Bobbie White v. Josefino Bencomo III
03-14-00812-CV
| Tex. App. | May 6, 2015Background
- Appellee foreclosed on property owned by Appellant (White); Appellant sued to quiet title and claimed statutory damages under Tex. Prop. Code §§5.066 and 5.077.
- White’s theory: the warranty deed that reserved a vendor’s lien made the transaction an "executory contract" governed by Property Code Chapter 5, Subchapter D (contracts for deed protections).
- After an ex parte TRO and negotiations, parties submitted cross motions for summary judgment; Appellee rescinded the foreclosure to allow reinstatement.
- Trial court granted summary judgment for Appellee; White appealed.
- Appellee argues Subchapter D applies to contracts for deed (traditional executory contracts), not to transactions where title was conveyed by deed with a retained vendor’s lien and secured by a deed of trust.
Issues
| Issue | Plaintiff's Argument (White) | Defendant's Argument (Bencomo) | Held |
|---|---|---|---|
| Whether a deed reserving a vendor’s lien is an "executory contract" under Tex. Prop. Code Ch. 5, Subchapter D | Reservation of vendor’s lien retains superior title and thus makes the deed an executory contract subject to Subchapter D | A deed reserving vendor’s lien is "executory" only as to naked legal title vesting on payment; otherwise it is an executed conveyance and not the type of contract Subchapter D targets | Court adopted defendant’s position: Subchapter D targets contracts for deed (true executory contracts), not ordinary deeds reserving vendor’s liens |
| Whether holder of a real-estate note secured by a vendor’s lien and deed of trust must comply with Subchapter D notice/cure/accounting provisions | Subchapter D’s protections (notice, cure periods, annual statements, rescission rights) apply because the vendor retained title via vendor’s lien | Those provisions apply to sellers under contracts for deed; applying them to deeds that conveyed title at closing (even if vendor’s lien reserved) leads to absurd, unintended results and is excluded by text (e.g., 180-day delivery exclusion) | Court held Subchapter D does not apply to conventional financing transactions where a deed was delivered at closing and vendor’s lien/deed of trust secure payment |
Key Cases Cited
- Humphreys-Mexia Co. v. Gammon, 254 S.W. 296 (Tex. 1923) (deeds reserving vendor’s lien are executory only in that legal title remains with vendor until payment)
- Flores v. Millennium Interests, Ltd., 185 S.W.3d 427 (Tex. 2005) (equates "executory contracts" in Subchapter D with contracts for deed)
- Shook v. Walden, 368 S.W.3d 604 (Tex. App. 2012) (interpreting Subchapter D context and limits; treating executory-contract concept narrowly)
- Brown v. De La Cruz, 156 S.W.3d 560 (Tex. 2004) (discussing statutory transfer obligations for sellers by executory contract)
- Zapata v. Torres, 464 S.W.2d 926 (Tex. Civ. App. 1971) (vendor retaining lien has choice of remedies on purchaser default)