Luthi v. Evans

Grace Owens and others possessed interests in oil-and-gas leases. On behalf of herself and her co-owners, Owens executed and recorded a document assigning the groups’ interests in the leases to International Tours (Tours) (defendant). The assignment described seven specific leases located in Coffey County, Kansas. The assignment document also contained a Mother Hubbard clause—a clause that conveys all of a grantor’s property in a specific county. That clause conveyed all the assignors’ other lease interests that were located in the county “whether or not the same are specifically enumerated above.” At that time, Owens separately owned an interest in an oil-and-gas lease known as the Kufahl lease that was also located in Coffey County. The Kufahl lease was not one of the seven specifically listed leases. Four years later, Owens assigned her interest in the Kufahl lease to J.R. Burris (defendant). Burris conducted a title search in the county’s deed office and obtained an abstract of title but did not find anything showing that Tours had an interest in the Kufahl lease. Later, both Tours and Burris claimed competing interests in the Kufahl lease. Also, John Evans (defendant) held a royalty interest in the lease. The owners of the Kufahl property, Dale and Marcia Luthi (plaintiffs), filed a lawsuit to cancel the Kufahl lease, which required resolving who held what lease interests. The trial court found that the Mother Hubbard clause had not put Burris on constructive notice that Owens had conveyed the Kufahl lease to Tours. Accordingly, Burris was an innocent purchaser for value, and the lease belonged to him, subject to Evans’s royalty interest. The Kansas Court of Appeals found that Tours owned the lease. Burris appealed to the Kansas Supreme Court.