## Facts

- Terrance Heaton owned two farm disc harrows and left them in disrepair on leased land.
- After Heaton’s bankruptcy, the Farmers Home Administration (FmHA) acquired legal title and possession under a security agreement but left the discs on the leased land.
- The lessor allowed neighbor William Gray to take possession of the discs.
- Gray arranged for Jed Maggert to repair the discs; Maggert performed $857 in repairs and was not paid.
- The repairs substantially increased the value of the discs beyond the cost of repair.
- Martin and Lylia Timmer later purchased the discs from FmHA for $75 without inspecting them; neither the Timmers nor FmHA had actual knowledge of Maggert’s work at the time of sale.
- Around the time of sale, Gray possessed one repaired disc and Maggert retained possession of the other.
- The Timmers sued for replevin and conversion to obtain possession; Maggert counterclaimed for the repair costs.
- The trial court declared the Timmers the rightful owners but imposed an equitable lien in Maggert’s favor to secure the unpaid repairs and prevent unjust enrichment.

## Issues

1. Whether the trial court erred by imposing an equitable lien on the discs in favor of the unpaid repairman.
2. Whether the purchasers qualified as bona fide purchasers for value without notice so as to take the property free of an equitable lien.
3. Whether unjust enrichment justified burdening the purchasers’ title with an equitable lien for the value of repairs.

## Decision

- The court affirmed the judgment imposing an equitable lien in favor of Maggert.
- The Timmers’ legal title was upheld, but it remained subject to Maggert’s lien for the unpaid repair amount.
- The court concluded the Timmers were not bona fide purchasers for value without notice because the price was nominal and an inspection would have revealed substantial improvements.

## Legal Principles

- Equity may impose an equitable lien to prevent unjust enrichment where one party’s unpaid labor or materials increase the value of another’s property.
- An equitable lien may be enforced against a later acquirer of the property unless the acquirer is a bona fide purchaser for value without notice.
- A purchaser who pays a nominal price and fails to make an ordinary inspection can be charged with inquiry notice of facts that would have been revealed, defeating bona fide purchaser status.
- Legal title can be recognized while also being burdened by an equitable lien to secure repayment for value conferred on the property.

## Conclusion

The court held that an unpaid repairman could enforce an equitable lien against farm equipment sold to later purchasers who paid a nominal price and failed to inspect, because allowing the purchasers to retain the enhanced value without payment would result in unjust enrichment.


Timmer v. Gray, 395 N.W.2d 477 (Minn. Ct. App. 1986)