here - Equine Law Blog : Texas Horse Lawyer & Attorney : Alison

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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
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 “SelfHelp” 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
When Enforceable
Enforcement
• “Licensed”
keeper of stallion
has lien on
offspring (NOT
mare) for unpaid
service fees
• Up to 1 year after
foaling date
• 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
• 20th day after
date vet first
provided care
• Lien
enforceable
even if vet
does not
retain
possession of
horse
Priority
Enforcement
• Takes priority
over all other
liens if vet
retains
possession
• Otherwise,
UCC Rules
dictate
priority
• 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
and Florida
It is clear that…
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]
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