FINAL BILL REPORT

SB 5085

                                  C 395 L 87

BYSenators Talmadge, Newhouse, Hansen, Sellar, Vognild and Barr

Revising provisions relating to warehousemen's liens.

Senate Committee on Judiciary

House Committe on Judiciary

SYNOPSIS AS ENACTED

BACKGROUND:

A lien is a claim or charge on property for the payment of a particular debt, obligation or duty. Such a lien is possessory where the creditor is lawfully in possession of the specific property until there is satisfaction of the debt.  Under Washington law, a possessory lien is prior to a perfected security interest only if the lien is statutory and the statute expressly provides for priority.  The warehouseman's lien is statutory but the statute is arguably silent with respect to priority.  Thus, it is likely that the warehouseman's lien is inferior to perfected security interests.

In contrast to Washington's law, the uniform version of the Uniform Commercial Code (UCC) priority scheme grants possessory liens priority over perfected security interests.  The UCC language encourages a business furnishing services or materials to preserve and enhance the property of others because the business recognizes that it is permitted to retain possession of the goods to secure payment for services and materials provided.  It is suggested that the adoption of the UCC language within this state's warehouseman's lien statute would benefit both warehousemen and their customers as well.

SUMMARY:

A warehouseman's lien takes priority over all other liens and perfected or unperfected security interests.

VOTES ON FINAL PASSAGE:

      Senate    46     0

      House 97   1

EFFECTIVE:July 26, 1987