Dietrich Industries, Inc. v. United States

REAVLEY, Circuit Judge:

Under Texas law of equitable subrogation, is the purchaser of encumbered property who discharges a senior lien as part of the purchase price entitled to subrogate to the position of priority over a junior recorded lien? We answer that the purchaser is subrogated to the senior position and reverse the district court’s summary judgment in favor of the junior lienholder.

I. BACKGROUND

Australian Acquisitions, Inc. (AAI) owned a tract of land in Hutchins, Texas. In 1988, AAI executed a deed of trust on this property in favor of Broadlands Limited (Broadlands) to secure a debt…