The 2011 breeding season in North America has officially drawn to a close. The BloodHorse.com posted an article on Tuesday with commentary from several major Thoroughbred stud farms about how they fared during the 2011 breeding season. Some stallion farms did better in 2011 than in 2010 (primarily those where proven sires stood in 2011). Overall, stallion farms found that breeders were strapped for cash in 2011, reducing the overall number of mares kept for breeding and the budgets for stud fees. Breeders were also more selective in 2011. They chose proven sires over young stallions, and fled with their mares when veteran stallions’ progeny did not perform as expected. 

Many stallion farms ran promotions in 2011 to attract mare owners. Promotions were especially popular for new, unproven sires. Promotions ranged in type and complexity, for example:

  • Reduced stud fees across the board
  • Free breedings to freshman sires
  • Multiple mare discounts
  • Special individualized packages for long-time customers; and
  • Lifetime breeding rights programs

Lifetime Breeding RightsSpendthrift Farm near Lexington is one example of a stallion farm that offered lifetime breeding rights in its 2011 breeding packages. Spendthrift calls their lifetime breeding rights package the “Share the Upside Program.” These packages are designed to promote new studs and provide them with larger books of mares early in their careers. 

How the Spendthrift program works: The breeder puts down a deposit on a young stud, and agrees to breed a mare to the stallion during his first and second years at stud. The mare owner pays a stud fee when each resulting foal stands and nurses. After the two foals are born and the mare owner pays both stud fees, the stud farm grants the breeder a lifetime breeding right in the stallion. Usually, the number of contracts is limited so that the stallion owner can maintain a 50% interest in each young stallion.

Tips for Stallion Farms: Make sure the terms of all special stallion promotions are in writing and signed by the breeders. If the stud fees are not due until the foal stands and nurses, be sure to retain a security interest (in writing) in the mare, the foal, and/or the breeder’s certificate. Be mindful of the fact that granting lifetime breeding rights may hinder your ability to later sell the stallion as a whole. The issue of what happens if you want to sell the stallion as a whole needs to be addressed in a contract between you and those who purchase lifetime breeding rights. 

How did your 2011 breeding season go? Please post comments and share what worked for you, and what didn’t.

Follow me on Twitter @alisonmrowe

A gentleman recently told me that his stallion had gotten loose, gone onto his neighbor’s unfenced property, and "worried" the neighbor’s mares.  The neighbor shot at the stallion with a shotgun, and stated that the police told him he was justified in doing so because the stallion was "trespassing on his property."

Is the stallion owner liable for property damage or injury to persons caused by his stallion?  Generally speaking, not unless the stallion owner knowingly let the stallion roam free.

Important to this analysis is that Texas is, generally speaking, still an open range state.  That is–livestock may still roam at large in Texas with two exceptions:

  1. Public highwaysThe Texas Agriculture Code states "[a] person who owns or has responsibility for the control of a horse, mule, donkey, cow, bull, steer, hog, sheep, or goat may not knowingly permit the animal to traverse or roam at large, unattended, on the right-of-way of a highway." Tex. Agric. Code § 143.102 (Vernon 2004)(emphasis added). The statute defines a "highway" as "a U.S. highway or a state highway in this state, but does not include a numbered farm-to-market road." Id. at § 143.101. Therefore, U.S. and state highways in Texas are effectively considered closed ranged. Conversely, the 40,000-plus miles of farm-to-market roads in Texas are unaffected by this statute.
  2. Stock Law Counties or Areas.  Chapter 143 of the Agriculture Code permits local elections to adopt a law (a.k.a. "stock law"), where a person may not permit any animal of the class mentioned in the proclamation to run at large in the county or area in which the election was held. A typical stock law will prohibit horses, mules, donkeys, sheep, goats, and cattle from running at large.

    As expressly provided by the Code, some counties in Texas have enacted county wide stock laws, yet others have chosen to elect stock laws only in certain precincts or areas within said county. Unfortunately, there is no statewide index that traces the counties or areas where stock laws have been passed.

Continue Reading Is a Horseowner Liable for Damages if a Horse Gets Loose?

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.

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).