Lien (Fr. lier, to tie or bind), in its broader sense, every hold upon or right to property to secure the payment of a debt, or the discharge of an obligation. In this sense it includes mortgages, pledges, bottomries, and respondentia. All of these are liens created by contract; but in a narrower and more specific sense, it has been well defined as "a right in one man to retain that which is in his possession belonging to another till certain demands of the person in possession are satisfied." (Hammond v. Barclay, 2 East, 227.) Liens of this kind are seldom created by contract, but arise almost always by the operation of law upon the relation between the parties. The most common of these are the liens of a carrier, an innkeeper, a factor, and a salvor. In addition to these, which are treated under their own titles, it may be said that modern law tends strongly to give this security to every bailee, or person to whom property is delivered, who receives the property for the purpose of improving its condition or adding to its value by putting his labor into the materials supplied him; as a tailor, who by this rule would have a lien on the cloths delivered him to make up into garments, for his wages or compensation for so doing; a watchmaker, employed to clean or repair a watch; a bookbinder on books bound by him; dyers on goods sent to them to be dyed, etc.
It is by an extension of the same principle that an attorney has a lien on the papers in his hands, and on any judgment or money he may receive, for his demands against his client. For a similar reason, a banker has a general lien on the paper securities in his hands to cover his claims; and so has an insurance broker, and if the assured transferred his interest in the policy, the transferee would take it subject to the broker's lien. In all these cases it will be observed that the lien is nothing-more than a right to retain possession of the property. This principle is important because it makes possession absolutely essential to the lien, and therefore the lien is lost if the creditor give up the possession; for the creditor is then supposed to waive and renounce the security he has upon the thing itself, and to trust only to his personal demand against the debtor. For an analogous reason, it is a general rule, that if one who has a lien to secure a debt receives from the debtor other and adequate security for the debt, he thereby waives and loses his lien on the goods; and if the creditor who thus loses his lien by giving up the possession, afterward comes into possession anew, he does not hold the goods by his former lien for security. - In general liens are enforced in courts of equity.
Upon petition, they will decree a sale of the property to pay the debt, or take such other order as the case may require. It used to be thought that this was the only way in which the holder of property by lien could avail of it. Now, however, it seems certain, in some cases of lien, and probably in all, that a creditor may himself sell the property and pay the debt to himself, holding the balance of proceeds, if any, for the debtor; provided that in all the circumstances of the sale, the notice given to the debtor, the time, place, and manner of the sale (which should, generally at least, be by public auction), he consults, in all fairness and with reasonable discretion, the rights and interests of the debtor. In some cases there may be a kind of foreclosure; in some the creditor may have a writ of scire facias against the debtor; in others there are precise provisions of law applicable to the case (as in mechanics' liens); and in all the fair agreement of the parties will determine their rights and obligations. There may be adverse liens on the same thing, and then the question arises as to which shall prevail; and when that which prevails is satisfied, the other comes into effect.
Thus a carrier of goods from a seller to a buyer may be notified to retain them for the seller, for payment of his price; but the carrier has himself a lien for the price of carrying them. He will therefore hold the goods for his own demand; but when that price is paid to him, or if he recovers it in any way, his hen is discharged, and his possession is now the possession of the seller, who has a lien for the price. (See Sale, and Stoppage in Transitu.) - Another exceedingly important lien is that upon the land of the debtor, created in favor of a creditor by a judgment or final decree of a court of law. The law and practice on this subject are singularly different in different states. Thus, in the New England states and some others, a judgment is no lien whatever, nor is execution until it be levied. But in those states land may be attached on mesne process, and this attachment, when returned and recorded as the law requires, is a valid lien. In New York and a number of others every judgment and final decree are a lien on the real estate of the debtor, from the docketing of the judgment. - Another very important lien is the equitable lien of a seller of real estate for the unpaid balance of his price.
This also is derived from England, and is unknown in some of our states, and exists with much variety in those in which it is recognized. In general it may be said that the vendor will have a lien on the land sold by him for any unpaid portion of the purchase price, provided he has taken no security for the same, and there is nothing in the contract of sale to negative the existence of the lien. The purchaser's own note or obligation to pay is not considered as security. - Still another lien of great importance is that of mechanics on the houses and ships they build or repair. It is of recent introduction, and depends almost wholly upon statutory provisions; and these differ so much as to leave but little resemblance between them, except on the main point. They all agree in giving to the mechanic a hold on the ship or house as his security for his work upon it, and sometimes for materials supplied. To prevent this lien from operating injuriously upon owners or purchasers ignorant of it, the various statutes require public notice by record in some form, usually with the town or city clerk where the property is situated, or some similar officer whose records are easily accessible.
In most, and perhaps all of the states where this lien is known, it remains in force but a short time, usually two or three months, unless an action is brought to enforce it. (For shipping and maritime liens, see Shipping.)