Luthi v. Evans

FACTS:

            Grace Owens, as of February 1st, 1971, owned several interests in oil and gas leases in Coffey County, Kansas. On that date, Owens executed a written instrument to International Tours, Inc., defendant, stating: “Assignment of Interest in Oil and Gas Leases” recorded in Coffey County on February 16th, 1971. The first paragraph of the assignment specifically described seven oil and gas leases for assignment to the defendant. The second paragraph of the assignment conveyed all interest in oil and gas leases in Coffey County to the defendant, “whether or not specifically enumerated above”. However, Owens owned interest in an oil and gas lease located in Kufahl, which is not in Coffey County. The assignment to Tours did not include a specific designation of the ownership of the Kufahl interest in the first paragraph, but the second paragraph provided that all interest in oil and gas leases were assigned to the defendant whether or not they were specifically enumerated. Owens later assigned the Kufahl lease to J.R. Burris on January 30th, 1975. Burris personally checked the register of deeds and secured an abstract of the title to the real estate in question. Neither of which reflected the prior assignment to Tours. Accordingly, a controversy arose between International Tours and Burris regarding ownership of the Kufahl lease. Tours contends that the initial assignment from Owens conveyed them the interest in the Kufahl lease, regardless of the vague description, and that recording of the assignment gave Burris constructive notice of their ownership. Burris, however, asserts that the general description in the assignment failed to transfer the Kufahl lease to Tours because it failed to state the specific names of the parties, the date of the lease, any legal description, and the recording data. Thus, he was not given constructive notice and the later assignment therefore lawfully conveyed the interest to him.

PROCEDURAL HISTORY:

The district court held in favor of Burris due to the inadequate description in the initial assignment to Tours. On appeal, the Court of Appeals held that the description in the initial assignment to Tours was indeed legally sufficient to transfer them the Kufahl interest and give constructive notice to Burris after it was recorded. Burris appeals the decision.

ISSUE:

            The issue is whether the recording of an instrument of conveyance which uses a “Mother Hubbard” clause to describe the property conveyed, constitutes constructive notice to a subsequent purchaser.

RULE:

            A subsequent purchaser prevails over the original party to an assignment if they had no actual knowledge or constructive notice of the prior assignment due to an inadequate legal definition of the interests being conveyed.

ANALYSIS:

            First off, the court notes their agreement with the Court of Appeals that the original assignment to Tours represented a valid transfer of the Owens interest in the Kufahl lease as between the parties to that instrument. They also agreed that a single instrument, containing specific descriptions of property and lawfully executed, could convey separate tracts of land. Additionally, they agreed that the recording of an assignment in the recorder of deeds office in the specific county, in which the property is located, would give any subsequent purchasers, like Burris, actual notice and knowledge of the owner of the property in question. However, Kansas enacted statutes that obligate the names of both grantors and grantees to be included with respect to particular properties in an index. If Owens included the specific names of the parties and descriptions of the specifically conveyed properties in the original assignment to Tours, the information would have been recorded in the index. In fact, the recorder’s office could not appropriately record anything regarding the assignment of the Kufahl interest due to the inadequate description of the original assignment. The duty of recording such information in the general index is the duty of the register, but they failed to appropriately exercise their duty here due to the lack of an adequate description in the assignment. Likewise, Burris and any other subsequent purchasers could not feasibly acquire actual or constructive notice of the assignment to Tours, which explains why Burris failed to see any information regarding the conveyance when he investigated prior to leasing the Kufahl interest from Owens. Although Kansas courts typically hold in favor of “Mother Hubbard” clauses, the one in question failed to give an appropriate or sufficient description of the parties, property, or even the date of the assignment. Therefore, it failed to give sufficient notice to any other party except the original two parties of the assignment.

CONCLUSION:

            The Supreme Court of Kansas reversed the decision of the Court of Appeals and declared that the subsequent assignment of the Kufahl lease to Burris trumped the original assignment to International Tours, Inc. because of the inadequate description of the conveyed property in the original assignment. In my opinion, the court reached the correct decision. If they upheld such an ambiguous and vague description of conveyed property, lessors would be widely exposed to litigation regarding similar instances and rightful subsequent purchasers of property would be deprived of what lawfully belongs to them.

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