Lien - Definition - Law Dictionary Home Dictionary Definition lien

Definition :

Lien [answering to the tacita hypotheca of the Civil Law], a right in one man to retain that which is in his possession belonging to another, until certain demands of the person in possession are satisfied. It is neither a jus in re, nor a jus ad rem--i.e., it is not a right of property in the thing itself, or right of action to the thing itself.

It is either particular, as a right to retain a thing for some charge or claim growing out of, or connected with, the identical thing; or general, as a right to retain a thing not only for such charges or claims, but also for a general balance of accounts between the parties in respect to other dealings of the like nature.

General and particular liens may arise: (1) by an express contract; (2) by an implied contract, resulting from the usage of trade, or the manner of dealing between parties. General lines are not favoured in law, but some judicially recognized general lines are bankers', solicitors', factors', stockbrokers'. See Halsb. L.E., title 'Lien.' Particular lines, on the other hand, are favoured by law and also arise by mere operation of law from the relation and acts of the parties, e.g., where the person claiming the lien was obliged by law to enter into the contract for service, e.g., common carriers, innkeepers, and a shipmaster's lien for freight.

The Civil Law derived its own lines, whether they were pledges or hypothecations, or simple privileges, from similar sources.

The following is an analysis of the mode in which the law on this subject has been treated.

(1) As to the manner and circumstances under which a lien may be acquired. To create a valid lien it is essential that the person through whom it is acquired should himself either have the absolute ownership of the property, or at least a right to vest it; for nemo plus juris ad alium transferre potest, quam ipse habet. There must also be an actual or constructive possession by the party asserting it, with the express or implied asset of the party against whom it is asserted. It must not be inconsistent with the express terms or the clear intent of the contract.

(2) The debts or claims to which a lien properly attaches. It attaches only to certain and liquidated demands, and not to those which sound only in damages, and can be ascertained only through the intervention of a jury, unless, indeed, a special contract exists. The debt or demand for which the lien is asserted must be due to the person claiming it in his own right, and not merely as agent. It must also, in the absence of a special agreement, be a debt or demand due from the person for whose benefit the party is acting, and not from a third person, although the goods may be claimed through him.

(3) How a lien may be waived or lost. It may be waived by an act or agreement between the parties, by which it is surrendered, or becomes inapplicable. It is said [see Hartley v. Hitchcock, (1816) Stark 408; 18 RR 790] that a lien is lost by temporarily relinquishing possession, but see Great Eastern Railway v. Lord's Trustee, 1909 AC 109.

A lien on goods is not lost when the demand in respect of which it was acquired can no longer be enforced by an action, on account of the Statute of Limitations, for the statute does not put an end to the debt but only to the remedy by action.

(4) In what manner a lien may be enforced. There is but a mere right of retainer, which may be used as a defence to an action for the recovery of the property, or as a matter of title or special property, to reclaim the property, by action, if he have been unlawfully dispossessed of it. A lien does not import a right of sale. Sometimes a Court of Equity has decreed a sale as a part of its own system of remedial justice; and Courts of Admiralty have been constantly in the habit of decreeing a sale to satisfy maritime lines--such as bottomry-bonds, seamen's wages, repairs of foreign ships, salvage, and other claims of a kindred nature (see MARITIME LIEN), and exceptions occur under statute, e.g., the (English) Innkeepers Act, 1878 (41 & 42 Vict. c. 38), the (English) Railways Clauses Consolidation Act, 1845 (8 & 9 Vict. c. 20). The owner has a perfect right to dispose of the property, subject to the lien, and the person to whom he conveys it will have a perfect title to it upon discharging the lien. Consult Smith's Merc. Law; Coote on Mortgages, 9th Edn., pp. 1375 et seq. And 1396et seq.; Atkinson on Sol. Lien.

(5) By s. 41 of the (English) Sale of Goods Act, 1893 (56 & 57 Vict. c. 71), the unpaid seller of goods in possession of them may, subject to the provisions of that Act, retain possession of them until payment or tender of the price: (a) where the goods have been sold without any stipulation as to credit; (b) where the goods have been sold on credit, but the term of credit has expired; (c) where the buyer has become 'insolvent'--i.e., by s. 62(3) of the Act if he has ceased to pay his debts or cannot pay them, whether he has committed an act of bankruptcy or not. Sale of Goods Act, 1893 (56 & 57, Vict. 71).

Equitable liens are not necessarily possessory, they are charges arising by implication of equity on the property in the hands of any one who holds it with notice subject to any formalities which may be required by law such as registration (see LAND CHARGES; NOTICE). Such charges may be enforced by sale under order of the Court, and in cases where the lien is not possessory, may be defeated like other charges under the Statute of Limitations, from which possessory liens are exempt. Instances of equitable liens are vendor's lien (q.v.); partner's lien on partnership assets; trustee's lien for costs, charges and expenses; and other instances, where equity allows a lien. As to maritime lien, see the Kong Magnus, 1891, P. 223, and that title.

By the (English) Judicature Act, 1925, s. 56 (1) (b), causes for the sale and distribution of the proceeds of any property, subject to lien, are assigned to the Chancery Division of the High Court.

In the Scottish law, the doctrine of lien is known by the name of retention, and that of set-off by the name of compensation.

The word 'lien' originally means 'binding' from the Latin ligamen. Its lexical meaning is 'right to retain'. The word 'lien' is now variously described and used under different contexts such as 'contractual lien', 'equitable lien', 'specific lien', 'general lien', 'partners lien', etc. 'A person can be said to acquire a lien on a post only when he has been confirmed and made permanent on that post and not earlier', Triveni Shankar Saxena v. State of Uttar Pradesh, AIR 1992 SC 496 (500): (1992) Supp 1 SCC 524.

There is no such thing as a lien on a service as such. A lien is always on a post so that by saying that the employee had a lien in the Secretariat it can in no way be implied that he had a general lien entitling him to such promotions as he would have got had he remained in the Secretariat, K. Ananthan Pillai v. State of Kerala, AIR 1968 Ker 234.

Lien just connotes the right of a civil servant to hold the post substantively to which he is appointed. Generally when a person with a lien against a post is appointed substantively to another post, he acquires a lien against the latter post. Then the lien against his previous post automatically disappears. The principle being that no Government servant can have simultaneously two liens against two posts in two different cadres, Ramlal Khurana v. State of Punjab, (1989) 4 SCC 99: AIR 1989 SC 1985 (1987). [Constitution of India, Art. 309]