2005-293, THE CADLE COMPANY v. ROBERT DEJADON

The plaintiff, The Cadle Company, appeals an order of

and orally), for the defendant. Gottesman and Hollis, P.A., of Nashua (Paul M. DeCarolis on the brief

orally), for the plaintiff. Errors may be reported by E-mail at the following address: Paul C. Bordeau, PLLC, of Gilford (Paul C. Bordeau on the brief and

errors in order that corrections may be made before the opinion goes to press. No. 2005-293 Hampshire, One Noble Drive, Concord, New Hampshire 03301, of any editorial Hillsborough-southern judicial district Readers are requested to notify the Reporter, Supreme Court of New ___________________________

THE SUPREME COURT OF NEW HAMPSHIRE

page is: http://www.courts.state.nh.us/supreme. a.m. on the morning of their release. The direct address of the court's home reporter@courts.state.nh.us. Opinions are available on the Internet by 9:00

well as formal revision before publication in the New Hampshire Reports. NOTICE: This opinion is subject to motions for rehearing under Rule 22 as him.” p. 2 pleadings and construe all reasonable inferences in the light most favorable to

cause of action has been asserted.

118 barred its action on the promissory note. RSA 508:6; and (4) the six-year statute of limitations provided by RSA 382-A:3note secured by a mortgage pursuant to the statute of limitations provided by Harrington v. Brooks Drugs, 148 N.H. 101, 104 (2002).

(1995). In doing so, we “assume the truth of the facts alleged in the plaintiff’s

scrutinize the facts contained on the face of the petition to determine whether a would permit recovery.” LaRoche, Adm’r v. Doe, 134 N.H. 562, 564 (1991). We not the plaintiff’s allegations are reasonably susceptible of a construction that action within the required time period.” In reviewing a motion to dismiss, the standard we apply is “whether or defendant had “met his burden of demonstrating the plaintiff failed to bring its note arose on the date of the foreclosure sale in 1993, concluded that the

508:2; (3) the plaintiff was not entitled to bring an action on the promissory the balance of the note. mortgage pursuant to the twenty-year statute of limitations provided by RSA the property free of any mortgage lien. No payment has since been made on operation of law; (2) the plaintiff was not entitled to bring an action on the party on November 18, 1993, for $97,000.00. The foreclosure deed conveyed by ruling that: (1) the foreclosure effectively discharged the mortgage by the power of sale conferred by the mortgage, the property was sold to a third The plaintiff argues on appeal that the trial court erred as a matter of law

the six-year statute of limitations and, finding that the cause of action on the now entitled to proceed against the defendant on the Note.” The court applied mortgage has been discharged by virtue of the foreclosure, the plaintiff is not discharge the mortgage by operation of law. Consequently, given that the The trial court ruled that “the 1993 foreclosure served to effectively

applicable. See RSA 508:2 (1997). property was foreclosed upon by the plaintiff’s predecessor in title. Pursuant to discharged, the twenty-year statute of limitations relating to mortgages was there was an underlying mortgage securing the note that had not been instruments under RSA 382-A:3-118 (1994). The plaintiff argued that because was barred by the six-year statute of limitations applicable to negotiable deficiency on the note of $248,937.86. The defendant argued that the action In September 2004, the plaintiff brought suit to collect the outstanding

The defendant had defaulted on the note and in October 1993, the

2004. Resources, LLC, effective July 19, 2000, by an allonge dated December 18, payment, the mortgage shall be void. p. 3 terms thereof, or upon the legal tender of such performance and reason of the nonperformance of such condition according to the

mortgage and the payment of all damages and costs arising by

shall be witnessed or acknowledged . . . .” mortgage was not discharged. We agree. RSA 479:6 (2001) provides: mortgagee, his executor, administrator, successor, or assign whose signature shall be in the form of a written document and shall be signed by the on real property.” the mortgagee shall give the mortgagor a discharge thereof. Said discharge establishes a twenty-year statute of limitations for notes secured by mortgages RSA 479:7, I (2001), provides: “When a mortgage upon real estate is satisfied,

Upon the performance of the acts stated in the condition of a

note thereby paid, no action could be maintained on either. But defendant was not satisfied by the proceeds of the 1993 foreclosure sale, the against the note. If the mortgage had been foreclosed and the The plaintiff argues that because the promissory note executed by the

mortgage.” “When read in conjunction with RSA 508:2, . . . RSA 508:6 Alexander v. Whipple, 45 N.H. 502, 505 (1864) (emphasis added).

mortgage. limitations might be properly pleaded to any action upon the maintained upon the note . . . until such time as the statute of otherwise, and the mortgage is not discharged, an action may be if the note remains unpaid by foreclosure of the mortgage or

maintained on it, then . . . the statute of limitations would run If the mortgage were discharged so that no action could be

be brought so long as the plaintiff is entitled to bring an action upon the note.” Id. (1997) provides: “Actions upon notes secured by a mortgage of real estate may the statute extends the time during which an action may be brought on the party claiming it or to some persons under whom he claims.” RSA 508:6 the mortgage does not depend on the limitations period for the note. Rather, Levine, 116 N.H. 379, 380 (1976). “Under the statute, the period for enforcing though the collateral is no longer available to satisfy the claim.” Phinney v. mortgage after the limitations period for an unsecured note has expired, even “Under [RSA 508:6], an action may be maintained on a note secured by a

brought after 20 years from the time the right to recover first accrued to the Pursuant to RSA 508:2, “No action for the recovery of real estate shall be before us.

p. 4 secured by mortgages on real property which remain actionable, as in the case

508:6 makes the statute applicable to the specific category of notes that are (20) year statute of limitations under RSA 508:2.” The plain language of RSA able to bring an action upon the mortgage, it would be entitled to the twenty

that in RSA 508:6. Indeed, the trial court acknowledged that “were the plaintiff conclusion that the statute of limitations in Article 3 was intended to supplant are reasonably susceptible of a construction that would permit recovery.” twenty-year statute of limitations applies. Therefore, “the plaintiff’s allegations

DALIANIS, DUGGAN and GALWAY, JJ., concurred.

LaRoche, 134 N.H. at 564.

Uniform Commercial Code; nor does the defendant offer any support for his the note at issue is a negotiable instrument governed by Article 3 of the the mortgage and the mortgage has not been discharged, we hold that the period is found in RSA 382-A:3-118(a). There is no evidence in this record that Because the note at issue in this case remains unpaid by foreclosure of conclusion. The defendant argues, however, that the applicable limitations statute of limitations for twenty years.

promissory note effectively discharged the mortgage.

does not discharge the mortgage and that the trial court erred in reaching that The defendant agreed at oral argument that the mere fact of foreclosure remain undischarged, the debtor waived the right to plead the where the covenants of the mortgage given to secure the note still assert, in an action against his debtor (the mortgagor), that a matter of law in ruling that foreclosure of the mortgage securing the once it has been sold free and clear at a foreclosure sale, he may limitations on the mortgage. Accordingly, we hold that the trial court erred as an unpaid note remains actionable until the running of the statute of upon the mortgage cannot void or discharge it by operation of law. Therefore or an express discharge of the mortgage by the mortgagee, merely foreclosing Del Norte, 142 N.H. at 539-40. We conclude that absent full payment of a note

of the debt, or a release by the mortgagee, will discharge a mortgage.” compelled by the mortgagee. “It is well settled that nothing but payment in fact

[A]lthough the mortgagee no longer has recourse to the property

Phinney, 116 N.H. at 380; see Wiggin, 35 N.H. at 427. that she has performed the obligation which the mortgage was given to secure.” “The plaintiff is entitled to discharge of the mortgage only if she establishes Wiggin, 35 N.H. 421, 426 (1857); see Swett v. Horn, 1 N.H. 332, 333 (1818).

performance of the conditions of a mortgage is it rendered void and a discharge We have consistently interpreted these statutes to mean that only upon