By Alexander Barthet

An equipment repair shop went about fixing a backhoe brought in for service. After completing its work, the shop returned the equipment to its owners along with a bill for repairs. When, in a few months the shop didn’t get paid, it placed a repairman’s lien on the backhoe – recording notice of the monies it was owed. Suit was eventually filed to foreclose the lien; an open and shut case thought the repair shop. But in what should be a wakeup call for all those whose business practice has been to release items before getting paid, the court denied the lien enforcement action.

Possession Counts

Such claims for labor or services on personal property – such as a backhoe – are possessory in nature. The court therefore found that the repair shop’s right to claim a lien was extinguished when it relinquished possession of the property it repaired. The shop needed to hold on to that backhoe until it got paid, at least if it expected to protect its lien rights.

Possession being 9/10’s of the law couldn’t be more true here.