TeachMeFinance.com - explain lien
lien -- Legal right to hold property of another party
or to have it sold or applied in payment of a claim.
-- a legal claim against property that must be satisfied When the
property is sold
Lien -- A legally enforceable hold or claim on the property of another obtained as security for the repayment of indebtedness or an encumbrance on property to enforce payment of an obligation.
lien -- a claim by one person on the property of another person making the property security for the payment of a debt. A mortgage is a lien against a house. If the mortgage is not paid on time, the house can be seized to satisfy the lien.
Lien -- A legal claim or hold on property as security for a debt or a charge. A mortgage is a lien.
historic accounting definition (British)...
Lien -- This is a term which signifies the right of a person to retain possession of the goods of another until some debt or obligation which has been created between the parties has been discharged.
There are three kinds of lien, (a) possessory, (b) maritime, and (c) equitable. In any case lien cannot arise unless the goods over which the same is claimed have come lawfully into the possession of the person who retains them.
A possessory lien may be either particular or general. As to the former it most frequently arises in cases like the following, namely, where goods are delivered to a carrier and the consignee refuses payment. The carrier cannot be compelled to give up the goods until his charges have been paid. Again, an innkeeper is entitled to retain the goods of a guest who comes to his house if the guest refuses to pay his bill. But the most common example is that of a tradesman or a labourer who has had goods confided to his care for the purpose of doing some work upon them and who cannot be compelled to deliver up the goods until he has received the recompense stipulated for.
A general lien is one that arises either from custom or contract. It is the right to retain goods not only in respect of a debt incurred in connection with them, but also in respect of a general balance of account between the owner and the possessor. Common examples of general lien are those of factors, bankers, auctioneers, stockbrokers, wharfingers, and, in some instances, insurance brokers.
A possessory lien, whether particular or general, does not, unless there is some agreement or contract to the contrary, bestow upon the possessor the right of sale. There are, however, certain statutes which have made an exception to this rule, especially in the case of an innkeeper and a wharfinger. The lien is naturally extinguished if there is a surrender of possession to the owner, and there are various other methods in which the right can be brought to an end. Whether the right has or has not been lost is often a question of fact depending upon the special circumstances of the case.
A maritime lien is a peculiar right which attaches to a ship, wherever it may be, in respect of advances made for the prosecution of its voyage or for supplying necessaries. The right is, of course, independent of possession, and if the various charges owing in respect of it are not paid, it is enforceable by arrest and sale, such arrest and sale being made at the instance of the Admiralty Court, if necessary.
Maritime lien also attaches in cases of salvage, bottomry bonds, seamen's wages, and payments for the services of pilots.
An equitable lien is one which is altogether independent of possession, being a right to demand that a particular portion of property shall be dealt with in a particular way for the satisfaction of specific claims.
About the author
Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.