“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

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

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

• • • 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

Possession Necessary?

• Yes Enforcement • Self-Help Sale • Not required to file lien Scope • Charges for “care” only

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”

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

• •

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.

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

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

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

Statutory Lien

available to vets to secure unpaid

veterinary services

State with Veterinarian’s Lien

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

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

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

Are holders of statutory liens secured creditors under the UCC?

YES, IF…

• • • The debtor was engaged in the horse business Statutory lien does not require possession Services provided in creditors “ordinary course of business”

The 2001 “Agricultural Lien” Amendment to

the UCC gives rise to the argument that: Holders of statutory stableman’s, breeder’s and veterinarian’s liens hold UCC agricultural liens and thus are: Permitted to foreclose said liens according to UCC self-help provisions

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

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

Operation”

UCC adopted in Kentucky includes a special “Equine Interests” provision in its definition of

“Farm Products”

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

Texas Stableman’s Lien

Cannot be an agricultural lien

under the UCC because the

statute requires possession

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 .

Contractual Liens Judgment Liens Auctioneer’s Liens

• • 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

• • 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

• • 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.

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.

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.

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.

Alison Rowe Equine Legal Services

1716 Briarcrest Drive, Suite 300 Bryan, Texas 77802 Phone: (979) 691-7333 Email: [email protected]