SECTIONS 55631-55653 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 55631-55653

55631. Every producer of any farm product that sells any product
which is grown by him to any processor under contract, express or
implied, in addition to all other rights and remedies which are
provided for by law, has a lien upon such product and upon all
processed or manufactured forms of such farm product for his labor,
care, and expense in growing and harvesting such product. The lien
shall be to the extent of the agreed price, if any, for such product
so sold. If there is no agreed price or a method for determining it
which is agreed upon, the extent of the lien is the value of the farm
product as of the date of the delivery. Any portion of such product
or the processed or manufactured forms of such product, in excess of
the amount necessary to satisfy the total amount owed to producers
under contract, shall be free and clear of such lien.

55631.5. Notwithstanding Section 55461, a nonprofit cooperative
association acting as a producer bargaining association may assert
producer's lien rights for, or on behalf of, its members.

55632. This producer's lien attaches on all of such delivered
product from the date of delivery of such farm product or any portion
of it by a producer to any processor.

55633. The producer's lien is a preferred lien prior in dignity to
all other liens, claims, or encumbrances except the following:
(a) Labor claims for wages and salaries for personal services
which are rendered by any person to any processor in connection with
such processing business after the delivery of any such product for
processing.
(b) The lien of a warehouseman as provided by Division 7
(commencing with Section 7101) of the Uniform Commercial Code.

55634. Every lien which is provided for in this article is on every
farm product and any processed form of the farm product which is in
the possession of the processor without segregation of the product.
For purposes of this chapter, any and all farm products or processed
form of farm products deposited by a processor with a warehouse,
whether or not warehouse receipts are given as security to a lender,
shall be considered as being in the possession of the processor and
subject to the lien.

55635. The lien of a producer, unless sooner released by payment or
by security which is given for the payment as provided in this
article, attaches from the date of delivery of the product, or if
there is a series of deliveries, it attaches from the date of the
last delivery.

55636. If suit is commenced by any such producer to enforce any
lien, such lien shall remain in effect until one of the following
occurs:
(a) The payment of the agreed price or the value of such product.
(b) Deposit of the amount of the lien or claims with the clerk of
the court in which any such action is pending.
(c) The final determination of such court proceeding.

55637. Any lien on any product or processed product may, however,
be released, to the extent the value of the claim upon such product
is secured, by a surety bond or a cash deposit or other security
given as provided in this article. Any producer may also release any
lien which is possessed by him upon payment being made to him for the
agreed or reasonable value of the product which is so sold and
delivered, or upon arrangements being made for such payment which are
satisfactory to the producer.

55638. It is unlawful for any processor to remove, from this state
or beyond his ownership or control, any farm product which is
delivered to him, or any processed form of the farm product, to which
any of the liens provided for in this chapter has attached, except
for any of such product or processed product as may be in excess of a
quantity on hand which is of a value that is sufficient to satisfy
all existing liens. Furthermore, this section shall not prohibit the
sale of any farm product or processed form of the product to which
such a lien has attached, so long as the total proceeds of the sale
are used to satisfy obligations to producers which are secured by a
lien established pursuant to this chapter.

55638.5. The director, within 15 days of the filing of a verified
complaint by a producer, shall investigate any charge that a
purchaser of a farm product to which a lien has attached has removed
any farm product, or any processed form of a farm product, in
violation of Section 55638.

55639. Any processor that desires to secure a release of any or all
of such liens on any product or processed product may do so in any
of the following ways:
(a) By paying the agreed or actual value of any farm product which
is purchased by such processor within 20 days from the date of
delivery of the farm product unless the date of payment is otherwise
agreed upon in writing or such payment is secured other than by lien.
(b) By depositing with the director a surety bond which is
executed by such processor as principal and by a surety company which
is qualified and authorized to do business in this state as surety
in an amount which equals the current market value of the product or
processed product which is intended by such processor to be sold or
otherwise disposed of, as such value may appear by the sworn
statement of such processor in accordance with quotations from the
federal-state market news service or other evidence which is
satisfactory to the director. The bond shall be conditioned that if
the processor fails to pay up to the amount of such bond the lawful
claims of all producers whose liens have been released by the bond,
within 35 days after date of the bond, the surety shall be liable to
and shall pay to the state on behalf of such claimants all such
lawful claims as may be covered by the amount of the bond, together
with costs of suit if an action is filed on the bond.
(c) By depositing with the director a cash sum in lawful money of
the United States which is expressly set apart by an instrument in
writing that is signed by the processor for the purpose of
guaranteeing to the extent of such sum, payment of all existing
claims of producers whose liens are released by the deposit, within
35 days from the date of such deposit. The director shall be named in
such instrument as trustee to carry out the purpose and intent of
the instrument.
(d) By designating, setting apart, and depositing in a public
warehouse a quantity of any processed farm products and indorsing
over to the director and delivering to him the warehouse receipt for
such products for the purpose of guaranteeing to the extent of the
value of such deposit, payment within 35 days from the date of such
deposit, all existing claims of producers and labor claimants whose
liens are released by it.
(e) By securing a release from the director after payment in full
for such farm product.

55640. If all lawful claims of the producers have been paid in
accordance with this article by any processor, any product which is
released by such action may be sold, transported, or otherwise
disposed of.

55641. If a bond, cash deposit, or security is given to the
director by any processor as provided in this article, such processor
may sell, transport, or otherwise dispose of the product or
processed product to the value which is represented by such security
as such value may appear by the sworn statement of such processor in
accordance with quotations from the federal-state market news service
or other evidence satisfactory to the director.

55642. The director may accept such bond, if approved by him, and
such other security. If the claims or any of them are not paid in
accordance with the condition of such security, the director may, on
proof being made to his satisfaction of the amounts which are due
such claimants, pay all such unpaid claims insofar as possible out of
the deposit money, or proceeds from any sale made by him of any
securities or processed products which are given as security.

55643. If a bond has been given as security, the director shall
notify the principal and surety of any default on the part of the
principal under the bond, and make demand for payment on behalf of
such unpaid claimants. If payment is not made, the director may take
any legal action he may deem necessary to enforce payment under such
bond.

55644. If the director has received warehouse receipts for any
processed product as security, and the processor giving them has
failed to pay the claims in accordance with the terms of such
security, the director may sell such security with or without notice,
and in such manner as he shall determine.

55645. All claims in relation to payment shall have equal standing
and payment shall be prorated if necessary among the claimants.

55646. This article does not prevent the director if in his opinion
the rights of all of the claimants are fully protected, as provided
for in this article, from issuing a certificate in the name of the
department and signed by him which releases any specific lot or
quantity of any product or processed product from all liens of the
claimants. No security which is held by the director shall, however,
be released by him to any processor unless and until it is made to
appear to his satisfaction that all claims have been fully paid, or
that the rights of all of the claimants are fully protected.
A fee of five dollars ($5) shall be paid to the director for
issuing any certificate or release which is provided for in this
section.

55647. This article does not impair or affect the right of any
claimant that possesses a lien to maintain a personal action to
recover such debt against a processor, either in an action to
foreclose his lien or in a separate action. He is not required to
state in his affidavit to procure an attachment that his demand is
not secured by a lien.

55648. The judgment, if any, which is obtained by the plaintiff in
such personal action, or personal judgment which is obtained in such
lien action, does not impair or merge any lien right or claim which
is held by such plaintiff. Any money, however, which is collected on
the judgment shall be credited on the amount of such lien or claims
in any action which is brought to enforce the lien or in any action
which is filed pursuant to this article by the director.

55649. In an action that is filed by any such lien claimant, the
defendant processor may file with the court in which the action is
pending a surety bond in an amount that is sufficient to cover the
demand of plaintiff's complaint, including the costs, whereupon the
court may order the release of a portion or the whole of any product
or processed product upon which the lien of plaintiff has attached.

55650. Such processor may also, on motion duly noticed, introduce
evidence to the court before whom any such action is pending to the
effect that he has sufficient security or money on deposit with the
director to protect the lien or other rights of plaintiff. If he does
so, the court may order the release of a portion or the whole of
such product upon which the lien of plaintiff is attached, and deny
to plaintiff any recovery in such action. Such action by the court
does not, however, prejudice any other rights or remedies which are
possessed by the plaintiff.

55651. The plaintiff in an action which is brought to foreclose any
of the liens which are provided for in this article may, in a proper
case, and upon proper allegations, secure an injunction against the
processor in accordance with the provisions of Chapter 3 (commencing
with Section 525), Title 7, Part 2 of the Code of Civil Procedure to
restrain the doing of any acts on the part of such processor which
are designed to or which would, in effect, remove any processed
product in his possession or under his control and upon which valid
liens exist, beyond the process of the court, to plaintiff's injury.

55652. If in a court proceeding to foreclose such lien, it is found
and determined by the court that there is no cash, bond, or other
deposit placed with the director as security for the payment of any
of the lien claims as set out in the complaint, the judgment of
foreclosure shall be against a sufficient quantity in value of such
farm product or processed product in the possession or under the
control of the defendant processor, as may be necessary to satisfy
such claim or render judgment and declare forfeited any bond which is
deposited in the court by such processor to secure the lawful claims
of the plaintiff as determined by the court.

55653. All actions filed by the director or producers against any
processor for the foreclosure of the liens or other security which
are provided for in this article may be consolidated by the court and
all persons that are necessary to a determination of such action may
be made parties to such actions. Any judgment which is rendered
shall determine the lawfulness of the amount of each claim as
represented by the pleadings.