419 Glenn v. Lucas

Richard F. Brown

 
The following is not a legal opinion.  You should consult your attorney if the case may be of significance to you.
 
Glenn v. Lucas, 376 S.W.3d 268 (Tex. App.—Texarkana 2012, no pet.) held that a vendor perfected title under a judgment foreclosing a vendor’s lien, even though there was no execution sale.  The property, including 1/2 of the minerals, was conveyed under a 1925 deed subject to a series of vendor’s lien notes.  The original grantor assigned four of the nine vendor’s lien notes to Byford and agreed that the lien assigned was superior to the lien securing the other five notes.  Various other parties acquired interests from the original grantee.  In 1932, Byford was granted judgment against the original grantor and some of the original grantee’s assignees for foreclosure of the vendor’s lien held by Byford.  There was no sale under execution as a result of that judgment.  Some of the defendants in the 1932 suit executed deeds in lieu of foreclosure to Byford.  The parties aligned as successors to Byford, Grantor, and Grantee.
 
A purchase-money vendor’s lien is a charge imposed by contract to secure payment of the purchase price of real property.  “The vendor, or seller, retains the superior title, and the vendee, or buyer, merely has an equitable right to acquire title by carrying out the agreement.”  Thus, Byford retained superior legal title to the property.  “The vendor has a choice of remedies on the vendee’s default.  The vendor may sue for his money, he may rescind the contract and take possession, or he may sue to recover title and possession.”  The holder of a series of vendor’s lien notes cannot sue for rescission unless the holder holds all of the notes, so Byford sued to foreclose and recover title and possession in 1932.
 
Grantor and Grantee argued that because there was no foreclosure sale, their title was superior.  As to those successors whose predecessors were parties to the 1932 foreclosure suit and who did then execute deeds in lieu of foreclosure, the court held those deeds were sufficient to transfer title.  Some of the successors claimed under predecessors who were not made parties to the 1932 suit and who also did not execute a deed in lieu of foreclosure.  The court held that those predecessors would not have been necessary parties to the 1932 suit, but they would have retained an unmatured equitable right to title upon complete payment of the purchase price.  However, the right of the successors to assert that claim was now barred by laches.  Similarly, the successors whose predecessors were made parties to the 1932 suit, but who did not execute a deed in lieu of foreclosure, were also barred by laches.
 
The case highlights the effect of a vendor’s lien as limiting the title conveyed to an unmatured equitable right until the purchase price is paid.  Successors to the original grantee also acquire only an unmatured equitable right to title upon complete payment of the purchase price.  Deeds in lieu of foreclosure are generally upheld.