In October 2021, the vendor bought a note and vendor’s lien on a property in El Paso County from a bankruptcy trustee. The property had a complex history of promissory notes and conveyances. The vendees claimed an interest in the property and had purchased it from a realty corporation in 1999. The vendees conducted multiple complex transactions, including the execution of wrap-around mortgage notes and a wrap-around deed of trust. The vendees made payments on the 1999 note to the prior interest holder before the vendor had obtained the note and the vendor’s lien. The previous holder of the vendor’s lien filed for bankruptcy in August 2019. Believing the vendees had defaulted on the note, the vendor sought to resolve the deficiency but, after failed negotiations, sued in December 2021, seeking to rescind the vendor’s lien and take possession of the property. The vendor and vendees disputed the balance remaining on the note. After the trial court reviewed the parties’ incomplete and conflicting records, it found the vendees owed $1,509 on the note. The vendor then appealed.
In Miranda v. Diaz, No. 08-23-00270-CV, 2025 WL 1481895, 2025 Tex. App. LEXIS 3559 (Tex. App.—El Paso May 22, 2025) (opinion not yet released for publication), the Eighth Court of Appeals of Texas addressed three issues. First, whether the vendor had proven the vendees were in default, allowing him to rescind the vendor’s lien and regain possession of the property. Second, whether the evidence had supported the trial court’s decision regarding the vendees’ defense of payment. Third, whether the trial court’s failure to issue findings and conclusions had harmed the vendor. The court found the vendor had not conclusively proven default because acceptance of late payments had waived strict compliance, and the vendor could not prove the vendees’ precise obligations under the operative note. Because the vendor had failed to object to the improperly pleaded affirmative defense, the court held he could “not complain for the first time on appeal” and denied his pleading argument. The court also determined the evidence had been insufficient to show the note had been fully paid because, although the vendee had testified to making payments, the determination of whether those payments had been made after the vendees had been notified of the loan balance would require speculation. Lastly, the court held that the vendor did not demonstrate harm from the lack of findings of fact and conclusions of law by the lower court. Because the vendor had not shown he had been forced to guess the basis of the trial court’s ruling, and instead had asserted only conclusory claims of harm, the court overruled the vendor’s third complaint. To conclude, the court affirmed the trial court’s denial of the vendor’s claim to rescind the lien and take possession of the property and reversed the portion of the ruling requiring the vendees to pay the vendor.
By Annette Addo-Yobo [email protected]
Edited By Jace Brown [email protected]
Edited By Callighan Ard [email protected]