No.  In states that have adopted the Uniform Commercial Code (UCC), courts will probably hold that the possessory stableman’s lien is superior, even if the bank’s UCC Financing Statement was filed before the stableman took possession.

When Does the Conflicting Lien Situation Arise?  If someone borrows money to buy a horse or horses, the bank will often require the borrower to sign a security agreement pledging the horse(s) as collateral on the note.  When the borrower stops making payments on the loan, the bank normally will repossess the horses and sell them to foreclose on the note.  In some instances, when a borrower stops paying the bank, they also stop paying the boarding facility that is taking care of their horses.  The nonpayment of board gives the boarding facility a statutory stableman’s lien on the horse(s) as long as the boarding facility maintains possession.  Let’s assume the bank’s lien was first in time–i.e. the bank lent the purchase money to the owner and filed a UCC Financing Statement before the boarding facility took possession of the horses. The question becomes, who is entitled to the first lien on the horses…the bank or the stableman?  Also, is the bank entitled to come onto the boarding facility’s property and repossess the horses?

Under Section 9.333 of the UCC, the Possessory Lien Has Priority.  Section 9.333 and its Official Comment under the Texas version of the UCC states that "the possessory lien has priority over a security interest unless the possessory lien is created by a statute that expressly provides otherwise…the possessory lien takes priority, even if the statute has been construed judicially to make the possessory lien subordinate."  This means the bank’s lien, even if prior filed, is subordinate to the stableman’s lien.

WARNING–Courts May Follow Old Cases.  Even though the UCC is clear on this, a trial court in one of my cases found that the stableman’s lien was subordinate to a bank’s security interest.  The court cited Blackford v. Ryan, 61 S.W. 161 (Tex. Civ. App. 1901)(holding that a bank’s pre-existing security interest is superior to an agister’s lien when a horse was placed in a stable without the bank’s knowledge).  This case, as well as several other pre-1930 Texas cases with similar holdings, interpreted the common law agister’s lien and not the statutory lien under Section 70.003 of the then non-existent Property Code.  These cases were also decided before Texas adopted the UCC.  But the cases are still presented in Texas Jurisprudence and other legal treatises as being current law.  There are many cases that have found the possessory lien to be superior when it comes to garagemen keeping automobiles under Section 70.003, but no Texas cases involving stablemen.  Despite the current lack of appellate review on the issue, I think most courts will defer to the UCC and the car cases and hold that the stableman’s lien is superior.

In most states, trainers do not have an express statutory lien for unpaid training fees and training-related expenses unrelated to the care of horses such as show entry fees and hauling.  This means, unless a trainer has a written security agreement signed by the owner providing a lien on the horses in the event of nonpayment of training fees, the law is unclear as to whether a trainer can hold or sell the owner’s horse when training fees remain unpaid.  You need to check your state’s statutes, however, as some states’ stableman’s liens do expressly provide a lien for training services. Oklahoma’s stableman’s lien statute, for example, expressly includes a lien for training services.  You can find your state’s lien statutes on Equine Law and Horsemanship Safety.

What if My State Has a Stableman’s or Agister’s Lien Statute but No Trainer’s Lien?  Currently, every state except Rhode Island has a stableman’s or agister’s lien statute.  These statutes provide those who care for, board, pasture, or stable the horses of another with a lien on the horse if charges related to the care of the horse are not paid.  Charges related to the "care" typically include the monhtly board rate, supplements, wormer, vaccinations, farrier, and veterinary services paid or advanced by the caregiver on behalf of the owner, and other services related to the care, health, and maintenance of the horses.  See Carney v. Wallen, 665 N.W.2d 439 (Iowa Ct. App. 2003)(holding that a trainer who provided only training and did not also provide board or other services related to the "care" of the horses could not obtain a stableman’s lien because training services do not pertain to actions or services performed in the course of acting as a stable keeper).

Continue Reading Do Horse Trainers Have a Lien on Horses they Train for Unpaid Training Fees?

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.

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).