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Liens

Author johnbsims3
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#1 - Posted: 13 Dec 2006 17:14 
34 Fla. Jur 2d Liens § 1
Florida Jurisprudence, Second Edition


Liens

I. Classification of Liens
A. Generally

Topic Summary Correlation Table References

§ 1. In general

A lien is a charge on property for the payment or discharge of a debt or duty[FN1] which may be created only by contract of the parties or by operation of law.[FN2] A lien does not constitute a right of property in the thing itself, but a right to levy on and sell it for satisfaction of the debt.[FN3] It is therefore a qualified right or proprietary interest which may be exercised over the property of another.[FN4]


[FN1] Case v. Texas Co., 115 Fla. 668, 156 So. 137 (1934).
[FN2] Wills v. Andrews, 71 Fla. 647, 72 So. 174 (1916), holding that where two persons enter into an agreement whereby one is to furnish land and money for the construction of a building and the other is to furnish plans and specifications and supervise the erection of the building, and profits from the sale of the property are to be equally divided, no lien arises in favor of the latter party.
[FN3] Love v. Williams, 4 Fla. 126, 1851 WL 1098 (1851).
[FN4] City of Sanford v. McClelland, 121 Fla. 253, 163 So. 513 (1935).

§ 2. In general

A common-law lien, which arises by implication of law and not by express contract, is the right of a person to retain in his possession something belonging to another until certain demands against that other person are satisfied. The common law recognizes liens in favor of persons who are bound by law to serve the public in their trade and occupation, such as innkeepers, ferriers, common carriers, and warehousemen. Common-law liens are also extended to various other persons who impart, by their labor and skill, an additional value to goods, such as artisans, tradesmen, mechanics, and laborers who receive property for the purpose of mending, repairing, and improving its condition for hire.[FN5]


[FN5] 51 Am. Jur. 2d, Liens § 20.

There is no common-law lien on an automobile for towage and storage charges; and, where no statute creates such a lien and the owner had not agreed, either expressly or impliedly, to pay the charges, the owner has a cause of action against the towing service for conversion. Murrell v. Trio Towing Service, Inc., 294 So. 2d 331 (Fla. Dist. Ct. App. 3d Dist. 1974), appeal after remand, 325 So. 2d 21 (Fla. Dist. Ct. App. 3d Dist. 1975).

As to the effect of statutes on common-law liens, see §§ 12 et seq.

§ 3. Possession

The right to a common-law lien is dependent on possession.[FN6] It is therefore indispensable that the party claiming the lien have an independent and exclusive possession of the property.[FN7]


[FN6] § 2.
[FN7] Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 43 A.L.R. 1409 (1925).

Forms
Complaint, petition, or declaration—To foreclose, and establish priority of, lien on property in possession of subsequent lienor. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 31.
Complaint, petition, or declaration—To foreclose lien—Lien claimants' possession of property as satisfying prerequisite to establishment of common-law lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 49.

§ 4. In general

An equitable lien is a right, not recognized at law, to have a fund or specific property, or its proceeds, applied in whole or in part to the payment of a particular debt or class of debts.[FN8] It is a remedial tool used to prevent an inequity of one party as against another, and may be used as a means of enforcing, against a piece of property, a party's obligation that has resulted in a benefit to that property.[FN9] Imposition of an equitable lien on specific property is particularly appropriate where the creditor has lost security in that property in reliance on false representations of one who later claims a superior interest in the property.[FN10]

Distinction:
An equitable lien is not an estate or property in the thing itself or a right to recover the thing; that is, a right that may be the basis of a possessory action. It is simply a right of a special nature over the thing, which constitutes a charge or encumbrance on the thing, so that the very thing itself may be proceeded against in an equitable action, and either sold or sequestered under a judicial decree, and its proceeds in the one case, or its rents and profits in the other, applied on demand of the creditor in whose favor the lien exists.[FN11]
The doctrine of equitable liens has been liberally extended to give effect to the intention of the parties to create specific charges, and to facilitate mercantile transactions.[FN12] Where facts giving rise to an equitable lien are present, neither the statute of frauds nor the conveyancing statute affect the lien claimant's right to an equitable lien.[FN13] Also, an equitable lien may constitute a voidable preference.[FN14] Equitable liens arise at the time of the transaction from which they spring, and the filing of a lis pendens to enforce an equitable lien or mortgage is notice to the world of a claim. Where there are no subsequent bona fide purchasers for value or valid lienholders without notice, whose rights accrued between the time an equitable lien arose and a lis pendens was filed, no obstacle to the enforcement of an equitable lien or mortgage appears.[FN15]

CUMULATIVE SUPPLEMENT:

Cases:
Under Florida law, equitable lien can be imposed: (1) if there is written contract that indicates an intention to charge particular property with obligation; or (2) if a court declares that equitable lien is necessary out of general considerations of justice. In re Dorado Marine, Inc., 321 B.R. 581 (Bankr. M.D. Fla. 2005).
Under Florida law, equitable liens are imposed when no other adequate remedy at law exists. In re Dorado Marine, Inc., 321 B.R. 581 (Bankr. M.D. Fla. 2005).
Under Florida law, courts should take into consideration the relationships of parties in determining whether an equitable lien is necessary. In re Dorado Marine, Inc., 321 B.R. 581 (Bankr. M.D. Fla. 2005).
Under Florida law, equitable lien is remedial tool that is used to prevent an inequity of one party against another, and that may be used as means of enforcing, against a piece of property, a party's obligation that has resulted in benefit to that property. In re Crum, In re Crum, 294 B.R. 402 (Bankr. M.D. Fla. 2003).
Under Florida law, basis of equitable liens may be estoppel or unjust enrichment. In re Chauncey, 308 B.R. 97 (Bankr. S.D. Fla. 2004).

[END OF SUPPLEMENT]


[FN8] Hullum v. Bre-Lew Corp., 93 So. 2d 727 (Fla. 1957).

Lien foreclosures of real estate are matters in equity. Alexdex Corp. v. Nachon Enterprises, Inc., 641 So. 2d 858, 19 Fla. L. Weekly S417 (Fla. 1994).

Equitable liens are based on the fundamental maxim of equity that no one shall be unjustly enriched at the expense of another. Frank v. Groo, 176 So. 2d 119 (Fla. Dist. Ct. App. 2d Dist. 1965); Phelps v. T. O. Mahaffey, Inc., 156 So. 2d 900 (Fla. Dist. Ct. App. 2d Dist. 1963).
[FN9] Architectonics, Inc. v. Salem-American Ventures, Inc., 350 So. 2d 581 (Fla. Dist. Ct. App. 2d Dist. 1977).
[FN10] Architectonics, Inc. v. Salem-American Ventures, Inc., 350 So. 2d 581 (Fla. Dist. Ct. App. 2d Dist. 1977).
[FN11] Hullum v. Bre-Lew Corp., 93 So. 2d 727 (Fla. 1957); International Realty Associates v. McAdoo, 87 Fla. 1, 99 So. 117 (1924); Phelps v. Higgins, 120 So. 2d 633 (Fla. Dist. Ct. App. 2d Dist. 1960).
[FN12] Hullum v. Bre-Lew Corp., 93 So. 2d 727 (Fla. 1957), further holding that such a lien cannot, however, be based only on moral obligations, but must find a basis in established equitable principles.

Although an equitable lien may grow out of a written contract that evidences an intention to charge some particular property with a debt or obligation, and even though it may be adjudicated by a court of equity upon general considerations of right and justice as applied to the relations of the parties and the circumstances of their dealings, such a lien cannot be rooted on moral obligations alone, but must be based on established principles of equity. Dewing v. Nelson & Co., 117 So. 2d 744 (Fla. Dist. Ct. App. 2d Dist. 1960).
[FN13] Hullum v. Bre-Lew Corp., 93 So. 2d 727 (Fla. 1957); Blumin v. Ellis, 186 So. 2d 286 (Fla. Dist. Ct. App. 2d Dist. 1966).

§ 5. Possession

Possession by the lienor of the thing sought to be charged is not essential to the existence of an equitable lien,[FN16] which differs in this respect from a common-law lien.[FN17]


[FN16] Hullum v. Bre-Lew Corp., 93 So. 2d 727 (Fla. 1957); Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 43 A.L.R. 1409 (1925); Richard Bertram & Co. v. Barrett, 155 So. 2d 409 (Fla. Dist. Ct. App. 1st Dist. 1963).

Where property recovered by an attorney for his client is not in the attorney's possession, a court of equity is the proper forum to enforce an equitable lien on the property in his behalf for his services in recovering it. Scott v. Kirtley, 113 Fla. 637, 152 So. 721, 93 A.L.R. 661 (1933).

§ 6. Creation by express agreement

An equitable lien on particular property may be created by the express agreement of the owner that the property is to stand and be held as security for the payment of a specified debt or other obligation.[FN18] An equitable lien may therefore arise from a written contract which shows an intention to charge some particular property with a debt or obligation.[FN19] One may also be created by a parol agreement.[FN20]

Illustration:
A developer could properly impose a lien upon all subdivision lots for each lot owner's share of a rental obligation respecting the use of a recreational facility, and each such lien had all the elements of an affirmative covenant running with the land so as to be enforceable against buyers of the lots, where: (1) the purchase and sale agreement between the developer and buyers contained an agreement to pay such a rental charge, (2) the declaration of restrictions as recorded by the developer stated that the developer would have a lien on each buyer's lot in the amount of the rental charge and that such lien would be considered as a covenant restriction running with the land, and (3) the buyers subsequently accepted deeds incorporating by reference the declaration of restrictions.[FN21]
Under a deed conveying residential property free of all encumbrances except a designated recorded restriction requiring the payment of a monthly maintenance and recreation-area charge by the grantees, the grantees were liable for such monthly rentals, in favor of the grantor's successor who had also been assigned the lessee's rights under the lease, and the successor was entitled to a lien on the grantees' property for such rentals.[FN22]

CUMULATIVE SUPPLEMENT:

Cases:
Under Florida law, two bases exist for imposition of equitable lien: (1) a written contract which indicates intention to charge particular property with debt or obligation; or (2) declaration by court out of general considerations of right or justice as applied to particular circumstances of case. In re Chauncey, 308 B.R. 97 (Bankr. S.D. Fla. 2004).

[END OF SUPPLEMENT]


[FN18] Ross v. Gerung, 69 So. 2d 650 (Fla. 1954); Gables Racing **** v. Persky, 148 Fla. 627, 6 So. 2d 257 (1940); Wagner v. Roberts, 320 So. 2d 408 (Fla. Dist. Ct. App. 2d Dist. 1975); Crane Co. v. Fine, 221 So. 2d 145 (Fla. 1969), mandate conformed to, 222 So. 2d 36 (Fla. Dist. Ct. App. 3d Dist. 1969); Blumin v. Ellis, 186 So. 2d 286 (Fla. Dist. Ct. App. 2d Dist. 1966).

In an attorney's action to obtain a charging lien for legal services, the trial court properly established the lien on two parcels of real property and ordered execution to satisfy the lien, where the attorney and the client had expressly contracted to subject the property to the charging lien. Sabin v. Butter, 522 So. 2d 939, 13 Fla. L. Weekly 693 (Fla. Dist. Ct. App. 3d Dist. 1988), cause dismissed, 531 So. 2d 168 (Fla. 1988).

A.L.R. Library
Attorney's retaining lien: what items of client's property or funds are not subject to lien, 70 A.L.R. 4th 827.

Forms
Agreement creating lien on personal property in favor of public welfare agency. 12 Am. Jur. Legal Forms 2d, Liens § 165:9.
Agreement creating lien on real and personal property in favor of public welfare agency. 12 Am. Jur. Legal Forms 2d, Liens § 165:10.
Agreement creating factor's lien on personal property in favor of public welfare agency. 12 Am. Jur. Legal Forms 2d, Liens § 165:11.
Professional services contract provision—Right of accountant to lien on client's books. 12 Am. Jur. Legal Forms 2d, Liens § 165.15.
Notice of lien—Employee's contractual or statutory lien for unpaid wages on property of employer in bankruptcy. 12 Am. Jur. Legal Forms 2d, Liens § 165:26.
Notice of lien and of sale—Veterinarian's contractual lien for boarding of animal. 12 Am. Jur. Legal Forms 2d, liens § 165:34.
Contract provision—Lien created by contract not to be construed as waiver of statutory lien. 12 Am. Jur. Legal Forms 2d, Liens § 165:55.
Claim, statement, or notice of lien—Arising by Contract—On merchandise—To secure loans and advances made by lienor to lienee. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 3.
Claim, statement, or notice of lien—Arising by Contract—On real property—To secure loans and advances for materials made by lienor to lienee. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 4.
Petition or application—Leave to amend notice, statement, or claim of lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 5.
Notice—Petition or application—Leave to amend notice, statement, or claim of lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 6.
Order—Granting leave to amend notice of lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 7.
Repair contract provision—Authorization for lien and sale on nonpayment of charges. Florida Jur Forms, Legal and Business (Rev), Personal Property § 15B:9.
[FN19] Crane Co. v. Fine, 221 So. 2d 145 (Fla. 1969), mandate conformed to, 222 So. 2d 36 (Fla. Dist. Ct. App. 3d Dist. 1969); Jones v. Carpenter, 90 Fla. 407, 106 So. 127, 43 A.L.R. 1409 (1925); Wagner v. Roberts, 320 So. 2d 408 (Fla. Dist. Ct. App. 2d Dist. 1975).
[FN20] Craven v. Hartley, 102 Fla. 282, 135 So. 899 (1931).
[FN21] Bessemer v. Gersten, 381 So. 2d 1344 (Fla. 1980).
[FN22] Diamond v. Woodlands Homeowner's ****, Inc., 348 So. 2d 8 (Fla. Dist. Ct. App. 4th Dist. 1977)

§ 13. Construction and application of statute

Statutes providing for liens are generally construed liberally in favor of the lien claimant.[FN50] A lien created by statute is, however, limited in operation and extent by the terms of the statute, and can arise and be enforced only in the event and under the facts provided for in the statute.[FN51] A lien claimant must demonstrate substantial compliance with the statutory requirements.[FN52]


[FN50] Anderson v. Sokolik, 88 So. 2d 511 (Fla. 1956).
[FN51] People's Bank of Jacksonville v. Arbuckle, 82 Fla. 479, 90 So. 458 (1921).

Although a materialman's or laborer's lien depends on the existence of an express or implied contract, the right to the lien is not created by contract between the parties, but by operation of the statute on the relationship into which the parties have brought themselves. Harper Lumber & Mfg. Co. v. Teate, 98 Fla. 1055, 125 So. 21 (1929).
[FN52] Langford v. South Florida Lumber & Supply Co., 63 Fla. 484, 59 So. 12 (1912); De Soto Nat. Bank v. Arcadia Electric Light, Ice & Telephone Co., 59 Fla. 479, 52 So. 612 (1910)

§ 14. For labor or services rendered

A person performing labor or services for any other person is entitled to a lien on the personal property of the latter on which the labor or services are performed, or which is used in the business, occupation, or employment in which the labor or services are performed.[FN53] A person performing managerial duties,[FN54] a clerk, bookkeeper,[FN55] timekeeper, or commissary attendant[FN56] may qualify for a lien. The courts have upheld liens on a variety of objects, including the contents of a drugstore,[FN57] iron rails on a railroad track used in connection with a sawmill business,[FN58] lumber produced by a sawmill,[FN59] personal property used by a firm engaged in the operation of a stone manufacturing plant,[FN60] and an abstract plant.[FN61]


[FN53] FS § 713.58(1).

§ 15. For labor or services rendered--Removal of property subject to lien

It is a misdemeanor[FN62] for any person, knowingly, willfully, and with intent to defraud, to remove any property on which a lien has accrued, without first making full payment to the person performing labor or services, of all sums due and payable for them, or without first having the written consent of that person to remove the property.[FN63] If the property is removed and the remover utters, delivers, or gives any check, draft, or written order for the payment of money in payment of the indebtedness secured by the lien, and then stops payment on the check, draft, or written order, that is prima facie evidence of intent to defraud if the possessory right and lien of the person performing labor or services is released, relinquished, and lost by the removal of the property.[FN64]


[FN62] FS § 713.58(4).
[FN63] FS § 713.58(2).
[FN64] FS § 713.58(3).


§ 41. Jurisdiction

All liens of any kind, whether created by statute or the common law, and whether regarded as merely possessory or not, may be enforced by proceedings in chancery.[FN65] The foreclosure of liens, being a matter of equitable cognizance, is therefore within the jurisdiction of the circuit courts.[FN66]
A statutory lien may be enforced in equity though a statutory remedy is provided, unless the statutory remedy is made exclusive.[FN67] Where the statute creating the lien does not provide a statutory method for its enforcement, it must be enforced in equity.[FN68]

Practice Guide:
In the absence of a request for the transfer of a cause to enforce a lien from the equity side to the law side of a court, it is not the responsibility of the trial judge to transfer the cause on the judge's own motion.[FN69]
A defendant who seeks to invoke the equitable jurisdiction of the court by imposing a lien thereby waives the right to object to the jurisdiction of the equity court to assess the plaintiff's damages.[FN70]


[FN65] FS § 68.04.
[FN66] Clark v. Hollingsworth, 138 Fla. 2, 188 So. 827 (1939); Brickell v. Palbicke, 123 Fla. 508, 167 So. 44 (1936); Haimovitz v. Hector, 79 Fla. 28, 83 So. 666 (1920).

Such jurisdiction may not be abridged or taken away by legislative act. Sivort Co. v. State, 136 Fla. 179, 186 So. 671 (1939).

Lien foreclosures of real estate are matters in equity. Alexdex Corp. v. Nachon Enterprises, Inc., 641 So. 2d 858, 19 Fla. L. Weekly S417 (Fla. 1994).

Legal Encyclopedias
As to jurisdiction of circuit courts generally, see Fla. Jur. 2d, Courts and Judges.

Forms
Complaint, petition, or declaration—To foreclose lien—General form. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 41, 42.
—To foreclose stonecutter's lien for services rendered. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 43.
—By employee—To foreclose statutory lien for services rendered employer. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 44.
—By county—To foreclose lien for cost of destroying insects infesting defendant's orchard. 16 Am. Jur. Pleading and Practice Forms, Liens, Form 45.
—To enforce lien—By hospital—Against insurance carrier—For medical care and services rendered to injured person during emergency. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 46.
Complaint in federal court—Diversity of citizenship—For declaration of lien priority and for foreclosure. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 50.
Order—For warrant of seizure of chattel upon which plaintiff seeks to foreclose lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 71.
Warrant of seizure—Commanding sheriff to seize chattels on which lien is claimed. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 72, 73.
Undertaking or bond—On warrant of seizure—By corporate surety. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 74.
—By individual principal and surety. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 75.
Order—Appointing appraisers of property subject to lien. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 76.
Oath of appraiser. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 77.
Report of appraisers. 16A Am. Jur. Pleading and Practice Forms, Liens, Form 78.
[FN67] Lockett v. Robinson, 31 Fla. 134, 12 So. 649 (1893).

Where a lien is created by statute, and no adequate or exclusive remedy is provided for enforcing it, resort to a court of equity may generally be had. Southern Attractions, Inc. v. Grau, 93 So. 2d 120 (Fla. 1956).
[FN68] Standard Fertilizer Co. v. State, for Use of Groves, 130 Fla. 350, 177 So. 548 (1937).
[FN69] Wood v. Wilson, 84 So. 2d 32 (Fla. 1955).
[FN70] Fink v. Bluestein, 169 So. 2d 335 (Fla. Dist. Ct. App. 3d Dist. 1964)

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