An employee from Hamid's Automobile Inc. called up Horner's home to repair the latter's car. It was repaired in Horner's garage. When Horner defaulted on the bill, Hamid's employee went to his house to take possession of the car, claiming that the corporation had a lien on the car by virtue of the work performed on it. According to this scenario, which of the following statements is true?
A) The employee is entitled to the possession of the car because he was the one who performed the repairs on the car.
B) Hamid's employee is justified in his actions as the corporation did have a lien on the car by virtue of the work performed on it by its employee.
C) The corporation has no lien on the car because the employee did not notify Horner at the time of the repairs that a lien would be claimed.
D) The corporation has no lien on the car, because its employee came to Horner's house to make the repairs and so Horner never gave up possession of his car to Hamid's.

Question

Quizplus · Accepted Answer

Possessory liens give lienholders the right to keep possession of the debtor's property until the reasonable charges for the service have been paid. For the lien to come into play, possession of the goods must have been entrusted to the lienholder. If the lienholder comes to the debtor's home to make the repair, he would not have a lien on the goods because debtor did not give up possession of it. By virtue of this rule, Hamid's did not have a lien on Horner's car.

An Employee from Hamid's Automobile Inc