I agree the seller needed the money for something else. If the seller doesn't pay off the lien immediately, you can go to court with your bill of sale and you will win your case easily...but if it's over $5000 it's too big for small claims and you will need a lawyer to file suit. Getting a judgement in your favor and getting your money back are two different things...seller may file bankruptcy if he's in tough shape.
In your case, the cashier's check you gave to the seller should have been made payable to the lienholder, so the seller couldn't cash it himself and do exactly this.
Note to anyone else who may be a buyer in this kind of transaction, always ask to see the title so you can see if there is a lien recorded. If so, call the lienholder yourself and verify the payoff amount. Always make your bank check payable to the lienholder for the payoff amount. If the sale price is more than the lien, then you give a separate cashier's check to the seller made out to him for the difference. If the sale price was less, as in this case, you as the buyer get a check from the seller payable to the lienholder for the difference and mail both together yourself.
You as the buyer hold the title with the seller's signature on it when the checks are mailed because the lienholder will mail the lien release to the seller.
This keeps everybody honest.
