Title: Huntington v. McCarty

State: vermont

Issuer: Vermont Supreme Court

Document:

Huntington v. McCarty (2000-545); 174 Vt. 69; 807 A.2d 950

[Filed 28-Jun-2002]


       NOTICE:  This opinion is subject to motions for reargument under
  V.R.A.P. 40 as well as formal revision before publication in the Vermont
  Reports.  Readers are requested to notify the Reporter of Decisions,
  Vermont Supreme Court, 109 State Street, Montpelier, Vermont 05609-0801 of
  any errors in order that corrections may be made before this opinion goes
  to press.


                                No. 2000-545


  George Huntington	                         Supreme Court
    
                                                 On Appeal from
       v.	                                 Orange Superior Court


  William M. McCarty and 	                 November Term, 2001
  Patricia Baker


  M. Kathleen Manley, J.
     
  Richard E. Davis, Jr., Barre, for Plaintiff-Appellee.

  Anthony Z. Roisman and P. Scott McGee of Hershenson, Carter, Scott & McGee,
    Norwich, for Defendant-Appellant.
   

  PRESENT:  Amestoy, C.J., Dooley, Morse, Johnson and Skoglund, JJ.


       AMESTOY, C.J.   Defendant Patricia Raitt Baker appeals an Orange
  Superior Court order denying her motion to dismiss a foreclosure action
  filed by plaintiff George Huntington.  On appeal, this Court is asked to
  determine whether an enforceable mortgage debt can survive when the statute
  of limitations has run on the underlying promissory note and what remedy,
  if any, the mortgagee retains.  We affirm. 
   
       The parties have stipulated to the following facts on appeal, pursuant
  to V.R.A.P. 10(d).  In November 1990, Patricia Raitt Baker issued a
  promissory note in the amount of $9,000 to George Huntington, with the
  principle and interest due in November of 1991.  The note was secured in


 

  December 1990 by a mortgage deed.  Raitt Baker made no payments to
  Huntington, and therefore, in November 1991, was in default on the note. 

       In August 1998, nearly seven years after Raitt Baker had defaulted,
  Huntington filed a complaint for foreclosure on the mortgage in Orange
  Superior Court.  Raitt Baker filed a motion to dismiss, claiming that the
  six-year statute of limitations applicable to promissory notes had run and
  rendered both the note, and the mortgage securing it, unenforceable.  The
  trial court, in a February 1999 order, held the note was barred by the
  six-year statute of limitations but found the mortgage deed was governed by
  a fifteen-year statute of limitations, and accordingly, was still
  enforceable pursuant to 12 V.S.A. § 502.  

       Following the original order, the parties stipulated to vacate and
  revise the judgment.  In an  October 2000 revised judgment order, the
  court, based on the stipulation of the parties, awarded Huntington
  foreclosure by power of sale, with a six month redemption period for Raitt
  Baker, but stayed execution of the foreclosure pending Raitt Baker's appeal
  to this Court.  

       On appeal, Raitt Baker argues: (1) that the mortgage is unenforceable
  where the statute of limitations has run on the underlying promissory note;
  and (2) that the power of sale is a remedy governed by the statute of
  limitations for the promissory note, hence even if the mortgage is
  enforceable, so long as the note is unenforceable, the remedy of the power
  of sale is not available.  Because we find that the obligations under the
  mortgage are enforceable even where the statute of limitations on the
  promissory note has run, and that the remedy of power of sale survives the
  statute of limitations, we affirm.
   
       Where a promissory note is secured by a mortgage, the mortgage is an
  incident to the note.  Island Pond Nat'l Bank v. Lacroix, 104 Vt. 282,
  294-95, 158 A. 684, 690 (1932).  However, a 

 

  promissory note and a mortgage are individually governed by different
  statutes of limitations - the enforcement of a note is a civil action with
  a six-year statute of limitations, 12 V.S.A. § 511, whereas enforcement of
  a mortgage is an action in land with a fifteen-year statute of limitations. 
  12 V.S.A. § 502; Cameron v. Bailey, 117 Vt. 158, 160,