Lien- a charge, hold, claim or encumbrance upon the property of another as security for
some debt or charges, not a title to property but rather a charge on it; connotes the right
which the law gives to have a debt satisfied out of the property.
Facts: P entered into a conditional sales contract with Duncan for the purchase of a van
with a lien in favor of P. Duncan had the van towed to D’s shop to dismantle the van and
make an estimate, but neither Duncan nor the bank gave D authority to repair or store the
van. Duncan later disappeared. D tried but was unable to get in touch with Duncan over
his wishes for the van. D then contacted a Title Service to perform a search for title.
They found a sales agreement that did not reveal the lien, it was then found that there
were no liens and that the van was not stolen. D then determined it had been abandoned
and applied for bonded title. D then proceeded to build the vehicle. Then the lien was
found in favor of the bank and the bank sought replevin for the van. Trial court awarded
the van to the bank but 3k in unjust enrichment damages to D.
Holding: Without discussion, the court approved the appellate court’s opinion that the
mechanic had no security interest in the van. The court reversed the appellate court’s
opinion that the mechanic was not entitled to restitution and remanded the case to the trial
court with directions to determine if the parts could be removed without injury. If so, the
value of the removable parts were to be determined for purposes of restitution
Rationale:
– Restatement reads that a person who under the mistaken belief that he or a third
person is the owner or adds value to a chattel of another is not thereby entitled to
restitution from the owner for the value of his services or the increased value
given to the chattel; but if the owner brings an action for their conversion the
added value or value of the services, whichever is least, is deducted from the
damages. In the absence of contrary state law, the Restatement will be followed.
– The Restatement does not necessarily preclude recovery of the parts or value of
parts installed in the van. The language is purposely like this because it does not
necessarily encompass detachable parts put into the chattel that could be removed
without damage to the chattel.
– Reviewing the relevant case law, the court rejected the rationale relating to the
“usefulness” of the vehicle without the parts, and approved the majority view that
accession did not apply where the parts were removable without damaging the
vehicle. In so holding, the court concluded that (1) as the mechanic never gave
title of the installed parts to the bank or the prior owner, the parts were not
controlled by the bank’s after-acquired accessory clause; and (2) ownership of the
detachable parts passed to the owner only if they were not removable without
damaging the vehicle
If the person who added the value ends up with possession, the original owner is entitled
to the value of the property before it was altered
If the person who added the labor does not end up with possession, no compensation is
awarded