? Yes Enforcement Self-Help Sale Not required to file lien Scope Charges for “care” only

9 Possession Necessary? No within 1 year Yes if using “Self- Help” public sale option Enforcement Affidavit/Warrant Self-Help Sale Lawsuit Scope “Reasonable charges for keeping, caring for and grazing animal”

10 Possession Necessary? No Yes if using “Self-Help” public sale option Enforcement Self-Help Sale Lawsuit Injunction & Attachment Scope Charges for “feeding or taking care” of horse

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12 Statutory Lien available to owners or managers of stallions to secure unpaid stud fees. Alternative- Most breeders hold the breeder’s certificate necessary to register foal until all stallion service fees are paid.

13 Scope Stallion owner has lien on resulting foal (NOT mare) for unpaid breeding fees When Enforceable 5 to 10 months after foaling date Enforcement “Self-Help” according to Statutory Landlord’s Lien rules Filing recommended

14 Scope “Licensed” keeper of stallion has lien on offspring (NOT mare) for unpaid service fees When Enforceable Up to 1 year after foaling date Enforcement Filing lawsuit Affidavit/Warrant Priority Subordinate to agister’s lien regardless of filing order

15 Scope Stallion owners have lien on the foal and the mare for unpaid stallion service Perfection Stallion owner must perfect lien within 18 months after the service in mare’s county When Enforceable Any time after mare conceives Enforcement Same manner as Florida Stableman’s lien

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17 Statutory Lien available to vets to secure unpaid veterinary services

18 State with Veterinarian’s Lien

19 Scope Vet services provided to “large animals” (including horses) When Enforceable 20 th day after date vet first provided care Lien enforceable even if vet does not retain possession of horse Priority Takes priority over all other liens if vet retains possession Otherwise, UCC Rules dictate priority Enforcement Maintains possession: same as stableman’s lien No possession: same as residential landlord’s lien

20 Scope Vet has lien if horse’s owner contracted vet for services or gave written consent for services When Enforceable Statement of amount due must be filed with clerk within 6 months of service Action to enforce lien must be brought within 12 months after filing with clerk Enforcement Vet files petition with clerk who serves Defendant Clerk refers case to master commissioner Priority Priority based on order of filing

21 Scope Vet has lien if provided services at the request of owner, owner’s agent, or a bailee, lessee, or custodian Does not require vet to be “licensed” When Enforceable Period of 1 year after vet services rendered Enforcement Same manner as Florida Stableman’s lien

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23 Are holders of statutory liens secured creditors under the UCC? The debtor was engaged in the horse business Statutory lien does not require possession Services provided in creditors “ordinary course of business” YES, IF…

24 The 2001 “Agricultural Lien” Amendment to the UCC gives rise to the argument that: Permitted to foreclose said liens according to UCC self-help provisions Holders of statutory stableman’s, breeder’s and veterinarian’s liens hold UCC agricultural liens and thus are:

25 1)Allow for private sale of horses 2) Are a known-entity to most judges

26 Under UCC adopted in Texas and Florida It is clear that… For UCC agricultural lien to apply, debtor must be engaged in “Farming Operation”

27 UCC adopted in Kentucky includes a special “Equine Interests” provision in its definition of 1) Livestock, born and unborn 2) Equine interests (interests in horses, mares, yearlings, foals, weanlings, stallions), whether or not debtor is engaged in farming operations “Farm Products”

28 Texas Stableman’s Lien Cannot be an agricultural lien under the UCC because the statute requires possession

29 UCC self-help remedies are best not enforced against hobbyists who are not clearly in the horse business of raising, breeding, boarding, or grazing horses, absent a written agreement that the UCC enforcement provisions will apply.

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31 Contractual Liens Judgment Liens Auctioneer’s Liens

32 Most commonly associated with a bank’s security interest in the horses Bank obtains promissory note and security agreement with debtor and files a UCC-1 financing statement

33 Another context is in the written contract of a boarding stable, a veterinarian, or a breeder Can contract with horse owners to create a lien by agreement on terms different than those provided by statutes

34 Judgment creditors may attempt to execute on horses as assets of a debtor State personal property exemption statutes determine whether a horse is exempt from execution.

35 Texas and Florida are notorious for being “debtors’ havens” Texas law provides that a debtor may potentially hold as exempt up to $60,000 worth of horses.

36 Florida, Texas and Kentucky do not provide auctioneers a statutory lien on horses put through public auction HOWEVER… Most auction companies provide a security agreement in their conditions of sale covering each horse put through sale.

37 A lien holder may request a “transfer hold” with the breed registry with whom the horse is registered to strengthen their lien. Very effective- many potential buyers do not do a lien search, but will not finalize sale if cannot transfer the registration with the breed registry.

38 Alison Rowe Equine Legal Services 1716 Briarcrest Drive, Suite 300 Bryan, Texas Phone: (979)

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