Texas Horse Lawyer & Attorney : Alison Rowe Law Firm : Equine Legal Matters, Racing, Thoroughbreds : Dallas, Bryan, Texas

In many cases, the proceeds from a stock breeder's or stable keeper's lien foreclosure sale will not be enough to satisfy your debt.  In those cases, you may sue the owner for the deficiency, if any.

The law suit may not be worth it, however, as you could end up spending more on legal fees than you are owed. For these reasons, I recommend that everyone who takes a horse to be boarded or bred obtain a written contract providing an agreement for the customer to pay for your services as well as the services of third parties for their horse's care while in your possession. 

Ideally, the agreement would include either 1) credit card information from the customer and an agreement that it will be charged for your services; or 2) the customer’s agreement that you may sell their horse at a public or private sale without notice to them if their account is in arrears more than 30 days.

This is especially important for farriers and veterinarians, as Texas law does not provide them any statutory lien to secure payment for their services.

• Print
• Comments
• Trackbacks

The law is vague as to what, specifically, constitutes a “public sale” as referenced in the stock breeder’s and stable keeper’s lien statutes. This clearly would not include a sale by private treaty to a third party without the possibility of others bidding on the horse. If you are foreclosing on either the stock breeder’s or stable keeper’s lien, the safest thing to do is to put the horse, upon proper notice to the debtor, in a horse or livestock auction that is being held in your area. You could also hold your own auction, provided that you provide sufficient public notice (i.e. put information about your sale in the “notices” section of the local newspaper or on the designated area of the courthouse steps in your county) so that the public may show up to bid on the horse.

• Print
• Comments
• Trackbacks

When you sell a registered Thoroughbred in a valid foreclosure sale, you may or may not be able to obtain the Certificate of Foal Registration (i.e. the “Jockey Club papers”) from the original owner. In either case, pursuant to Rule 9 of the Jockey Club’s American Stud Book, you or the buyer must provide the Jockey Club with the following items in order to have the horses’ papers transferred to your name or the buyer’s name:

1) A check or money order payable to The Jockey Club covering the fee for Duplicate Certificate of Foal Registration;

2) A set of four color photographs of the horse (front, both sides, and rear views) clearly showing the color, and the markings (or lack of markings) on the head, legs and body;

3) A completed and signed Duplicate Certificate Form containing the written description of the markings on the horse, including the exact location of the head and neck cowlicks;

4) Proof of ownership of that specific horse (for example, a bill of sale or canceled check including the name or pedigree of the horse, date of sale and the name of the new owner);

5) An opinion from an attorney, indicating that the sale was conducted in accordance with the laws of the state; and

6) Any further evidence and assurances as The Jockey Club may require, such as genetic typing, parentage verification, or information regarding the circumstances and validity of the sale.

More information, including the American Stud Book rules discussed above, can be found on the Jockey Club’s website.

For instructions on transferring ownership of a registered Appaloosa, go to the APHA's website. 

• Print
• Comments
• Trackbacks

Fortunately, unlike many states, Texas does not require holders of stock breeder's liens to file suit or involve the courts in order to enforce their liens—provided the enforcement provisions in the statute are precisely followed.

If you own or stand a stallion and a mare owner does not pay for the breeding services, you have a stock breeder’s lien on the resulting foal (but not the mare) under Section 70.201 of the Texas Property Code. You may sell the foal in a public sale and apply the proceeds to the unpaid stallion fee and related service charges. Your lien remains in force for 10 months after the date the foal is born, but importantly, it cannot be enforced until 5 months after the date the foal is born.

Note: If you are in possession of the mare that was bred and the owner has not paid for board on the mare, you may also have a stable keeper’s lien on the mare and may enforce it as set forth in my previous blog entry, How to Enforce Texas Stable Keeper's Lien.

STEP 1

As soon as it becomes apparent that the mare owner is not going to pay for the breeding services, it is advisable (but not required) that you file a UCC Financing Statement putting the world on notice that you have a lien on the resulting foal (whether born or unborn at the time the debt accrues) for unpaid stallion service. The Financing Statement is best filed in both the county where you stand the stallion as well as with the Texas Secretary of State. Be sure to provide sufficient information in the Financing Statement to identify the foal (registered names and registration numbers of your stallion and the mare; date and place of stallion service, etc.) Instructions on filing the Financing Statement can be found at the Texas Secretary of State's website.

STEP 2

When the foal turns 5 months of age, send a notice of sale to the debtor.  For a form of the notice of sale, click here.

STEP 3

Sell the foal at a public sale 30 days or more after you send the notice of sale referenced in Step 2.

Note: If you are not in possession of the foal when it becomes 5 months of age, you may need to take your notice of sale and UCC Financing Statement to the sheriff’s office of the county where the foal is located and have them help you seize the foal so it can be sold.

• Print
• Comments
• Trackbacks

Fortunately, unlike many states, Texas does not require lien holders to file suit or involve the courts in order to enforce the stable keeper's lien—provided the enforcement provisions in the statute are precisely followed.

If you are boarding someone else’s horse, the board bill is 60 days or more past due, and you still have possession of the horse, you have an enforceable stable keeper’s lien under Section 70.003 of the Texas Property Code and may sell the horse in a public sale to satisfy the debt.   In order to enforce a stable keeper’s lien, you must follow the following steps:

STEP 1

If the owner’s residence is not in Texas or not known, you do not need to send the notices set forth in Step 1 and Step 2 below. You may sell the horse at a public sale without notice to the owner—provided the board bill is at least 60 days’ past due and you have possession of the horse. Still, it is advisable that you keep some proof that you billed the customer and they did not remit payment before proceeding with the sale.

If the owner’s residence is in Texas and known, you start the lien enforcement process by sending a demand for payment by certified mail and regular mail to the owner’s last known address.  Form Demand Letter.

STEP 2

If the owner does not pay the amount owed before the 11th day after the date you sent the demand letter referenced above, send out a notice of sale by certified mail and regular mail to the owner’s last known address.  Form Notice of Sale.

STEP 3

Sell the horse at a public sale 20 or more days after you send the notice referenced in Step 2.   

Note: If you are fortunate enough to get more for the horse at auction than you are owed, you must pay the overage to the owner. If the owner has moved out of Texas or its residence is unknown, you must pay the overage to the county treasurer of the county in which you boarded the horse.

Remember—the stable keeper’s lien is a possessory lien. This means that if you give the horse back to the owner before the bill is paid, the stable keeper’s lien is, practically speaking, no longer enforceable. In that case, you will need to file suit against the debtor to collect the unpaid board. This is why it is essential to obtain a written board agreement from every customer that contains the date you started boarding the horse, sets forth your fee for board, and includes an agreement that your customer will pay out-of-pocket expenses for care such as worming, farrier, supplements, and vet work.

• Print
• Comments
• Trackbacks

When you sell a horse at a lien foreclosure sale, you will want to transfer its registration papers into the name of the buyer at auction, whether that be you or a third party.  Most breed registries have policies and procedures relating to horses purchased in a lien foreclosure. Depending on the breed registry, you will be asked to provide certain items such as a notarized affidavit stating that the stableman has complied with the law relating to the foreclosure; a copy of the written notice of the foreclosure sale; a copy of the statute by which the foreclosure was conducted; and a notarized bill of sale from the stableman. If you can provide all of the items requested by the breed registry, you will most likely be able to get the horse’s papers transferred into your name.

• Print
• Comments
• Trackbacks

Unlike many other states, Texas does not provide veterinarians or farriers with a lien on a horse to secure payment for professional services rendered. The stableman’s lien in Texas does provide a farrier or vet who had a horse in his or her care a lien on the animal for costs of boarding the animal. Also, both vets and farriers can obtain contracts with their customers providing for a contractual lien on the animal to secure payment for work done.

• Print
• Comments
• Trackbacks

Who has a stock breeder’s lien, and to which animal(s) does the lien apply? An owner or keeper of a stallion, jack, bull, or boar confined to be bred for profit has a preference lien on the offspring of the animal for the amount of the charges for the breeding services, unless the owner or keeper misrepresents the animal by false pedigree. In the case of a stallion, the lien would be on the foal resulting from the breeding, but would not extend to the mare that was serviced by the stallion.

How long does the stock breeder’s lien last? The stock breeder’s lien remains in force for 10 months from the day that the foal is born, but the lien may not be enforced until five months after the date of birth of the foal. The lien exists during these time parameters, regardless of whether the mare or foal is still in the possession of the stallion owner.

How is the stock breeder’s lien enforced? Your foreclosure has to comply with Sections 54.044 and 54.045 of the Texas Property Code. The stallion owner would seize the foal produced by the stallion, usually with the assistance of the sheriff’s department. Before selling the foal at public auction, the stallion owner must first send the mare owner a written notice complying with Section 54.045 of the Texas Property Code.

This entry addresses only the law in Texas.  The University of Vermont's website, Equine Law and Horsemanship Safety, provides a list of breeder's liens in other states (scroll to bottom to find your state).

• Print
• Comments
• Trackbacks

Texas law provides liens for two specific types of services provided to horse owners: boarding services (the stable keeper's lien) and breeding services (the stock breeder’s lien).   This blog provides an overview of the stable keeper's lien.

How does a stable keeper's lien work? The Texas stable keeper's lien, also known as an “agister’s lien,” is a possessory lien that applies when one person takes care of horses or other livestock of another by providing board or pasture for the horse or other livestock. If you run a stable or keep other people’s horses on your land or land you are leasing, you may keep possession of the horse until your board bill is paid by the horse owner. If the nonpayment persists, you can have the horse sold to collect the amount owed.

How do I foreclose on a stable keeper's lien? Your foreclosure has to comply with Section 70.005 of the Texas Property Code. Under that section, you must: 1) have possession of the horse for 60 days after the date the charges accrue; 2) make a written request to the owner to pay the unpaid bill; and 3) if the charges are not paid on or before the 11th day after you made demand for payment, you may sell the horse at public auction after giving the horse owner 20 days’ written notice.

What if someone is interested in buying the horse? Can I sell it to them or does it have to be sold at an auction? Texas law provides that you must sell the horse at a public sale. This is to prevent boarding facilities from selling a horse worth a lot of money to a friend for much less than the horse is worth, just to satisfy the debt. To get around the public auction requirement, boarding facilities can draft clauses into their boarding agreements allowing them to sell to horse by private treaty. The boarding contract may also provide for interest and late fees for past-due board.

My boarder left a lot of tack at my barn and did not pay their board. Can I keep or sell the tack to satisfy the bill? No. The stable keeper's lien only covers the horse itself. Boarding facilities may not hold tack or other equipment as security for payment of past-due board. Again, a boarding facility may draft a clause into their boarding agreement allowing them to keep or sell tack or other equipment belonging to a boarder who does not pay their bill.

This entry only addresses the current law in Texas.  The University of Vermont's website, Equine Law and Horsemanship Safety, provides a list of agister's lien statutes in other states
(scroll to bottom to find your state).

• Print
• Comments
• Trackbacks