Request By:
Honorable James N. Scudder
Hardin County Attorney
Courthouse
Elizabethtown, Kentucky 42701
Opinion
Opinion By: Robert F. Stephens, Attorney General; By: Charles W. Runyan, Assistant Deputy Attorney General
A large proportion of Fort Knox motor vehicles are transferred and registered in Hardin County. Fort Knox personnel are often transferred, and many of the checks made to the clerk for his services are returned unpaid. See KRS 186.040 and 186.050. KRS 186.230(8) reads:
"The county clerk shall see that KRS 186.005 to 186.260 in his county are enforced. In so doing, he shall:
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"(8) Any county clerk, who in collecting the taxes and fees due the state or county clerk, accepts in payment thereof a check which is not honored upon presentment, shall have a lien on the vehicle for the amount of such check. This lien shall be subordinate to any prior perfected lien, either contractual or statutory."
In the light of the facts given, your question is: May the clerk having such lien enforce it by notifying the owner of the affected vehicle and then directing a peace officer to effect peaceful possession for the purpose of sale to satisfy the lien?
"A lien is a charge upon property for the payment or discharge of a debt." United States v. Phillips (U.S.C.A. - 5, 1959), 267 F.2d 374, 376. Here KRS 186.230(8) clearly establishes the lien. However, the statute is silent as to enforcement procedure. The enforcement of a lien by way of sale of the chattel depends upon specific or express statutory provisions. 51 Am.Jur.2d, Liens, § 38, p. 177, § 64, p. 192, and § 65, p. 193. Generally liens are enforceable only in court proceedings brought for that purpose. Ibid., § 63, p. 192, § 67, and § 68, p. 196; and 53 C.J.S., Liens, § 18, p.p. 868-869. In 53 C.J.S., Liens, § 21, it is written that "where, however, a statute creating a lien provides no method for its enforcement, it may be enforced by an ordinary action at law for the collection of the debt."
In modern times a "foreclosure" is an equitable proceeding whereby a lien is enforced and property is sold through the court proceeding to satisfy the debt. Although "foreclosures" were nominally abolished [see § 375, Old Civil Code], a foreclosure in Kentucky has been characterized as "the institution of a suit to enforce a lien against property." Insurance Co. of North America v. Cheathem, 221 Ky. 668, 299 S.W. 545 (1927) 547.
Judge Hill, for the court, held in Brunner v. Home For Aged of Little Sisters of Poor, Ky., 429 S.W.2d 381 (1968) 382, 383, wrote, concerning a statutory lien,:
"A lien is not a title to property, but rather a charge upon it. It is a right which the law gives to have a debt satisfied out of the property. It necessarily supposes the title to be in some other person." (Emphasis added).
Our answer to your question is that there are no statutory provisions for a clerk to effect a private possession and nonjudicial sale of the affected vehicle. Thus the selfhelp cases involving peaceful repossession and nonjudicial sale have no application. See OAG 74-865, copy enclosed, dealing with nonjudicial sale statutes and the due process implications as treated in cases before the Supreme Court of the United States.
We conclude, based upon the above authorities, that the clerk, where the check bounces, can either sue: (1) By way of ordinary action to collect the debt; or (2) By way of an equitable type action in circuit court to have the debt satisfied out of the vehicle to which the lien applies. The lien could only be binding on those affected persons having actual notice of the lien, since the statute contains no provisions for recording the lien as such.
As a practical matter these possible remedies appear to be impractical when measuring the debt involved against the bringing of suit. 1 Actually, the Clerks' Association might consider going to the legislature with a bill providing for a nonjudicial sale of the vehicle effected only after a judicial hearing is afforded. See Fuentes v. Shevin, 407 U.S. 67, 92 S. Ct. 1983, 32 L. Ed. 2d 556 (1972); and Cockrel v. Caldwell (U.S. Dist. Ct. W.D. Ky., 1974) 378 F.Supp. 491. The bill should include provisions for recording the lien so as to give constructive notice.
Footnotes
Footnotes
1 Clerks might consider possible criminal prosecutions under KRS 514.040.