35-01 General Provisions - North Dakota Statutes

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TITLE 35LIENSCHAPTER 35-01GENERAL PROVISIONS35-01-01. Scope of statutes relating to liens. The general statutes relating to liensapply to all liens, including mortgages and pledges, unless from the context relating to any of
them a different intention appears, and except as modified by the provisions of chapter 41-09.35-01-02. Definition of lien. A lien is a charge imposed upon specific property by whichit is made security for the performance of an act.35-01-03. Classification of liens - General - Special - Definition. Liens are eithergeneral or special:1.A general lien is one which the holder thereof is entitled to enforce as a security for
the performance of all the obligations, or all of a particular class of obligations, which
exist in the holder's favor against the owner of the property.2.A special lien is one which the holder thereof can enforce only as a security for the
performance of a particular act or obligation and of the obligations that may be
incidental thereto.35-01-04.Creation of lien by contract or by operation of law - Specialcircumstances and exception. A lien or security interest is created by contract or by operation
of law. No lien arises by operation of law until the time at which the act secured by the lien is to
be performed. A security interest in personal property is governed by chapter 41-09, except that
a bill of sale or security agreement, that is not a purchase money security interest, with respect to
household goods, effects, furniture of married persons, or personal property exempt from
execution is void unless the instrument by which it is transferred or encumbered is jointly
executed by the husband and wife, if both are living. This section does not apply to transfers or
liens arising by operation of law nor to security agreements relating to threshed grains made with
any lending agency authorized to make commodity credit corporation loans on threshed grains.35-01-05. Lien on future interest - When lien attaches. An agreement may be madeto create a lien upon property not yet in existence or not yet acquired by the party agreeing to
give the lien. In such case, the lien agreed upon attaches from the time when the party agreeing
to give it acquires an interest in the things and to the extent of such interest.35-01-05.1. When security interest in vehicle valid.1.No security interest, including a security interest under chapter 41-09, in a vehicle,
including a manufactured home, which is not inventory held for sale is valid as
against subsequent purchasers and encumbrances of the property in good faith and
for value unless the security interest is clearly indicated upon the certificate of title to
the vehicle or unless such certificate of title is in the possession of the secured party,
provided, however, that a purchase money security interest under chapter 41-09 in a
manufactured home is perfected against the rights of judicial lien creditors and
execution creditors on and after the date the purchase money security interest
attaches, and provided further the holder of a security interest in or a lien on a
manufactured home may deliver lien release documents to a person to facilitate
conveying or encumbering the manufactured home. A person receiving documents
so delivered holds the documents in trust for the security interest holder or the
lienholder.2.Except as otherwise provided in section 47-10-27 and in subsections 1 and 2 of
section 39-05-35, after a certificate of title has been issued for a manufactured homePage No. 1and as long as the manufactured home is subject to a security interest perfected
under this section, the department may not file an affidavit of affixation, cancel the
manufacturer's certificate of origin, or revoke the certificate of title, and the validity
and priority of a security interest perfected under this section continues,
notwithstanding any other provision of law.3.The term "manufactured home" as used in subsections 1 and 2 is a manufactured
home as defined in section 41-09-02, excluding a manufactured home with respect
to which the requirements of subsections 1 through 3 of section 39-05-35, as
applicable, have been satisfied.4.The term "vehicle" as used in this section includes any vehicle for which a certificate
of title is required under title 39 or other statutes of this state.5.With respect to a manufactured home that is or will be permanently affixed to real
property, upon recordation of an affidavit of affixation under section 47-10-27 and
satisfaction of the requirements of subsections 1 through 3 of section 39-05-35, as
applicable, a perfection or termination of a security interest with respect to the
permanently affixed property is governed by chapter 47-10.35-01-05.2. Priority of liens securing future advances. A lien document relating to areal estate transaction and containing a written provision securing the repayment of future
advances, whether or not the lien creditor is obligated to make such future advances, has priority
over all subsequent encumbrances to the extent of all sums advanced, with interest thereon, with
the same effect as if the entire sum had been advanced at the time of the creation of the lien.35-01-06. Obligations not in existence. A lien may be created by contract to takeimmediate effect as security for the performance of obligations not then in existence.35-01-07. Holder of special lien may acquire and enforce prior lien. When the holderof a special lien is compelled to satisfy a prior lien for the holder's own protection, the holder may
enforce payment of the amount so paid by the holder as a part of the claim for which the holder's
own lien exists.35-01-08. Lien transfers no title. Notwithstanding an agreement to the contrary, a lienor a contract for a lien transfers no title to the property subject to the lien.35-01-09. Recorder to file and index lien. The recorder shall file and index a statutorylien upon personal property required by law to be filed in the recorder's office, designating the
person filing the lien as lien creditor and the person against whom the lien is filed as debtor.35-01-09.1. Last-known address required for valid lien statement. Notwithstandingany other provision of law concerning the filing of lien statements, the lien statement filed against
an individual must contain the last-known address of the debtor in order to be valid.35-01-10.Contracts for forfeiting property subject to lien void - Waiver ofredemption void. All contracts for the forfeiture of property subject to a lien in satisfaction of the
obligation secured thereby and all contracts in restraint of the right of redemption from a lien are
void.35-01-11. Obligation to perform not to be implied from creation of lien. The creationof a lien does not of itself imply that any person is bound to perform the act for which the lien is a
security.35-01-12. Extent of lien limited to original obligation. The existence of a lien uponproperty does not of itself entitle the person in whose favor it exists to a lien upon the same
property for the performance of any other obligation than that which the lien originally secured.Page No. 235-01-13. Holder of property not compensated for expense - Exception. Any personholding property by virtue of a lien thereon is not entitled to compensation from the owner thereof
for any trouble or expense which the person holding the property incurs respecting it, except to
the same extent as a borrower under sections 47-12-08 and 47-12-09.35-01-14. Priority according to date of creation. Other things being equal, differentliens upon the same property have priority according to the time of their creation.35-01-15. Order of resort for payment - Marshalling securities. When a person has alien upon several things and other persons have subordinate liens upon or interests in some but
not all of the same things, the person having the prior lien, if that person can do so without the
risk of loss to that person or of injustice to other persons, on the demand of any party interested,
must resort to the property in the following order:1.To the things upon which that person has an exclusive lien.2.To the things which are subject to the fewest subordinate liens.3.In like manner inversely to the number of subordinate liens upon the same thing.4.When several things are within one of the foregoing classes, and subject to the
same number of liens, resort must be had:a.To things which have not been transferred since the prior lien was created;b.To the things which have been so transferred without a valuable consideration;
andc.To the things which have been so transferred for a valuable consideration in the
inverse order of the transfers.35-01-16. Right of redemption - When made.Every person having an interest inproperty that is subject to a lien has a right to redeem it from the lien at any time after the claim is
due and before the person's right of redemption is foreclosed.35-01-17. Inferior lienholder may redeem - Subrogation. Any person who has a lieninferior to another upon the same property has a right:1.To redeem the property in the same manner as its owner might from the superior
lien; and2.To be subrogated to all the benefits of the superior lien when necessary for the
protection of the person's interests, upon satisfying the claim secured thereby.35-01-18. Redemption - How made. Redemption from a lien is made by performing oroffering to perform the act for the performance of which it is a security and paying or offering to
pay the damages, if any, to which the holder of the lien is entitled for delay. If the act requires the
delivery of money, property, or a conveyance of property, the offer must be accompanied by a
deposit of the same and the giving of notice thereof as provided in section 9-12-25.35-01-19. Lien accessory to act secured - Extinguishment. A lien is accessory to theact for the performance of which it is a security, whether any person is bound for such
performance or not, and is extinguishable in like manner with any other accessory obligation.35-01-20. Extinguishment of lien by sale or conversion of property - Mitigation ofdamages in conversion. The sale of any property in satisfaction of a lien, or in case of personal
property, the wrongful conversion thereof by the person holding the lien, extinguishes the lien
thereon.In an action for the conversion of personal property, the defendant may show inPage No. 3mitigation of damages the amount due on any lien to which the plaintiff's rights were subject and
which was held or paid by the defendant or any person under whom the defendant claims.35-01-21.Lien dependent on possession - Voluntary restoration of propertyextinguishes lien. The voluntary restoration of property to its owner by the holder of a lien
which is dependent upon possession extinguishes the lien as to such property unless otherwise
agreed by the parties, and notwithstanding any such agreement, extinguishes it as to creditors of
the owner and persons subsequently acquiring title to the property, or a lien thereon, in good faith
and for a good consideration.35-01-22. Lien not extinguished by lapse of time for enforcing main obligation. Alien is not extinguished by the lapse of the time within which an action can be brought upon the
principal obligation under the provisions of the laws of this state.35-01-23. Lien not extinguished by partial performance. The partial performance ofan act secured by a lien does not extinguish the lien upon any part of the property subject thereto
even if it is divisible.35-01-24. Satisfaction of lien before maturity. Any lien or mortgage upon propertymay be satisfied by the mortgagor before the date of maturity by the payment or tender of the full
amount which would be due on the date of maturity.35-01-25. Assignment, satisfaction, foreclosure of mortgage, judgment, or otherlien by heir, legatee, foreign administrator, executor, or guardian. A mortgage, judgment, or
other lien upon real or personal property may be satisfied, assigned, or foreclosed by the
following persons upon complying with the provisions of this section:1.By an executor or administrator appointed in another state or foreign country to
administer the estate of any person owning any such mortgage, judgment, or other
lien, when no executor or administrator of the estate of such person has been
appointed in this state, upon recording or filing an authenticated copy of the person's
letters testamentary or letters of administration in the office in which such mortgage,
judgment, or other lien is recorded or filed.2.By an heir or legatee of such deceased person, residing within or without the state,
upon recording or filing in the office in which such mortgage, judgment, or other lien
is recorded or filed, an authenticated copy of the judgment or decree of the foreign
court transferring the ownership of such mortgage, judgment, or other lien to such
heir or legatee.3.By a guardian appointed in another state or foreign country of a person owning any
such mortgage, judgment, or other lien upon real or personal property, upon
recording or filing an authenticated copy of the person's letters of guardianship in the
office in which the mortgage, judgment, or other lien is recorded or filed, together
with an authenticated copy of the judgment or decree of the foreign court transferring
the ownership of such mortgage, judgment, or other lien to the ward, if it has been
so transferred.35-01-26.Destroying, concealing, selling property subject to lien - Penalty.Repealed by S.L. 1975, ch. 106,