Luthi v. Evans

Brief Fact Summary. The controversy was between two purchasers who paid for the same oil and gas lease. Both parties claimed rights to the land and a suit ensued to determine if the second purchaser had constructive notice of the purchase by first buyer.

Synopsis of Rule of Law. An innocent subsequent purchaser without constructive notice as to the rights of an initial purchaser will have rights to the land superior to those of the initial purchaser.

Facts. In 1971, Grace Owens, owner of a number of oil and gas leases, executed in writing an assignment of interest in these lease to Defendant, the International Tours (International Tours). The assignment was filed for record in the office of deeds. Four years later, Grace Owens executed a second written assignment to the Defendant, Burris (Burris), regarding oil and gas leases. Burris secured an abstract of title from the deeds office. However, neither his personal inspection nor title reflected the first assignment to International Tours. The controversy on appeal is between International Tours and Burris over ownership of one oil and gas lease. Tours contends the general clause of his assignment conveyed every oil and gas lease in Grace Owen’s possession. Burris claims that although it may have been a valid transfer between the two of them, if failed to give constructive notice to subsequent purchasers. The trial court found for Burris and the appellate court reversed.

Issue. Whether or not the recording of an instrument of conveyance with a general conveyance clause of all of one’s property constituted constructive notice to a subsequent purchaser.

Held. Reversed. The subsequent purchaser, Burris, did not receive constructive notice of International Tours’ rights in the land.
A single instrument, properly executed, acknowledged and delivered can convey separate tracts by specific description and can convey separate tracts by general description as well.
The purpose of a statute authorizing the recording of instruments of conveyance is to impart to a subsequent purchaser notice of instruments, which affect title to a specific tract of land in which the subsequent purchaser may consider buying.
To give the subsequent purchaser constructive notice, the instrument needs to describe the land with sufficient specificity so that the land can be identified.

Discussion. The discussion focused on whether the “Mother Hubbard” clause in the first conveyance was specific enough in description of the land affected to give notice to subsequent purchasers. A “Mother Hubbard” clause is a clause, which intends to convey specific tracts of land, but does so using very general language. The court ruled that it would recognize this clause as legally assigning such land between the grantor and grantee. However the grantee must take steps to properly record using additional documents if necessary so that other subsequent purchasers will have notice.