The common law gave certain liens to a creditor independent of contract. Possession by the creditor was requisite. There may be also liens by statute which are of the same nature as common law liens and a mere extension thereof.
(1) In general.
In this division we will consider those liens which a creditor has upon the property of his debtor by the principles of the common law and which do not arise out of any contract, but exist under the general law. Statutes have also given liens of this sort which are in their nature similar to common law liens, and we will consider these liens as they exist under the common law and under the statutes. There are also certain statutory liens independent of contract which we will consider later because they are essentially different from common law liens.
We should notice in the first place that unless a creditor acquires a lien by contract or by some judicial procedure he does not have, as a usual rule, any lien upon his debtor's property. Thus, if A loans money to B, taking no security, he does not by virtue of the loan have any lien on B's property. Or, if A sells goods to B and does not retain the goods until paid or enter into any contract for a lien, he has taken B's general credit and has no lien. Yet there are a few cases where the law for reasons of public policy gives a lien though none has been preserved by contract.
The cases where this is true are considered in the subsequent paragraphs.
(2) Liens of common carriers.
The common law gave a common carrier of goods a lien for his charges. This lien attaches only to the goods shipped under that contract and is lost by delivery of the goods to the consignee.
(3) Liens of warehousemen.
The common law gave a lien upon the goods stored for the proper warehouse charges. This lien extends only to the goods stored under the contract for which the charge is made and is lost by delivery of the goods.
(4) Liens of inn keeper.
An innkeeper, being obliged to receive whoever comes for entertainment, is given a lien by the common law upon the property of the guest for all charges properly made for board and lodging and this lien has been extended in some respects by the statute.
(5) Lien of agister.
An agister is one who pastures cattle. By the common law he had no lien but some statutes give him a lien.
(6) Lien of livery stable keeper.
A livery stable keeper had no lien by the common law unless he cured or trained the animals within his keep, but statutes have given him a lien in some states.
(7) Lien of bailee spending money or services on goods.
An ordinary bailee usually had no lien for his charges but if under his contract he spent money or rendered services he acquired a lien.
(8) Lien of vendor.
One who sells goods upon a general credit has no lien upon them unless he has retained it by contract. He may, of course, take back a mortgage and protect himself by his contract. But if the sale was for cash, he is not obliged to part with the goods until they are paid for and has a lien which he may enforce. He loses this lien by delivery of the goods to the vendee. A vendor has more extensive rights than other lienors. See subject "Sales" in this series.
(9) Lien of landlord.
A landlord did not have any lien upon the goods of his tenant, that is to say, the tenant could sell and dispose of those goods at pleasure until the landlord acquired some lien by judicial proceedings. In most of our states the landlord has no lien, but he may acquire one at any time by a judicial proceeding called distress proceedings.
(10) Common law lien is good against third persons.
Just as a chattel mortgage properly recorded or real estate mortgage and a pledge protect the creditor against all the world (as well as the debtor) so a common law lien enables one to hold the goods not only against the debtor but against all the rest of the world, that is to say against parties who may have purchased the goods or taken a mortgage or secured a judgment. The possession of the goods by the creditor is a notice to the world of the rights which he claims therein.
(11) Loss of lien.
Possession is an essential element in a common law lien; by voluntarily parting with the possession the lien is lost.
(12) Enforcement of lien.
By the common law the lien holder had no right of sale. He might sell if the goods were perishable, but not otherwise unless that was his special contract. But statutes have given right of sale, especially to warehousemen, innkeepers and the like.
(13) Lien is special, not general.
The lien attaches only to the property held under the bailment. It cannot be applied to property subsequently delivered to the bailee unless delivered under the same contract.
A mechanic's lien is a lien, arising independent of contract, by virtue of local statute giving materialmen, laborers and contractors a lien on real estate to whose permanent improvement they have contributed labor or material.
A mechanic's lien is a lien arising independently of contract and is given by the general laws of most of the states to those who furnish material or services for the improvement of real estate. In such a case there is of course no holding of possession by the claimant as is necessary in the case of common law liens which arise independently of contract. This lien arises when the material or services are furnished and is enforceable against the owner for a certain period and also against third persons for a period provided the claim is recorded or the suit started within a certain prescribed time.
While the statute of each state must be strictly construed in reference to the right to claim a mechanic's lien we may say that such laws usually provide for a lien by (1) materialman, and (2) by those who render services; provided the material is furnished and the services rendered for the improvement of real estate. Thus the contractor who builds the house, the lumberman who delivers the lumber, the mason who lays the brick, may all claim their lien.
Those who furnish material or services may be classified into contractors and subcontractors. A subcontractor has a shorter time, usually, in which to claim his mechanic's lien than a general contractor has. The law provides that before a general contractor may claim his lien he shall, if demanded, furnish affidavits as provided by statute, showing who all subcontractors are.
A mechanic's lien has precedence over all mortgages, judgments or other liens arising subsequently provided the steps required by the statute are taken in apt time to perfect the lien.
It will be noticed that a person has a lien up to a certain time good against the world even though there is no public record of his claim for a lien. This is allowed to exist upon the theory that the doing of the work or the supplying of the material is in itself an act constituting notice to third parties in the same way that possession of property is held to constitute notice of the rights of the possessor which is equivalent to notice given by record.
The lien dates as of the time the contract was made.
We have noticed that one may perfect his lien by recording a claim for it, within a certain time. In order to perfect the lien he must file his claim within a certain time or start a suit within that time. Having perfected the lien within the proper time he may then enforce it by suit within a much longer period. Enforcement of the lien is accomplished by a suit which proceeds to trial and in which, if the issues be found in favor of the claimant, a decree is entered for the sale of the land, much in the same manner that land is sold to foreclose a mortgage.
Redemption of the land sold may be made by the owner within the same period that redemption under other judicial sales may be made.