A useful section of Maryland law allows the owner or operator of a stable or other establishment caring for livestock the ability to recover unpaid costs related to that care without the need to file any action in court, by enforcing a lien in that livestock.
What is a lien? A lien is a form of security interest granted over an item of property to secure the payment of a debt or performance of some other obligation. When a horse owner drops a horse off at the stable for care and/or training, without doing anything further or signing any specific contract, he establishes the framework for a livestock lien. This means the stable owner has a lien in the livestock or the right to use the horse to satisfy a debt if left with an unpaid debt arising out of the transaction. This is similar to a mechanic’s lien which gives the mechanic the right to sell your car if you refuse to pay your bill.
Section 16-401 of the Commercial Law Article of the Maryland Code provides if the owner or operator of any stable or similar facility is owed money for boarding, training, veterinary and/or blacksmith services, or other maintenance expenses, and the fees are due and unpaid for 30 days, the owner or operator in possession of the livestock may sell the livestock at a public sale to satisfy the debt. However, before any sale can occur the stable owner must undertake two important steps.
First, the stable owner must send written notice to the owner of the livestock by registered or certified mail at least 30 days before the sale. The written notice must include the intent to sell the livestock at the pre-determined date, place, and time if the debt is not paid in full. Second, the stable owner must publish notice of the public sale once a week for two successive weeks in one or more newspapers of general circulation in the county where the livestock is located. After the stable owner has sent the 30 day notice and properly advertised the public sale, he or she is free to conduct the sale and retain the proceeds to cover the unpaid expenses.
Although the execution of a livestock lien does not require the use of the judicial system, it is highly recommended that the steps for the execution of the lien outlined in the law are followed exactly and proof of the written notice, returned receipt, and advertisement are retained by either the stable owner or his attorney, in case the sale is challenged by the owner of the livestock. The proceeds of the sale must be applied first to the costs associated with the sale and then to the amount of unpaid stable services. If the proceeds of the sale are in excess of what was owed to the stable owner, then the surplus must be paid to the livestock owner. Conversely, if the proceeds of the sale are insufficient to cover the total expenses due the stable owner, he or she may proceed to sue the owner of the livestock for the remaining balance.