Lien

Lien (pronounced leen or lee-uhn)

(1) In law, the legal claim of one person upon the property of another person to secure the payment of a debt or satisfaction of an obligation; a right to retain possession of another's property pending discharge of a debt.

(2) In anatomy, a tendon (obsolete).

(3) An alternative form of lain (archaic, used in early translations of the Bible).

1525–1535: An Anglo-French borrowing from the Old French from the Latin ligāmen (bond; tie; bandage) from ligāre (to bind) and ligō (tie, bind), the construct being ligā(re) (to tie) + -men (the Latin noun suffix).  The Latin liēn (spleen) was borrowed by late medieval anatomists as a descriptor of tendons but is long obsolete.  The associated words used in this context include claim, charge, right, encumbrance, mortgage, incumbrance and hypothecation but not all translate literally (or by implication) between legal systems or jurisdictions.  Lien is a noun & verb and lienal & lienable are adjectives; the noun plural is liens.  Lien’s use as an alternative form of lain is a historic relic, now best-known from its use (with variation in spelling) in the King James Version of the Bible (KJV, 1611):

And Abimelech said, What is this thou hast done vnto vs? one of the people might lightly haue lien with thy wife, and thou shouldest haue brought guiltinesse vpon vs.  (Genesis 26:10)

And the Priest shall charge her by an othe, and say vnto the woman, If no man haue lyen with thee, and if thou hast not gone aside to vncleannesse with another in stead of thy husband, be thou free from this bitter water that causeth the curse.  (Numbers 5:19)

The lien at common law, equity and admiralty law

At common law, a lien was a right to retain property in one’s possession until payment was made.  That basic right has in many jurisdictions since been modified but the principle remains of a security interest granted over physical property to secure the payment of a debt or discharge of some other obligation.  Historically, the owner of the property (grantee of the lien) was the lienee and the lien holder the lienor but, in modern use, these terms are less used.  An equitable lien differs from a common law lien in that the former depended on actual possession of physical property and conferred a right to retain the good(s) until payment, whereas an equitable lien existed regardless of the state of possession, conferring on the holder the right to seek judicial redress in the absence of payment.  Legal scholars have long treated equitable liens as a strange collective of property rights, considering them generally as sui generis (special; different; literally “of its own kind or class”.)

Equitable liens came to be created for same reason that much equity law developed: application of the rigid rules of common law, in certain situations, could give rise to injustice.  A common-law lien (1) confers only a right to retain physical property, (2) cannot be transferred, (3) cannot be asserted by third parties to whom possession of the property has been extended to pay or undertake whatever the original party should have performed and (4), if the property is handed to the lienor, the lien is for all time sundered.  In Hewett v Court (1983) 149 CLR 639, the High Court of Australia (HCA) defined the essential characteristics of an equitable lien.  It (1) arises by operation of law so as to do justice between parties by adjusting their mutual rights and interests, (2) is not contingent on any contractual right or interest, or by reason of possession of the property, (3) becomes apparent from the relationship between the parties, (4) constitutes an equitable charge over the property and (5), creates a right to obtain an order for payment.

The quirkiest flavor is the maritime lien (sometimes known as tacit hypothecation), a peculiarity of admiralty law.  It is a lien over a vessel, granted to secure the claim of a creditor who provided maritime services to the vessel or who suffered an injury from the vessel's use.  Something of an aquatic hybrid, it creates upon ships, security interests of a nature otherwise unknown to common law or equity, something explained by ships being (1) big, (2) expensive and (3) able to move from one jurisdiction to another.  The concept of a maritime lien is similar to that which can be imposed on any other real property in that it allows for a vessel to be seized if the relevant debt remains unpaid at the effective date.  So, were the purchaser of a vessel to fail to pay (or cease making payments as required by the contract of sale), the vessel may be seized by the authorities and depending on the jurisdiction, there can be other mechanisms such as is often the case in the US where if the contract of sale wasn’t executed using the device of a PSM (preferred ship mortgage), the lien can be granted without consent (ie it’s invoked automatically).

It can be arrested.

As a general principle, a maritime lien can be placed on any vessel still “in navigation”. Quite when a vessel can be considered “in navigation” or not is usually uncontroversial but courts have had sometimes been required to rule on the matter, often in personal injury cases.  The simple explanation is that a vessel is regarded as “in navigation” if it’s fit to operate; that means it could (physically and legally) be used on the waters as intended, not that it’s necessarily “being navigated” on a waterway”.  A vessel undergoing minor repairs would in many circumstances be judged capable of operating (even if it’s been static for some time) whereas one only partially constructed or undergoing a large-scale overhaul would not.  Counterintuitively, a vessel in a shipyard’s dry dock (ie not even “in the water”) can be held to be “in navigation” if found to be still “fit to sail”, the courts deciding each case on its merits, considering factors such as the duration, cost and nature of maintenance being performed and whether the vessel’s master or owner had taken any steps consistent with the vessel’s status being “out of service”.

It can also be arrested.

However, a maritime lien taken against a PSM must be recorded and in that it’s a unique type and in most jurisdictions the filing is with a central repository such as a maritime registry or its associated documentation centre.  Once registered in the correct form, the lien becomes valid and enforceable.  All other maritime liens come as a result of actions pursuant to contracts or in tort and these can cover just about anything transactional (unpaid freight or harbor charges, damages caused by the vessel (pollution, collisions with other vessels or shore facilities, loading or unloading events et al), unpaid wages, breach of charter, personal injury et al.  What makes a lien under admiralty law very different is in the mechanism of enforcement which can involve a court issuing an arrest warrant for the vessel, enabling seizure by the authorities.  This differs from a lien taken over a skyscraper which can be subject to many things if a lien is enforced but not arrest.  The reason for the difference is a skyscraper can’t sail out of a jurisdiction and the act of arrest is thus redundant.  In the same way a corporation can, as a “legal fiction” be thought a “person”, so can a ship be “arrested”.  Like a lien upon landed structures, in legal theory size doesn’t matter and a court can order the arrest of the smallest dinghy but the orders are usually made against vessels of high-value.