Cache National Bank V. Lusher

In an action brought by Cache National Bank (CNB) against Marjorie Lusher to quiet title to an undivided one-half interest in certain real property, the Colorado Court of Appeals reversed the trial court's entry of summary judgment in favor of CNB and directed entry of judgment in favor of Lusher. Cache Nat'l Bank v. Lusher, No. 92CA0077 (Colo. App. March 18, 1993) (not selected for official publication). Lusher asserted title through foreclosure of a deed of trust senior to the deed of trust that was the source of CNB's claim. The Lusher deed of trust secured obligations of co-makers of a promissory note. The issue presented for our determination is the effect of the running of the statute of limitations as to the personal liability of one co-maker of that promissory note on the validity of the  lien of the deed of trust on that co-maker's undivided one-half interest in the property encumbered by the lien. We hold that because each maker encumbered his or her interest in the property to secure not only his or her own individual obligations on the note but also the obligations of the other co-maker, the lien on the property remained in effect on each co-maker's interest notwithstanding the extinguishment of one co-maker's personal liability on the note. We base this holding on the language of section 38-39-207, 16A C.R.S. (1993), concerning extinguishment of liens, and on the terms of the original promissory note and deed of trust. We therefore affirm the judgment of the court of appeals.