Lien
LIEN, in law. The word lien is literally the French for a band, cord or chain, and keeping in mind that meaning we see in what respect it differs from a pledge on the one hand and a mortgage on the other. It is the bond which attaches a creditor's right to a debtor's property, but which gives no right ad rem, i.e. to property in the thing; if the property is in the possession of the creditor he may retain it, but in the absence of statute he cannot sell to recover what is due to him without the ordinary legal process against the debtor; and if it is not in possession, the law would indeed assist him to seize the property, and will hold it for him, and enable him to sell it in due course and pay himself out of the proceeds, but does not give him the property itself. It is difficult to say at what period the term lien made its appearance in English law; it probably came from more than one source. In fact, it was used as a convenient phrase for any right against the owner of property in regard to the property not specially defined by other better recognized species of title.
The possessory lien of a tradesman for work done on the thing, of a carrier for his hire, and of an innkeeper for his bill, would seem to be an inherent right which must have been in existence from the dawn, or before the dawn, of civilization. Probably the man who made or repaired weapons in the Stone Age was careful not to deliver them until he received what was stipulated for, but it is also probable that the term itself resulted from the infusion of the civil law of Rome into the common law of England which the Norman Conquest brought about, and that it represents the " tacit pledge " of the civil law. As might be expected, so far as the possessory lien is concerned the common law and civil law, and probably the laws of all countries, whether civilized or not, coincide; but there are many differences with respect to other species of lien. For instance, by the common law in this respect a legacy of the feudal system a landlord has a lien over his tenant's furniture and effects for rent due, which can be enforced without the assistance of the law simply by the landlord taking possession, personally or by his agent, and selling enough to satisfy his claim; whereas the maritime lien is more distinctly the product of the civil law, and is only found and used in admiralty proceedings, the high court of admiralty having been founded upon the civil law, and still (except so far as restrained by the common-law courts prior to the amalgamation and co-ordination of the various courts by the Judicature Acts, and as affected by statute law) acting upon it. The peculiar effects of this maritime lien are discussed below. There is also a class of liens, usually called equitable liens (e.g. that of an unpaid vendor of real property over the property sold), which are akin to the nature of the civil law rather than of the common law. The word lien does not frequently occur in statute law, but it is found in the extension of the common-law " carriers' or shipowners' lien " in the Merchant Shipping Act 1894; in the definition, extension and limitation of the vendor's lien; in the Factors Act 1877, and the Sale of Goods Act 1893; in granting a maritime lien to a shipmaster for his wages and disbursements, and in regulating that of the seamen in the Merchant Shipping Act 1894; and in the equity jurisdiction of the county courts 1888.
Common-Law Liens. These may be either particular, i.e. a right over one or more specified articles for a particular debt, or gerieral, i.e. for all debts owing to the creditor by the debtor.
The requisites for a particular lien are, firstly, that the creditor should be in possession of the article; secondly, that the debt should be incurred with reference to the article; and thirdly, that the amount of the debt should be certain. It may be created by express contract, by implied contract (such as the usage of a particular trade or business), or as a consequence of the legal relation existing between the parties. As an example of the first, a shipowner at common law has a lien on the cargo for the freight; but though the shipper agrees to pay dead freight in addition, i.e. to pay freight on any space in the ship which he fails to occupy with his cargo, the shipowner has no lien on the cargo for such dead freight except by express agreement. The most usual form of the second is that which is termed a possessory lien the right a ship-repairer has to retain a ship in his yard till he is paid for the repairs executed upon her, 1 and the right a cobbler has to retain a pair of shoes till he is paid for the repairs done to them. But this lien is only in respect of the work done on, and consequent benefit received by, the subject of the lien. Hence an agistor of cattle has no lien at common law upon them for the value of the pasturage consumed, though he may have one by agreement; nor a conveyancer upon deeds which he has not drawn, but which are in his possession for reference, The most common example of the third is that of a carrier, who is bound by law to carry for all persons, and has, therefore, a lien for the price of the carriage on the goods carried. It has been held that even if the goods are stolen, and entrusted to the carrier by the thief, the carrier can hold them for the price of the carriage against the rightful owner. Of the same nature is the common-law lien of an innkeeper on the baggage of his customer for the amount of his account, he being under a legal obligation to entertain travellers generally. Another instance of the same class is where a person has obtained possession of certain things over which he claims to hold a lien in the exercise of a legal right. For example, when a lord of a manor has seized cattle as estrays, he has a lien upon them for the expense of their keep as against the real owner; but the holder's claim must be specific, otherwise a general tender of compensation releases the lien.
A general lien is a right of a creditor to retain property, not merely for charges relating to it specifically, but for debts due on a general account. This not being a common-law right, is viewed by the English courts with the greatest jealousy, and to be enforced must be strictly proved. This can be done by proof either of an express or implied contract or of a general usage of 1 This right, however, is not absolute, but depends on the custom of the port (Raitt v. Mitchell, 1815, 4 Camp. 146).
trade. The first of these is established by the ordinary methods or by previous dealings between the parties on such terms; the second is recognized in certain businesses; it would probably be exceedingly difficult, if not impossible, to extend it at the present time to any other trades. When, however, a lien by general usage has once been judicially established, it becomes part of the Law Merchant, and the courts are bound to recognize and enforce it. The best known and most important instance is the right of a solicitor to retain papers in his hands belonging to his client until his account is settled. The solicitor's lien, though probably more commonly enforced than any other, is of no great antiquity in English law, the earliest reported case of it being in the reign of James II. ; but it is now of a twofold nature. In the first place there is the retaining lien. This is similar in kind to other possessory liens, but of a general nature attaching to all papers of the client, and even to his money, up to the amount of the solicitor's bill, in the hands of the solicitor in the ordinary course of business. There are certain exceptions which seem to have crept in for the same reason as the solicitor's lien itself, i.e. general convenience of litigation; such exceptions are the will of the client after his decease, and proceedings in bankruptcy. In this latter case the actual possessory lien is given up, the solicitor's interests and priorities being protected by the courts, and it may be said that the giving up the papers is really only a means of enforcing the lien they give in the bankruptcy proceedings. In the second place there is what is called a charging lien more correctly classed under the head of equitable lien, since it does not require possession, but is a lien the solicitor holds over property recovered or preserved for his client. He had the lien on an order by the court upon a fund in court by the common law, but as to property generally it was only given by 23 & 24 Viet. c. 127, 28; and it has been held to attach to property recovered in a probate action (ex parte Tweed, C.A. 1899, 2 Q.B. 167). A banker's lien is the right of a banker to retain securities belonging to his customer for money due on a general balance. Other general liens, judicially established, are those of wharfingers, brokers and factors (which are in their nature akin to those of solicitors and bankers), and of calico printers, packers of goods, fullers (at all events at Exeter), dyers and millers; but in all these special trades it is probable that the true reason is that the account due was for one continuous transaction. The calico would come to be printed, the goods to be packed, the cloth to be bleached, the silk to be dyed, and the corn to be ground, in separate parcels, and at different times, but all as one undertaking; and they are therefore, though spoken of as instances of general lien, only adaptations by the courts of the doctrine of particular lien to special peculiarities of business. In none of these cases would the lien exist, in the absence of special agreement, for other matters of account, such as money lent or goods sold.
Equitable Liens. " Where equity has jurisdiction to enforce rights and obligations growing out of an executory contract," e.g. in a suit for specific performance, " this equitable theory of remedies cannot be carried out unless the notion is admitted that the contract creates some right or interest in or over specific property, which the decree of the court can lay hold of, and by means of which the equitable relief can be made efficient. The doctrine of equitable liens supplies this necessary element; and it was introduced for the sole purpose of furnishing a ground for these specific remedies which equity confers, operating upon particular identified property instead of the general pecuniary recoveries granted by courts of common law. It follows, therefore, that in a large class of executory contracts express and implied, which the common law regards as creating no property, right nor interest analogous to property, but only a mere personal right'to obligation, equity recognizes in addition to the personal obligation a particular right over the thing with which the contract deals, which it calls a lien, and which though not property is analogous to property, and by means of which the plaintiff is enabled to follow the identical thing and to enforce the defendant's obligation by a remedy which operates directly on the thing.
The theory of equitable liens has its ultimate foundation, therefore, in contracts express or implied which either deal or in some manner relate to specific property, such as a tract of land, particular chattels or securities, a certain fund and the like. It is necessary to divest oneself of the purely legal notion concerning the effects of such contracts, and to recognize the fact that equity regards them as creating a charge upon, or hypothecation of, the specific thing, by means of which the personal obligation arising from the agreement may be more effectively enforced than by a mere pecuniary recovery at law " (Pomeroy, 2 Eq. Jur. 232).
This description from an American text-book seems to give at once the fullest and most concise definition and description of an equitable lien. It differs essentially from a common-law lien, inasmuch as in the latter possession or occupation is as a rule necessary, whereas in the equitable lien the person claiming the lien is seldom in possession or occupation of the property, its object being to obtain the possession wholly or partially. A special instance of such a lien is that claimed by a publisher over the copyright of a book which he has agreed to publish on terms which are not complied with for example, the author attempting to get the book published elsewhere. It cannot perhaps be said that this has been absolutely decided to exist, but a strong opinion of the English court of exchequer towards the close of the 18th century was expressed in its favour (Brook v. Wenlivorth, 3 Anstruther 881). Other instances are the charging lien of a solicitor, and the lien of a person on improvements effected by him on the property of another who " lies by " and allows the work to be done before claiming the property. So also of a trustee for expenses lawfully incurred about the trust property. The power of a limited liability company to create a lien upon its own shares was in 1901 established (Allen v. gold Reefs, etc., C.A. 1900, i Ch. 656).
Maritime Liens. Maritime lien differs from all the others yet considered, in its more elastic nature. Where a maritime lien has once attached to property and it may and generally does attach without possession it will continue to attach, unless lost by laches, so long as the thing to which it attaches exists, notwithstanding changes in the possession of and property in the thing, and notwithstanding that the new possessor or owner may be entirely ignorant of its existence; and even if enforced it leaves the owner's personal liability for any balance unrealized intact (the "Gemma," 1899, P. 285). So far as England is concerned, it must be borne in mind that the courts of admiralty were conducted in accordance with the principles of civil law, and in that law both the pledge with possession and the hypothecation without possession were well recognized. The extreme convenience of such a right as the latter with regard to such essentially movable chattels as ships is apparent. Strictly speaking, a maritime lien is confined to cases arising in those matters over which the courts of admiralty had original jurisdiction, viz. collisions at sea, seamen's wages, salvage and bottomry, in all of which cases the appropriate remedy is a proceeding in rem in the admiralty court. In the first of these collisions at sea if there were no maritime lien there would frequently be no remedy at all. When two ships have collided at sea it may well be that the innocent ship knows neither the name nor the nationality of the wrongdoer, and the vessel may escape with slight damage and not have to make a port of refuge in the neighbourhood. Months afterwards it is ascertained that she was a foreign ship, and in the interval she has changed owners. Then, were it not a fact that a maritime lien invisible to the wrongdoer nevertheless attaches itself to his ship at the moment of collision, and continues to attach, the unfortunate owner of the innocent ship would have no remedy, except the doubtful one of pursuing the former owner of the wrong-doing vessel in his own country in a personal action where such proceedings are allowed which is by no means the case in all foreign countries. The same reasons apply, though not possibly with quite the same force, to the other classes of cases mentioned.
Between 1840 and 1873 the jurisdiction of the admiralty court was largely extended. At the latter date it was merged in the probate, divorce and admiralty division of the High Court of Justice. Since the merger questions have arisen as to how far the enlargement of jurisdiction has extended the principle of maritime lien. An interesting article on this subject byj. Mansfield, barrister-at-law, will be found in the Law Quarterly Review, vol. iv., October 1888. It must be sufficient to statehere that where legislation has extended the already existing jurisdiction to which a maritime lien pertained, the maritime lien is extended to the subject matter, but that where a new jurisdiction is given, or where a jurisdiction formerly existing without a maritime lien is extended, no maritime lien is given, though even then the extended jurisdiction can be enforced by proceedings in rem. Of the first class of extended jurisdictions are collisions, salvage and seamen's wages. Prior to 1840 the court of admiralty only had jurisdiction over these when occurring or earned on the high seas. The jurisdiction, and with it the maritime lien, is extended to places within the body of a county in collision or salvage; and as to seamen's wages, whereas they were dependent on the earning of freight, they are now free from any such limitation; and also, whereas the remedy in rem was limited to seamen's wages not earned under a special contract, it is now extended to all seamen's wages, and also to a master's wages and disbursements, and the maritime lien covers all these. The new jurisdiction given over claims for damage to cargo carried into any port in England or Wales, and on appeal from the county courts over all claims for damage to cargo under 300, though it may be prosecuted by proceedings in rem, i.e. by arrest of the ship, yet confers no maritime lien; and so also in the case of claims by material men (builders and fitters-out of ships) and for necessaries. Even though in the latter case the admiralty court had jurisdiction previously to 1840 where the necessaries were supplied on the high seas, yet as it could not be shown that such jurisdiction had ever been held to confer a maritime lien, no such lien is given. Even now there is much doubt as to whether towage confers a maritime lien or not, the services rendered being pursuant to contract, and frequently to a contract made verbally or in writing on the high seas, and being rendered also to a great extent on the high seas. In these cases and to that extent the high court of admiralty would have had original jurisdiction. But prior to 1840 towage, as now rendered by steam tugs expressly employed for the service, was practically unknown, and therefore there was no established catena of precedent to show the exercise of a maritime lien. It may be argued on the one hand that towage is only a modified form of salvage, and therefore entitled to a maritime lien, and on the other that it is only a form of necessary power supplied like a new sail or mast to a ship to enable her to complete her voyage expeditiously, and therefore of the nature of necessaries, and as such not entitled to a maritime lien. The matter is not of academical interest only, for though in the case of an inward-bound ship the tug owner can make use of his statutory .tight of proceeding in rem, and so obtain much of the benefit of a maritime lien, yet in the case of an outwardbound ship, if she once gets away without payment, and the agent or other authorized person refuses or is unable to pay, the tug owner's claim may, on the return of the ship to a British port, be met by an allegation of a change of ownership, which defeats his right of proceeding at all if he has no maritime lien; whereas if he has a maritime lien he can still proceed against the ship and recover his claim, if he has not been guilty of laches.
A convenient division of the special liens other than possessory on ships may be made by classifying them as maritime, statutorymaritime or quasi-maritime, and statutory. The first attach only in the case of damage done by collision between ships on the high seas, salvage on the high seas, bottomry and seamen's wages so far as freight has been earned ; the second attach in cases of damage by collision within the body of a county, salvage within the body of a county, life salvage everywhere, seamen's wages even if no freight has been earned, master's wages and disbursements. These two classes continue to attach notwithstanding a change of ownership without notice of the lien, if there have been no laches in enforcing it(the"BoldBucdeuch," 1852, 7 Moo. P.C. 267; the " Kong Magnus, 1891, P. 223). The third class, which only give a right to proceed in rem, i.e. against the ship itself, attach, so long as there is no bona fide change of ownership, without citing the owners, in all cases of claims for damage to ship and of claims for damage to cargo where no owner is domiciled in England or Wales. Irrespective of this limitation, they attach in all cases not only of damage to cargo, but also of breaches of contract to carry where the damage does not exceed 300, when the suit must be commenced in a county court having admiralty jurisdiction; and in cases of claims for necessaries supplied elsewhere than in the ship's home port, for wages earned even under a special contract by masters and mariners, and of claims for towage. In all three classes the lien also exists over cargo where the suit from its nature extends to it, as in salvage and in some cases of bottomry or respondentia, and in cases where proceedings are taken against cargo by the shipowner for a breach of contract (cargoes " Argos " and the " Hewsons," 1873, L.R. 5 P.C. 134; the " Alina," 1880, 5 Ex. D. 227).
Elsewhere than in England, and those countries such as the United States which have adopted her jurisprudence in maritime matters generally, the doctrine of maritime lien, or that which is substituted for it, is very differently treated. Speaking generally, those states which have adopted the Napoleonic codes or modifications of them France, Italy, Spain, Holland, Portugal, Belgium, Greece, Turkey, and to some extent Russia have instead of a maritime lien the civil-law principle of privileged debts. Amongst these in all cases are found claims for salvage, wages, bottomry under certain restrictions, and necessaries. Each of these has a privileged claim against the ship, and in some cases against freight and cargo as well, but it is a matter of very great importance that, except in Belgium, a claim for collision damage (which as we have seen confers a maritime lien, and one of a very high order, in Great Britain) confers no privilege against the wrong-doing ship, whilst in all these countries an owner can get rid of his personal liability by abandoning the ship and freight to his creditor, and so, if the ship is sunk, escape all liability whilst retaining any insurance there may be. This, indeed, was at one time the law of Great Britain; the measure of damage was limited by the value of the res; and in the United States at the present time a shipowner can get rid of his liability for damage by abandoning the ship and freight. A different rule prevails in Germany and the Scandinavian states. There claims relating to the ship, unless the owner has specially rendered himself liable, confer no personal claim at all against him. The claim is limited ab initio to ship and freight, except in the case of seamen's wages, which do confer a personal claim so far as they have been earned on a voyage or passage completed prior to the loss of the ship. In all maritime states, however, except Spain, a provisional arrest of the ship is allowed, and thus between the privilege accorded to the debt and the power to arrest till bail is given or the ship abandoned to creditors, a condition of things analogous to the maritime lien is established; especially as these claims when the proper legal steps have been taken to render them valid usually by endorsement on the ship's papers on board, or by registration at her port of registry attach to the ship and follow her into the hands of a purchaser. They are in fact notice to him of the incumbrance.
Duration of Lien. So long as the party claiming the lien at common law retains the property, the lien continues, notwithstanding the debt in respect of which it is claimed becoming barred by the Statute of Limitations (Higgins v. Scott, 1831, 2 B. & Aid. 413). But if he takes proceedings at law to recover the debt, and on a sale of the goods to satisfy the judgment purchases them himself, he so alters the nature of the possession that he loses his lien (Jacobs v. Latour, 5 Bing. 130). An equitable lien probably in all cases continues, provided the purchaser of the subject matter has notice of the lien at the time of his purchase. A maritime lien is in no respect subject to the Statute of Limitations, and continues in force notwithstanding a change in the ownership of the property without notice, and is only terminated when it has once attached, by laches on the part of the person claiming it (the " Kong Magnus," 1891, P. 223). There is an exception in the case of seamen's wages, where by 4 Anne c. 16 (Slat. Rev. 4 & 5 Anne c. 3) all suits for seamen's wages in the Admiralty must be brought within six years.
Ranking of Maritime Liens. There may be several claimants holding maritime and other liens on the same vessel. For example, a foreign vessel comes into collision by her own fault and is damaged and her cargo also; she is assisted into port by salvors and ultimately under a towage agreement, and put into the hands of a shipwright who does necessary repairs. The innocent party to the collision has a maritime lien for his damage, and the seamen for their wages; the cargo owner has a suit in rem or a statutory lien for damage, and the shipwright a possessory lien for the value of his repairs, while the tugs certainly have a right in rem and possibly a maritime lien also in the nature of salvage. The value of the property may be insufficient to pay all claims, and it becomes a matter of great consequence to settle whether any, and if so which, have priority over the others, or whether all rank alike and have to divide the proceeds of the property pro raid amongst them. The following general rules apply: liens for benefits conferred rank against the fund in the inverse, and those for the reparation of damage sustained in the direct order of their attaching to the res; as between the two classes those last mentioned rank before those first mentioned of earlier date; as between liens of the same class and the same date, the first claimant has priority over others who have not taken action. The courts of admiralty, however, allow equitable considerations, and enter into the question of marshalling assets. For example, if one claimant has a lien on two funds, or an effective right of action in addition to his lien, and another claimant has only a lien upon one fund, the first claimant will be obliged to exhaust his second remedy before coming into competition with the second. As regards possessory liens, the shipwright takes the ship as she stands, i.e. with her incumbrances, and it appears that the lien for seaman's wages takes precedence of a solicitor's lien for costs, under a charging order made in pursuance of the Solicitors Act 1860, 28.
Subject to equitable considerations, the true principle appears to be that services rendered under an actual or implied contract, which confer a maritime lien, make the holder of the lien in some sort a proprietor of the vessel, and therefore liable for damage done by her hence the priority of the damage lien but, directly it has attached, benefits conferred on the property by enabling it to reach port in safety benefit the holder of the damage lien in common with all other prior holders of maritime liens. It is less easy to see why of two damage liens the earlier should take precedence of the later, except on the principle that the res which came into collision the second time is depreciated in value by the amount of the existing lien upon her for the first collision, and where there was more than one damage lien, and also liens for benefits conferred prior to the first collision between the two collisions and subsequent to the second, the court would have to make a special order to meet the peculiar circumstances. The claim of a mortgagee naturally is deferred to all maritime liens, whether they are for benefits conferred on the property in which he is interested or for damage done by it, and also for the same reason to the possessory lien of the shipwright, but both the possessory lien of the shipwright and the claim of the mortgagee take precedence over a claim for necessaries, which only confers a statutory lien or a right to proceed in rem in certain cases. In other maritime states possessing codes of commercial law, the privileged debts are all set out in order of priority in these codes, though, as has been already pointed put, the lien for damage by collision the most important in English law has no counterpart in most of the foreign codes.
Stoppage in Transilu. This is a lien held by an unpaid vendor in certain cases over goods sold after they have passed out of his actual possession. It has been much discussed whether it is an equitable or common-law right or lien. The fact appears to be that it has always been a part of the Law Merchant, which, properly speaking, is itself a part of the common law of England unless inconsistent with it. This particular right was, in the first instance, held by a court of equity to be equitable and not contrary to English law, and by that decision this particular part of the Law Merchant was approved and became part of the common law of England (see per Lord Abinger in Gibson v. Carruthers, 8 M. & W., p. 336 et seq.). It may be described as a lien by the Law Merchant, decided by equity to be part of the common law, but in its nature partaking rather of the character of an equitable lien than one at common law. " It is a right which arises solely upon the insolvency of the buyer, and is based on the plain reason of justice and equity that one man's goods shall not be applied to the payment of another man's debts. If, therefore, after the vendor has delivered the goods out of his own possession and put them in the hands of a carrier for delivery to the buyer, he discovers that the buyer is insolvent,' he may re-take the goods if he can before they reach the buyer's possession, and thus avoid having his property applied to paying debts due by the buyer to other people " (Benjamin on Sales, 2nd ed., 289). This right, though only recognized by English law in 1690, is highly favoured by the courts on account of its intrinsic justice, and extends to quasi-vendors, or persons in the same position, such as consignors who have bought on behalf of a principal and forwarded the goods. It is, however, defeated by a lawful transfer of the document of title to the goods by the vendor to a third person, who takes it bond fide and for valuable consideration (Factors Act 1889; Sale of Goods Act 1893).
Assignment or Transfer of Lien. A lien being a personal right acquired in respect of personal services, it cannot, as a rule, be assigned or transferred; but here again there are exceptions. The personal representative of the holder of a possessory lien on his decease would probably in all cases be held entitled to it ; and it has been held that the lien over a client's papers remains with the firm of solicitors notwithstanding changes in the constitution of the firm (Gregory v. Cresswell, 14 L.J. Ch. 30x3). So also where a solicitor, having a lien on documents for his costs, assigned the debt to his bankers with the benefit of the lien, it was held that the bankers might enforce such lien in equity. But though a tradesman has a lien on the property of his customer for his charges for work done upon it, where the property is delivered to him by a servant acting within the scope of his employment, such lien cannot be transferred to the servant, even if he has paid the money himself; and the lien does not exist at all if the servant was acting without authority in delivering the goods, except where (as in the case of a common carrier) he is bound to receive the goods, in which case he retains his lien for the carriage against the rightful owner. Where, however, there is a lien on property of any sort not in possession, a person acquiring the property with knowledge of the lien takes it subject to such lien. This applies to equitable liens, and cannot apply to those common-law liens in which possession is necessary. It is, however, true that by statute certain common-law liens can be transferred, e.g. under the Merchant Shipping Act a master of a ship having a lien upon cargo for his freight can transfer the possession of the cargo to a wharfinger, and with it the lien (Merchant Shipping Act 1894, 494). In this case, however, though the matter is simplified by the statute, if the wharfinger was constituted the agent or servant of the shipmaster, his possession would be the possession of the shipmaster, and there would be no real transfer of the lien; therefore the common-law doctrine is not altered, only greater facilities for the furtherance of trade are given by the statute, enabling the wharfinger to act in his own name without reference to his principal, who may be at the other side of the world. So also a lien may be retained, notwithstanding that the property passes out of possession, where it has to be deposited in some special place (such as the Custom-House) to comply with the law. Seamen cannot sell or assign or in any way part with their maritime lien for wages (Merchant Shipping Act 1894, 156), but, nevertheless, with the sanction of the court, a person who pays seamen their wages is entitled to stand in their place and exercise their rights (the Cornelia Henrietta, 1866, L.R. i Ad. & EC. 51).
Waiver. Any parting with the possession of goods is in general a waiver of the lien upon them; for example, when a factor having a lien on the goods of his principal gives them to a carrier to be carried at the expense of his principal, even if undisclosed, he waives his lien, and has no right to stop the goods in transitu to recover it; so also where a coach-builder who has a lien on a carriage for repairs allows the owner from time to time to take it out for use without expressly reserving his lien, he has waived it, nor has he a lien for the standage of the carriage except by express agreement, as mere standage does not give a possessory lien. It has even been held that where a portion of goods sold as a whole for a lump sum has been taken away and paid for proportionately, the conversion has taken place and the lien for the residue of the unpaid purchase-money has gone (Gurr v. Ctithbert, 1843, I2 L.J. Ex. 309). Again, an acceptance of security for a debt is inconsistent with the existence of a lien, as it substitutes the credit of the owner for the material guarantee of the thing itself, and so acts as a waiver of the lien. For the same reason even an agreement to take security is a waiver of the lien, though the security is not, in fact, given (Alliance Bank v. Droon, n L.T. 332).
Sale of Goods under Lien. At common law the lien only gives a right to retain the goods, and ultimately to sell by legal process, against the owner; but in certain cases a right has been given by statute to sell without the intervention of legal process, such as the right of an innkeeper to sell the goods of his customer for his unpaid account (Innkeepers Act 1878, i), the right of a wharfinger to sell goods entrusted to him by a shipowner with a lien upon them for freight, and also for their own charges (Merchant Shipping Act 1894, 497, 498), and of a railway company to sell goods for their charges (Railway Clauses Act 1845, 97). Property affected by an equitable lien or a maritime lien cannot be sold by the holder of the lien without the interposition of the court to enforce an order, or judgment of the court. In Admiralty cases, where a sale is necessary, no bail having been given and the property being under arrest, the sale is usually made by the marshal in London, but may be elsewhere on the parties concerned showing that a better price is likely to be obtained.
AMERICAN LAW. In the United States, speaking very generally, the law relating to liens is that of England, but there are some considerable differences occasioned by three principal causes, (i) Some of the Southern States, notably Louisiana, have never adopted the common law of England. When that state became one of the United States of North America it had (and still preserves) its own system of law. In this respect the law is practically identical with the Code Napoleon, which, again speaking generally, substitutes privileges for liens, i.e. gives certain claims a prior right to others against particular property. These privileges being strictissimae interpretationis, cannot be extended by any principle analogous to the English doctrine of equitable liens. (2) Probably in consequence of the United States and the several states composing it having had a more democratic government than Great Britain, in their earlier years at all events, certain liens have been created by statute in several states in the interest of the working classes which have no parallel in Great Britain, e.g. in some states workmen employed in building a house or a ship have a lien upon the building or structure itself for their unpaid wages. This statutory lien partakes rather of the nature of an equitable than of a common-law lien, as the property is not in the possession of the workman, and it may be doubted whether the right thus conferred is more beneficial to the workman than the priority his wages have in bankruptcy proceedings in England. Some of the states have also practically extended the maritime lien to matters over which it was never contended for in England. (3) By the constitution of the United States the admiralty and inter-state jurisdiction is vested in the federal as distinguished from the state courts, and these federal courts have not been liable to have their jurisdiction curtailed by prohibition from courts of common law, as the court of admiralty had in England up to the time of the Judicature Acts; consequently the maritime lien in the United States extends further than it does in England, even after recent enlargements; it covers claims for necessaries and by material men (see Maritime Lien), as well as collision, salvage, wages, bottomry and damage to cargo.
Difficulties connected with lien occasionally arise in the federal courts in admiralty cases, from a conflict on the subject between the municipal law of the state where the court happens to sit and the admiralty law; but as there is no power to prohibit the federal court, its view of the admiralty law based on the civil law prevails. More serious difficulties arise where a federal court has to try inter-state questions, where the two states have different laws on the subject of lien; one for example, like Louisiana, following the civil law, and the other the common law and equitable practice of Great Britain. The question as to which law is to govern in such a case can hardly be said to be decided. " The question whether equitable liens can exist to be enforced in Louisiana by the federal courts, notwithstanding its restrictive law of privileges, is still an open one " (Derris, Contracts of Pledge, 517; and see Burdon Sugar Refining Co. v. Payne, 167 U.S. 127).
BRITISH COLONIES. In those colonies which before the Canadian federation were known as Upper Canada and the Maritime Provinces of British North America, and in the several Australasian states where the English common law is enforced except as modified by colonial statute, the principles of lien, whether by common law or equitable or maritime, discussed above with reference to England, will prevail; but questions not dissimilar to those treated of in reference to the United States may arise where colonies have come to the crown of Great Britain by cession, and where different systems of municipal law are enforced. For example, in Lower Canada the law of France prior to the Revolution occupies the place of the common law in England, but is generally regulated by a code very similar to the Code Napoleon; in Mauritius and its dependencies the Code Napoleon itself is in force except so far as modified by subsequent ordinances. In South Africa, and to some extent in Ceylon and Guiana, Roman-Dutch law is in 'force; in the island of Trinidad old Spanish law, prior to the introduction of the present civil code of Spain, is the basis of jurisprudence. Each several system of law requires to be studied on the point; but, speaking generally, apart from the possessory lien of workmen and the maritime lien of the vice-admiralty courts, it may be assumed that the rules of the civil law, giving a privilege or priority in certain specified cases rather than a lien as understood in English law, prevail in those colonies where the English law is not in force. (F. W. RA.)
Note - this article incorporates content from Encyclopaedia Britannica, Eleventh Edition, (1910-1911)
