Equitable Lien Cases In New Jersey

Equitable liens are based on the equitable maxim that equity "regards as done that which has been agreed to be, and ought to have been, done." Rutherford Nat'l Bank v. H.R. Bogle Co., 114 N.J. Eq. 571, 573-74, 169 A. 180 (Ch.1933). The Supreme Court has explained that equitable liens can be created by express executory contracts that relate to specific property then existing or to property later acquired. In re Hoffman, 63 N.J. 69, 77, 304 A.2d 721 (1973). This lien is "a right of a special nature in a fund and constitutes a charge or encumbrance upon the fund." Ibid. Thus, "where one promises to pay for services rendered out of a fund created in whole or in part by the efforts of the promisee, a lien in favor of the promisee will attach to the fund when it comes into existence." Ibid. The intent of the parties controls the creation of an equitable lien. VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 547, 641 A.2d 519 (1994). The actual form in which the parties agree to create an equitable lien, however, is immaterial. Rutherford, supra, 114 N.J. Eq. at 574, 167 a 180.