Opinion ID: 1788495
Heading Depth: 1
Heading Rank: 4

Heading: Vendor's Lien Claim Against Hill, Thomas, and the Bank

Text: The DeVenneys argue that the trial court erred in failing to enter a summary judgment in their favor on the equitable claim of a vendor's lien against Hill, Thomas, and the Bank. [13] The DeVenneys argue that they have an equitable vendor's lien against Hill, Thomas, and the Bank because, they say, they transferred the land to Hill but did not receive the full purchase price. Hill, Thomas, and the Bank argue that the DeVenneys waived their equitable claim of a vendor's lien and that the trial court correctly entered a summary judgment in their favor. We agree that the DeVenneys waived their equitable claim to a vendor's lien, and we affirm the summary judgment in favor of Hill, Thomas, and the Bank on the vendor's lien claim. There are three types of vendor's lien: (1) the grantor's implied lien where the law imposes a lien in favor of a vendor who has conveyed real property without taking any security for the payment of the purchase price; (2) the grantor's express lien where the grantor secured the lien by express contract; and (3) the grantor's retention of title where the vendor retains his title as security for the vendee to perform the contract. Wingard v. Randall, 269 Ala. 420, 424-25, 113 So.2d 674, 677-78 (1959). An implied vendor's lien arises if (1) there is a sale of real property and (2) unsecured purchase money remains unpaid. Meeks v. Meeks, 247 Ala. 606, 608, 25 So.2d 668, 669 (1946). In this case, the DeVenneys agreed to sell the land; they conveyed the deed to Hill; and Hill and Thomas did not fully pay the purchase price. Thus, the law could impose a vendor's lien. See Bridgeport Land & Improvement Co. v. American Fire-Proof Steel Car Co. of Alabama, 94 Ala. 592, 10 So. 704 (1892)(holding that the vendor's lien is a creature of equity and that the reason for attaching the lien is that it goes against good conscience for one person to keep another person's land without having paid the agreed consideration). However, the implied vendor's lien may be waived, and the purchaser has the burden of showing any waiver of the implied vendor's lien. Lindsey v. Thornton, 234 Ala. 109, 173 So. 500 (1937). The lien may be waived (1) by the vendor's affirmative intention, Lindsey, (2) by reliance, not on land, but on a substituted, independent security, Armour Fertilizer Works v. Zills, 235 Ala. 41, 177 So. 136 (1937); Kinney v. Ensminger, 94 Ala. 536, 10 So. 143 (1891), or (3) by reliance on the personal responsibility of the vendee, Armour; Kinney. The courts should look at all the facts and circumstances in a case to determine whether the vendor waived the lien. Armour. In this case, Thornton explained at the closing that the postdated check of $150,000 was not good at that time. Mrs. DeVenney testified at her deposition that she told Thornton that she understood that she was looking to Eason to make the $150,000 check good. Further, Mrs. DeVenney understood that the DeVenneys were essentially financing $150,000 for 30 days after the closing. Thus, facts and circumstances indicate that Mrs. DeVenney was relying on the personal responsibility of Eason, who was paying on behalf of Hill and Thomas, for the rest of the purchase money. The appearance of reliance on personal responsibility creates a rebuttable presumption of waiver. Walker v. Carroll, 65 Ala. 61 (1880). See also Lindsey, supra (holding that the giving of other security creates a prima facie presumption of waiver, but that the presumption may be rebutted). The DeVenneys have not shown any facts to rebut the presumption that they were relying upon Eason's personal responsibility for the unpaid portion of the purchase price. In Fowler v. Falkner, 199 Ala. 6, 73 So. 980 (1917)(holding that where the vendor was induced by the vendee to accept third-party notes as part of the purchase price, the vendor did not waive the lien where the notes were not of the agreed-upon value, and the vendee had fraudulently misrepresented the value of the notes), and Madden v. Barnes, 45 Wis. 135 (1878)(holding that the vendor did not waive the lien where a check was refused for insufficient funds by the vendee's bank; the vendee's check was fraudulent because the presentment of a check presupposes that there are sufficient funds in the bank account), the recipients of the payments had no reason to believe that the respective notes and check were not good. The DeVenneys, on the other hand, knew at the time of the closing that the $150,000 check was not good. The DeVenneys understood that they were essentially making a $150,000 loan for 30 days and that they were relying on the personal responsibility of Eason to make good the payment. Under these circumstances, we find that the DeVenneys waived their implied vendor's lien against Hill, Thomas, and the Bank. [14]