Luthi v. Evans - brief

CASE NAME	Dale A. Luthi and Marcia Luthi, Appellees, v. John R. Evans, and J. R. Burris, Appellees, and International Tours, Inc., a corporation, Appellant
COURT	Supreme Court of Kansas
CITATION, DATE	223 Kan. 622; 576 P.2d 1064; 1978 Kan. LEXIS 262; 61 Oil & Gas Rep. 139. April 1, 1978

PROCEDURAL HISTORY
TRIAL COURT:		APPEAL COURT (for appeal cases only):
PLAINTIFF	Luthi	APPELLANT	International Tours, Inc.
DEFENDANT	Evans and Burris; International Tours, Inc.	RESPONDENT	Luthi; Evans and Burris

DESCRIPTION OF EVENTS
[Note: The Luthis, the original plaintiffs resolved their suit for title at the district court, and are not part of the appeal, which concerns a residual dispute over ownership of oil and gas leases between the initial defendants.] "On February 1, 1971, Grace V. Owens was the owner of interests in a number of oil and gas leases located in Coffey county. On that date Owens, by a written instrument designated "Assignment of Interest in Oil and Gas Leases," assigned to defendant International Tours, Inc. (hereinafter Tours) all of such oil and gas interests." "It is important to note that in the first paragraph of the assignment, seven oil and gas leases were specifically described. Those leases are not involved on this appeal. In addition to the seven leases specifically described in the first paragraph, Owens was also the owner of a working interest in an oil and gas lease known as the Kufahl lease which was located on land in Coffey county. The Kufahl lease was not one of the leases specifically described in the assignment." "The second paragraph of the assignment states that the assignors intended to convey, and by this instrument conveyed to the assignee, "all interest of whatsoever nature in all working interests and overriding royalty interest in all Oil and Gas Leases in Coffey County, Kansas, owned by them whether or not the same are specifically enumerated above . . ." The interest of Grace V. Owens in the Kufahl lease, being located in Coffey county, would be included under this general description." "On January 30, 1975, the same Grace V. Owens executed and delivered a second assignment of her working interest in the Kufahl lease to the defendant, J.R. Burris. Prior to the date of that assignment, Burris personally checked the records in the office of the register of deeds and, following the date of the assignment to him, Burris secured an abstract and title to the real estate in question. Neither his personal inspection nor the abstract of title reflected the prior assignment to Tours."

REMEDY SOUGHT	@

ARGUMENT FOR PLAINTIFF
"Burris maintains that as a result of the omissions and the inadequate description of the interest in real estate to be assigned under the second paragraph of the assignment to Tours, the Tours assignment, as recorded, was not sufficient to give constructive notice to a subsequent innocent purchaser for value."

ARGUMENT FOR DEFENDANT
"It is the position of Tours that the assignment dated February 1, 1971, effectively conveyed from Owens to Tours, Owens's working interest in the Kufahl lease by virtue of the general description contained in paragraph two of that assignment. Tours then contends that the recording of that assignment in the office of the register of deeds of Coffey county gave constructive notice of such conveyance to subsequent purchasers, including Burris. Hence, Tours reasons, it is the owner of Owens's working interest in the Kufahl lease."

COURT OPINION
"At the outset, it should be noted that a deed or other instrument in writing which is intended to convey an interest in real estate and which describes the property to be conveyed as "all of the grantor's property in a certain county," is commonly referred to as a "Mother Hubbard" instrument. The language used in the second paragraph of the assignment from Owens to Tours in which the assignor conveyed to the assignee "all interest of whatsoever nature in all working interests . . . in all Oil and Gas Leases in Coffey County, Kansas," is an example of a "Mother Hubbard" clause. The so-called "Mother Hubbard" clauses or descriptions are seldom used in this state, but in the past have been found to be convenient for death bed transfers and in situations where time is of the essence and specific information concerning the legal description of property to be conveyed is not available." "The parties in this case agree, and the Court of Appeals held, that the second paragraph of the assignment from Owens to Tours, providing that the assignors convey to the assignee all interests in all oil and gas leases in Coffey County, Kansas, owned by them, constituted a valid transfer of the Owens interest in the Kufahl lease to Tours as between the parties to that instrument. We agree." "the issue presented is whether or not 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. " "From a reading of all of the statutory provisions together, we have concluded that the legislature intended that recorded instruments of conveyance, to impart constructive notice to a subsequent purchaser or mortgagee, should describe the land conveyed with sufficient specificity so that the specific land conveyed can be identified." "Again, we wish to emphasize that an instrument which contains a "Mother Hubbard" clause, describing the property conveyed in the general language involved here, is valid, enforceable, and effectively transfers the entire property interest as between the parties to the instrument. Such a transfer is not effective as to subsequent purchasers and mortgagees unless they have actual knowledge of the transfer. If, because of emergency, it becomes necessary to use a "Mother Hubbard" clause in an instrument of conveyance, the grantee may take steps to protect his title against subsequent purchasers. He may take possession of the property. Also, as soon as a specific description can be obtained, the grantee may identify the specific property covered by the conveyance by filing an affidavit or other appropriate instrument or document with the register of deeds."

DISPOSITION OF CASE
"Burris prevailed before the district court. On appeal, the Court of Appeals held the general description contained in the assignment to Tours to be sufficient, when recorded, to give constructive notice to a subsequent purchaser for value, including Burris." "Since Burris had no actual knowledge of the prior assignment from Owens to Tours, the later assignment to Burris prevails over the assignment from Owens to Tours. "Judgment of Court of Appeals reversed and judgment of district court affirmed."

ECONOMIC ANALYSIS

This places the burden for sufficient recording of title on the parties involved in the transaction, not future buyers. They are in the best position to know.