45-108. LIEN FOR PERFORMANCE OF FUTURE OBLIGATIONS — VALIDITY — PRIORITY. A lien may be created by contract, to take immediate effect, as security for the performance of obligations not then in existence, which lien, if not invalid on other grounds, shall be valid as against all persons.

The validity of such contracts and liens as security for any obligation is not affected as against any person by the fact that the contract does not specify, describe or limit the obligations to be secured as to purpose, nature, time, or amount of the obligations to be secured.

All such liens, if otherwise valid, are valid against and prior and superior to all rights, liens and claims acquired by other persons in the property subject thereto after the contract creating such liens was made, except in cases where the person in whose favor the obligation secured by such lien was created, had actual notice of the existence of such subsequent right, lien or claim at the time such obligation was created, and are prior and superior to such subsequent rights, liens or claims irrespective of such or any notice in the following cases:

1. Where the person, in whose favor the obligation secured thereby was created, was legally bound to make the advance or give the consideration resulting in such obligation.

2. Where the consideration for such obligation was necessarily and actually applied to the maintenance and/or preservation of the property subject to the lien.

Making the advance or giving the consideration to result in an obligation not in existence at the time such a contract creating a lien to secure the same is made, is optional with the person making the advance or giving the consideration unless he is bound by an express contract to the contrary which shall not be implied from the fact that the contract to secure such obligation was made.

Obligations otherwise within the limits and description of those specified in any contract creating a lien to secure the performance of obligations not then in existence, but created in favor of any person to whom the original party to be secured by the lien created by such contract has transferred such contract, shall also be secured thereby in like manner as similar obligations between the original parties thereto.

Contracts of mortgage of real property are subject to all the provisions of this section as amended.

History:

[(45-108) R.S., sec. 3332; reen. R.C. & C.L., sec. 3380; C.S., sec. 6347; am. 1929, ch. 255, sec. 1, p. 520; I.C.A., sec. 44-108; am. 1955, ch. 145, sec. 1, p. 286; am. 1967, ch. 272, sec. 10, p. 745.]