Prue v. Royer, 2013 VT 12, 67 A.3d 895, 193 Vt. 267 (Vt. 2013)
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- Citation: Prue v. Royer, Sr., and Department of Liquor Control, 2013 VT 12, 67 A.3d 895, 193 Vt. 267 (Vermont Supreme Court 2013).
- Court / Year: Vermont Supreme Court, 2013 (decided Feb. 15, 2013; docket 2011-417).
- Topic tags: equitable_interest · forfeiture · foreclosure · equity_of_redemption
- Facts: The parties entered a real-estate agreement under which the purchasers took possession and paid toward the price over many years. When a dispute arose, the trial court construed the agreement as a contract for deed rather than a lease or mere option, concluded the purchasers had acquired an equitable interest in the property, and — treating the contract as embodying a mortgage — sua sponte ordered a strict foreclosure with a short redemption period and a high redemption amount.
- Holding: The Vermont Supreme Court affirmed that the agreement was an enforceable contract for deed and that, because Vermont treats such a contract as an equitable mortgage, the purchasers held an equity of redemption — “such that the only means to extinguish [the purchasers’] interest [is] foreclosure.” The Court noted Vermont is “one of only a small minority of states” to treat a contract for deed as an equitable mortgage. It reversed the foreclosure decree as premature on the record and remanded (the foreclosure issues — strict foreclosure vs. sale, the redemption period, and the redemption amount — had not been properly developed below).
- Reasoning: A contract for deed in Vermont functions as security for the purchase price: the vendor retains legal title as security while the vendee acquires the equitable interest. The right of redemption “is the device that removes a foreclosure from the condemnation of a forfeiture,” and it attaches to any transaction characterized as a mortgage. Consequently a defaulting vendee cannot be summarily dispossessed by forfeiture; the vendor must foreclose under Vermont’s mortgage- foreclosure regime (12 V.S.A. ch. 172), and the court must respect the statutory framework — including the requirement (12 V.S.A. § 4941(c)) that a strict (no-sale) foreclosure issue only on a finding of no substantial value in the property in excess of the debt, with the redemption period set by reference to the property’s value, junior debt, unpaid taxes, condition, and other equities.
- Practical impact for CFD operators/buyers: This is the controlling modern statement that Vermont is a treat-as-mortgage jurisdiction. A seller cannot enforce a forfeiture clause to retake the land and keep the payments; the seller must foreclose the contract, and a buyer with substantial equity is entitled to a judicial sale (12 V.S.A. § 4945) with surplus returned, not a strict no-sale decree. Buyers hold a statutory equity of redemption (up to six months for an owner-occupied residence, 12 V.S.A. § 4946(b)). The case is Vermont’s analogue to sebastian-v-floyd-1979 and the equity-protective rule of skendzel-v-marshall-1973.
- Good-law status: Good law (2013 Vermont Supreme Court; the controlling recent authority on contract-for-deed characterization in Vermont).
- Source (retrieved): https://www.courtlistener.com/opinion/1043646/prue-v-royer-sr-and-department-of-liquor-control/ · Verified: 2026-06-08
Jurisdictions that follow / cite: vermont
Note on predecessor authority: Prue describes Vermont’s equitable-mortgage treatment as long and “consistently” applied, citing older Vermont decisions. The specific predecessor Vermont cases should be pinned and added as their own case pages — see
vermont.mdneeds_verification.Verification note (2026-06-10, second pass): The opinion text was retrieved this pass from multiple independent sources (Justia-indexed opinion body, FindLaw, CourtListener docket, vLex listing). Confirmed verbatim: “Vermont has consistently treated a contract for deed as an equitable mortgage … one of only a small minority of states to do so”; the equity “is referred to as the equitable mortgage interest that requires foreclosure”; “plaintiffs held an equity of redemption, such that the only means to extinguish plaintiffs’ interest was foreclosure.” Disposition confirmed: the contract-for-deed characterization was affirmed; the trial court’s sua sponte (strict) foreclosure decree was reversed as premature and remanded. The case turned on contract for deed vs. lease-option characterization — it is not a waiver/course-of-dealing case, and the court did not uphold a forfeiture clause. Cite, court, and year all match.
Disclaimer. Legal information, not legal advice. Confirm the opinion is still good law before relying on it.