FILED

United States Court of Appeals

Tenth Circuit

May 4, 2009

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

In the Matter of: JORGE COLON;

ANTOINETTE VALENTINA ORTIZCOLON, a/k/a Toni Ortiz-Colon,

Debtors,

___________________

JAN M. HAMILTON, Trustee,

 Plaintiff - Appellee,

v. No. 07-3313

WASHINGTON MUTUAL BANK

FA,

Defendant - Appellant,

___________________ 

JORGE COLON; ANTOINETTE

VALENTINA ORTIZ-COLON,

 Appellees.

APPEAL FROM THE UNITED STATES BANKRUPTCY 

APPELLATE PANEL FOR THE DISTRICT OF KANSAS

(D.C. NO. KS-07-023)

Thomas M. Franklin, The Franklin Law Firm, Kansas City, Missouri, for

Defendant - Appellant.
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Jan Hamilton, Chapter 13 Trustee, (Teresa L. Rhodd, Staff Attorney, Office of

Chapter 13 Trustee, with her on the brief), Topeka, Kansas, for Plaintiff -

Appellee.

Before MURPHY, Circuit Judge, BRORBY, Senior Circuit Judge, and HARTZ,

Circuit Judge.

HARTZ, Circuit Judge.

A bankruptcy trustee, who acts in the interests of the debtor’s general

creditors, may acquire for the bankruptcy estate a greater right to a debtor’s real

property than the debtor himself had. In particular, if there is a lien on a piece of

property, the bankruptcy estate may take the property free of the lien (that is,

avoid the lien) if the lien would not bind a hypothetical bona fide purchaser (BFP)

of the property from the debtor. On this appeal we must decide whether this rule

permits a trustee to avoid a mortgage on the ground that it misstates the lot

number in its description of the property.

Washington Mutual Bank (the Bank) holds a recorded mortgage on the

house of the Debtors in this case, Jorge Colon Jr. and Antoinette Ortiz-Colon. 

The mortgage recites the correct street address and parcel identification number

for the house but misstates the lot number. The bankruptcy court, affirmed by

this circuit’s Bankruptcy Appellate Panel (BAP), held, applying Kansas law, that

because of this error a purchaser would not be on constructive notice of the
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Bank’s mortgage. It therefore allowed the bankruptcy trustee, Jan Hamilton, to

avoid the mortgage. We disagree and reverse because a purchaser is deemed to

know the contents of recorded documents in the Debtors’ chain of title and, armed

with this knowledge, a reasonably prudent purchaser would readily discover that

the Bank’s mortgage encumbers the Debtors’ house. 

The parties and the courts below were apparently unaware of Bacon v.

Lederbrand, 160 P. 1029 (Kan. 1916), which holds that a purchaser of real estate

in Kansas is deemed to have “notice of the contents of all the prior recorded

deeds and mortgages” in the grantor’s chain of title, id. at 1030 (emphasis added),

not just the contents of the county register’s indices. The purchaser “is

chargeable with notice of the facts appearing upon their face, and also with

knowledge of all facts suggested therein, and which, with the exercise of

reasonable prudence and diligence, he might have ascertained.” Id. (internal

quotation marks omitted). Here, recorded documents in the Debtors’ chain of title

give the same street address and parcel identification number as the Bank’s

mortgage, together with the correct lot number. A recorded Subordination

Agreement also clearly indicates that the Bank’s mortgage is on the same property

as the subordinated second mortgage on the Debtors’ house. We hold that one

exercising “reasonable prudence and diligence,” id., would have determined that

the Bank has a mortgage on the Debtors’ house. Therefore, the mortgage cannot

be avoided by the trustee. 
1

The statute provides, in relevant part: 

(a) The trustee shall have, as of the commencement of the case, and without

regard to any knowledge of the trustee or of any creditor, the rights and powers

of, or may avoid any transfer of property of the debtor or any obligation incurred

by the debtor that is voidable by—

(1) a creditor that extends credit to the debtor at the time of the

commencement of the case, and that obtains, at such time and with respect

to such credit, a judicial lien on all property on which a creditor on a

simple contract could have obtained such a judicial lien, whether or not

such a creditor exists;

. . . 

(3) a bona fide purchaser of real property, other than fixtures, from the

debtor, against whom applicable law permits such transfer to be perfected,

that obtains the status of a bona fide purchaser and has perfected such

transfer at the time of the commencement of the case, whether or not such a

purchaser exists.

11 U.S.C. § 544(a).

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We now summarize the proceedings below. Then we turn to the authority

overlooked in those proceedings, explaining why that authority requires reversal

and distinguishing the cases relied upon by the bankruptcy court, the BAP, and

the trustee. 

I. BACKGROUND

Under 11 U.S.C. § 544(a)1

 a bankruptcy trustee can avoid a mortgage if it

could be avoided by a hypothetical lien creditor or by a hypothetical BFP of the

property. The trustee’s power to avoid transfers under this provision of the

bankruptcy code is known as the “strong arm” power. Morris v. Hicks (In re

Hicks), 491 F.3d 1136, 1140 (10th Cir. 2007); see 5 Collier on Bankruptcy
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¶ 544.02 (Lawrence P. King ed., 15th ed. 2000) (referring to § 544(a) as the 

“strong arm clause”). The status and rights of the hypothetical lien creditor and

BFP are determined by state law. See Watkins v. Watkins, 922 F.2d 1513, 1514

(10th Cir. 1991); Midatlantic Nat’l Bank v. Bridge (In re Bridge), 18 F.3d 195,

200 (3d Cir. 1994). Under Kansas law a BFP—a purchaser for value who has

neither constructive notice, see Beams v. Werth, 438 P.2d 957, 967 (Kan. 1968),

nor actual notice, see Larson Operating Co. v. Petroleum, Inc., 84 P.3d 626, 632

(Kan. Ct. App. 2004), of an encumbrance—takes the property free of the

encumbrance. See Miller v. Alexander, 775 P.2d 198, 202–04 (Kan. Ct. App.

1989). 

After the Debtors filed for relief under Chapter 13 of the Bankruptcy Code,

the trustee filed an adversary proceeding in April 2005 to avoid the Bank’s

mortgage on the Debtors’ house under 11 U.S.C. § 544. That mortgage was

created in 2003 to secure the Debtors’ refinancing of a purchase-money mortgage

on their house at 3317 SW Moundview Drive in Topeka, Kansas. The mortgage

was recorded with the Shawnee County Register of Deeds. It correctly stated the

house’s address and its parcel identification number (which is assigned by the

county clerk and used by the county appraiser for tax purposes). But it also

described the property as Lot 29 in Arrowhead Heights Subdivision No. 5, when 

the correct description is Lot 79 in the subdivision. The trustee based his

avoidance claim on this error in the lot number.
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The Bank filed a motion for summary judgment, which was denied by the

bankruptcy court. The court ruled that the trustee’s avoidance claim turned on

whether he could “prove that the mortgage filed by [the Bank] would not show up

in the chain of title during a reasonable title search in the Office of the Register

of Deeds, and thus that the mortgage, as recorded, was insufficient to provide

constructive notice.” Aplt. App. Vol. I at 153 (Order Setting Mot. for Scheduling

Conference, Feb. 8, 2006). It set a bench trial on that issue. 

At trial the title documents, the facts surrounding the Debtors’ ownership

of the property, and the mortgage history of the property were submitted by

stipulation. The relevant recorded documents show the following: 

1. The 1999 one-page deed by which the Debtors acquired the property

gives the Sellers’ address as 3317 SW Moundview Dr. and contains the

correct lot number for the conveyed property. In text aligned vertically

along the left edge of the page, it states: “Property Address: 3317 SW

Moundview Dr.” Aplt. App. Vol. III at 595.

2. The purchase-money mortgage, filed with the county register one

minute after the deed, describes the property as “LOT 79 [the correct

number], ARROWHEAD HEIGHTS SUBDIVISION NO. 5, which has the

address of 3317 SW MOUNDVIEW DR. . . . .” Id. at 680–81. 

3. A second mortgage on the property, given by the Debtors in May

2001 and recorded on June 1, similarly provides the property’s correct lot
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number and street address; in the property description it also recites “TAX

ID#: 145-150-40-04-003-00-0.” Id. at 694.

4. As previously noted, the mortgage at issue (which was later

transferred to the Bank), filed on April 14, 2003, contains the incorrect lot

number but the correct street address and parcel identification number. It

recites that the mortgage secures “the following described property located

in the COUNTY of SHAWNEE: LOT 29 [not 79], ARROWHEAD

HEIGHTS SUBDIVISION NO. 5, IN THE CITY OF TOPEKA, SHAWNEE

COUNTY, KANSAS. Parcel ID Number: 145-15-0-40-04-003-000 which

currently has the address of 3317 SW MOUNDVIEW DR. Topeka, Kansas

66614.” Id. at 664.

5. Filed a few minutes later is a Subordination Agreement, which

subordinates the second mortgage to the Bank’s mortgage. It contains the

same lot-number error as the Bank’s mortgage. The Agreement describes

the second mortgage as a mortgage “covering property located at 3317 SW

Moundview Dr., Topeka, KS 66614 (‘Property’) recorded on 6/1/2001, as

BOOK: 3508, PAGE: 711 . . .; and [LOT 29, ARROWHEAD HEIGHTS

SUBDIVISION NO. 5 . . .].” (The bracketed language was inserted

through a footnote in the document.) The book and page numbers

accurately refer to the original second mortgage, which recited the correct

lot number. Id. at 696.
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6. The release, filed on May 13, 2003, of the 1999 purchase-money

mortgage contains the correct lot number and lists the Debtors’ mailing

address as 3317 SW Moundview Dr.

The trustee called as a witness the Shawnee County Register of Deeds, who

testified that one could search for documents in her office by book and page

numbers, by a person’s name, and by “legal description,” but not by street

address. Id. at 523. (The term legal description is sometimes used as the label

for a property description by block and lot number in a named subdivision. But

see Black’s Law Dictionary, 913 (8th ed. 1999) (defining legal description: “A

formal description of real property . . . complete enough that a particular piece of

land can be located and identified. . . . The description can be made by reference

to a government survey, metes and bounds, or lot numbers of a recorded plat.”).) 

She did not describe the format of the indices or other search tools available in

her office.

The trustee also submitted an expert report by Kyle Mead, an examining

attorney for a local title-insurance company. Mead opined as follows:

[I]f a reasonable title search was conducted in the office of the

Shawnee County Register of Deeds, based on the proper legal

description of the subject property, which is Lot 79, Arrowhead

Heights Subdivision No. 5, in the City of Topeka, Shawnee County,

Kansas, the mortgage in question would not be found. If a

reasonable title search was conducted in the office of the Shawnee

County Register of Deeds, based on the name of the debtor, which

search would list all mortgages which the debtor had executed, the

mortgage in question would be found, but it would not show that the
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subject property was intended to be encumbered, because the legal

description appearing on the mortgage is Lot 29, Arrowhead Heights

Subdivision No. 5, in the City of Topeka, Shawnee County, Kansas. 

The basis for these opinions is that standard title industry search

procedure is to search using the proper legal description for the

property as the primary identifier. The information used in forming

these opinions is training and experience, and collected experience in

the industry, and as reflected in the Kansas Title Standards

Handbook.

Id. Vol. I at 186.

The Bank called Mead to the stand. He testified that his company does not

search records at the register’s office but images all documents filed with the

register and maintains its own files. Office personnel then extract relevant

information from the document and enter it in the company’s database. Among

the information placed in the database is the property’s street address. He

indicated that the street address is important information for his title-insurance

work and that as a title insurer he would have needed to investigate whether the

Bank’s mortgage was the replacement for the purchase-money mortgage. Thus,

the search he was asked to perform for his report to the trustee was not as

extensive as what he would perform if asked to insure a purchase of the house. 

On cross-examination by the trustee, however, Mead said that he would not

expect a reasonably prudent person to conduct as extensive a search as a title

company performs and that the legal description is “the keystone” for determining

the location of real estate because it is more stable than a street address or parcel
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identification number. Id. Vol. III at 580. He added that using street addresses

and parcel numbers as “the standard” would create problems for title companies

because they are not “uniform.” Id. at 581. Mead also reiterated the essence of

the first of the above-quoted paragraphs of his report. With respect to the second

quoted paragraph, he conceded on direct examination by the Bank that the Kansas

Title Standards Handbook, a title-industry manual, does not provide guidance on

how to conduct a title search, and he could not point to any Kansas statute that

gives priority to a “legal description” (by block and lot numbers) over any other

form of description of the property. No other witnesses testified.

The Bank contended that the trustee was charged with constructive notice

of its mortgage. It argued that because the mortgage document identified the

Debtors as mortgagors and identified the property by its street address and parcel

identification number, and because Kansas constructive-notice law requires only

that the property description be sufficient to identify the property, a purchaser

would be on notice that the Debtors’ house was the property intended to secure

the mortgage. It also argued that Kansas law requires a purchaser to examine the

contents of recorded documents in a property’s chain of title and that the other

mortgage documents affecting the property were sufficient to put a purchaser on

constructive notice: 

Consideration of the street address and parcel identification number,

and the Mortgage as the last in the chain of title of a series of

succeeding mortgages that had included a legal description using
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Lot 79 would compel a reasonable purchaser to draw the conclusion

that the Mortgage was given on Lot 79 at 3317 SW Moundview

Drive, or to ask more questions about what property the mortgage

covered. 

Id. Vol. I at 294. 

The trustee countered that a reasonable search of the records kept by the

Shawnee County Register of Deeds would not put a purchaser on notice of the

Bank’s lien on the Debtors’ house. A search for Lot 79 (the correct lot number)

in the numerical index for the tract would not turn up the mortgage, he contended,

and a grantor-index search under the Debtors’ names would show the Bank’s

mortgage to encumber a different lot (Lot 29). Further, because the register of

deeds does not index documents by street address or parcel identification number,

the Bank’s theory that these descriptions should provide constructive notice

would “upset the title standards of the state” and require “extraordinary searches”

to ensure good title. Id. Vol. III at 519.

The bankruptcy court ruled in the trustee’s favor. See Hamilton v. Wash.

Mut. Bank, FA (In re Colon), 376 B.R. 22 (Bankr. D. Kan. 2007). It found that

“[r]ecords maintained by the Register of Deeds reflect that this mortgage was

indexed . . . with records relating to Lot 29.” Id. at 25. Although it “was

properly cross-indexed in the grantor index under Debtors’ last name[,] . . . [a]

review of the grantor index would have shown that grantors—the Colons—had
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previously granted a mortgage on a different lot in the same subdivision, in

Topeka—Lot 79.” Id. The court defined the issue as whether a purchaser 

would have been put on constructive notice of [the Bank’s] mortgage

given the defective legal description . . . . [T]he Court must decide,

under the facts of this case, what steps a “reasonably cautious

person” would take to obtain good title, including whether a BFP is

required to search beyond the grantor/grantee index and physically

peruse the text of the underlying instrument . . . to determine if the

legal description is correct and, even if such a duty exists, whether

the review of the mortgage would have put the Trustee on

constructive notice of the mortgage against this particular piece of

property.

Id. at 26. The court later explained that a reasonable person need not undertake

the search that would be performed by a title examining company, which has

greater expertise, resources, and exposure to liability than an ordinary person. Id.

at 27. 

The bankruptcy court described Kansas case law as stating that

“[s]ubsequent purchasers are charged with constructive notice of the presence and

contents of recorded interests in land . . . if the interest is sufficiently described,”

id. (internal quotation marks omitted), and that “[c]onstructive notice is implied

‘when it consists of knowledge of facts so informing that a reasonably cautious

person would be prompted to inquire further.’” Id. (quoting Miller, 775 P.2d at

204). It emphasized language in Luthi v. Evans, 576 P.2d 1064 (Kan. 1978), that

the purpose of the recording statutes is to give subsequent purchasers “notice of

instruments which affect the title to a specific tract of land in which the
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subsequent purchaser is interested at the time,” and that a property description is

adequate “if it identifies the property or affords the means of identification within

the instrument itself or by specific reference to other instruments recorded in the

office of the register of deeds.” Id. at 1070 (quoted in In re Colon, 376 B.R. at

28).

The court placed its principal reliance, however, on Hollinger v. Imperial

Warehouse Co., 253 P. 215 (Kan. 1927), whose facts it called “fairly similar to

ours.” In re Colon, 376 B.R. at 28. The property-description error in that case

arose from confusion between two additions to the City of Wichita that had been

laid out and platted by a Mr. English. One addition was English’s addition; the

other was English’s Fifth addition. The Kansas Supreme Court held that a

mortgage describing the subject property as lot 26 of English’s addition, rather

than correctly describing it as lot 26 of English’s Fifth addition, did not impart

constructive notice. Even if the defendant in the case, “or the abstracter as [his]

agent,” had a duty to search the contents of the mortgage because of the common

grantor, “an examination of the record of the mortgage at length would have

disclosed that it purported to be a lien upon another lot in another addition . . . ,

and did not purport to be a lien upon the lot the title to which they were then

searching.” Hollinger, 253 P. at 217. Nothing in the mortgage “would cause an

examiner of the record of the title to lot 26 . . . [of] English’s Fifth addition . . . to
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suspect that the mortgage was intended to be a lien upon this lot.” Id. The

bankruptcy court followed Hollinger: 

[I]t is clear that had a BFP examined the index kept under the legal

description for Lot 79 of Arrowhead Heights subdivision, it would

not have found [the Bank’s] mortgage (in Lot 79) recorded under Lot

29 of the same subdivision. Even if a bona fide purchaser (the

Trustee, here) had somehow become aware of the existence of the

mortgage on Lot 29 (by looking at grantor indices, for example), and

had chosen to examine the actual mortgage, nothing in that mortgage

would have informed the purchaser that the Colons did not also own

Lot 29 in Arrowhead Heights subdivision, or that the recorded

mortgage contained any error. 

In re Colon, 376 B.R. at 29–30.

The court rejected the Bank’s argument that the presence of the correct

street address and parcel identification number in the mortgage would suffice for

notice. Because the register of deeds does not index recorded instruments using

either of those identifiers, the court reasoned, there would be no way to crosscheck other records on that basis—even if there were a duty to cross-check other

records, a question the court thought it unnecessary to decide.

The bankruptcy court distinguished Hildebrandt v. Hildebrandt, 683 P.2d

1288 (Kan. Ct. App. 1984). The deed at issue in Hildebrandt misstated the

section number, but the correct number appeared in the metes-and-bounds

description later in the document, as did the name “Hildebrandt Island,” which

encompassed the property. Taken together, this information “afford[ed] a

reasonably certain and sufficient means of identification within the deed itself for
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identifying the property conveyed.” Id. at 1290. The bankruptcy court said that

Hildebrandt was inapposite because “nothing within the four corners of the

[Bank’s mortgage] . . . would put an innocent purchaser researching the title to

this property on notice that he needed to check further.” In re Colon, 376 B.R. at

31. 

Finally, the court rejected the Bank’s argument that the Subordination

Agreement provided constructive notice, stating that the agreement misidentified

the mortgaged property as Lot 29 “and was also erroneously recorded under Lot

29.” Id. 

The bankruptcy court therefore held that because of the mortgage’s error in

the lot number, a subsequent purchaser would not be on constructive notice of the

mortgage under Kansas law, and the trustee could avoid the mortgage as a

hypothetical BFP under § 544(a)(3) or as a hypothetical lien creditor under

§ 544(a)(1). 

The Bankruptcy Appellate Panel affirmed, adopting the bankruptcy court’s

reasoning that the mortgage’s erroneous lot number precluded constructive notice

to a purchaser. See Hamilton v. Wash. Mut. Bank, FA (In re Colon), 376 B.R. 33

(B.A.P. 10th Cir. 2007). It held, however, that because the bankruptcy court’s

decision under § 544(a)(3) was correct, there was no need to review its decision

with respect to § 544(a)(1). Id. at 37.

II. DISCUSSION
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 “[W]e treat the BAP as a subordinate appellate tribunal whose rulings are

not entitled to any deference (although they certainly may be persuasive). We

review matters of law de novo, and with respect to factual findings (which are

made only by the bankruptcy court, not the BAP), we review for clear error.” 

Mathai v. Warren (In re Warren), 512 F.3d 1241, 1248 (10th Cir. 2008).

Resolution of this appeal requires us to determine to what extent a

purchaser is put on notice of the contents of title documents properly filed with a

county register of deeds in Kansas. The applicable Kansas statute, originally

enacted in 1868, would appear to state that one is on notice of the contents of

every properly filed document. Kan. Stat. Ann. § 58-2222 (2005) states: 

Every such instrument in writing [conveying an interest in land],

certified and recorded in the manner hereinbefore prescribed [that is,

by a county register of deeds under Kan. Stat. Ann. § 58-2221], shall,

from the time of filing the same with the register of deeds for record,

impart notice to all persons of the contents thereof; and all

subsequent purchasers and mortgagees shall be deemed to purchase

with notice.

But no one could be expected to read every document filed with the county

register. Accordingly, the Kansas statutes provide for indexing. Two indices are

required by Kan. Stat. Ann. § 19-1205 (2007) for every filed instrument: one lists

the instruments in alphabetical order by the name of each grantor, see id.

§ 19-1205(a); the other is an alphabetical index by the name of each grantee, see

id. § 19-1205(b). In addition, counties have the option (which the great majority

of counties have exercised) to provide numerical indices of instruments of
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conveyance, generally one index for each quarter section. See id. §§ 19-1209,

19-1210 (2007); Miller, 775 P.2d at 204. 

The requirement of grantor and grantee indices is unsurprising because the

standard method for title searches has long been to examine the chain of title. A

“vendor’s chain of title” is “the chain of recorded conveyances made to the

successive holders of the record title and those made by them while respectively

the holders thereof.” IV A. James Casner et al., American Law of Property

§ 17.17 at 591 (1952). A chain-of-title search for a property confirms (or

disproves) the right of the purported owner to transfer an interest in the property. 

The searcher first constructs a chain of grantors of the property, using the grantee

index to find the deed to the purported owner from a prior grantor, returning to

the grantee index to find the deed to that prior grantor from an earlier grantor, and

continuing that process for an appropriate period of time. The searcher then uses

the grantor index to find all conveyances by each grantor during the period of the

grantor’s ownership of the property and examines each conveyance to determine

whether the property conveyed is the property of interest. See id. at 590–91; id.

§ 18.1 at 656–57 n.3; James Karp & Elliot Klayman, Real Estate Law 424 (6th ed.

2006) (“Any conveyance in the grantor index during [the period of the grantor’s

ownership] must be checked to see whether it affects the concerned parcel.”);

Harry M. Cross, The Record “Chain of Title” Hypocrisy, 57 Colum. L. Rev. 787,

788–89 (1957) (description of chain-of-title search); Francis S. Philbrick, Limits
2

We can ignore for present purposes the complications that arise from

transfers of property by will, tax sale, etc.

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of Record Search and Therefore of Notice, 93 U. Pa. L. Rev. 125, 173 (1944)

(disagreeing with the implicit view of Tiffany, The Law of Real Property (2d ed.

1920), that every deed from a grantor in the chain of title must be examined “in

extenso,” and instead suggesting that the examination of the deed can be limited

to “the description of the land,” unless the described land is the property of

interest). The conveyances in the chain of title must then be thoroughly

examined. “[T]he law assumes that a prudent purchaser would inspect [records in

the grantor’s chain of title] and treats him on the basis of his having knowledge of

their contents.” Casner, supra, at 589; see Cross, supra, at 789 (requiring “study

of the transactions . . . discovered [through the indices]”).2

 

Such a chain-of-title search, however, is an imperfect means of determining

all potential claims to a property. The register of deeds may have made an

indexing error, yet the erroneously indexed instrument might still be deemed to

provide constructive notice. See Luthi, 576 P.2d at 1070 (“[I]n situations where

an instrument of conveyance containing a sufficient description of the property

conveyed is duly recorded but not properly indexed, the fact that it was not

properly indexed by the register of deeds will not prevent constructive notice

under the provisions of K.S.A. 58-2222.”). Also, such a chain-of-title search may

totally miss a parallel chain of title to the property (under which someone claims
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title through a grantor not in the chain of title to the vendor); and there may be

technical problems caused by delayed filings of instruments in the chain of title

(as when a deed to a grantor is recorded after recording of the deed from the

grantor), see Cross, supra, at 793–94. In addition, some authorities have

complained of the time and effort required for this type of search, see Paul E.

Basye, Clearing Land Titles 63–64 (2d ed. 1970), although computerization

should ameliorate the difficulty. In any event, other indices, such as the

numerical index authorized by Kansas law, provide a useful supplement to catch

title defects not found in a chain-of-title search.

The critical question before us is what do the Kansas courts expect a

purchaser to know from using the grantor and grantee indices. (Although a

purchaser may be expected to know further information from the use of other

indices, we need not address that issue to resolve this appeal.) There are two

components to this question. First, what is the purchaser deemed to know about

the contents of the documents referenced in the index? Second, what is the

purchaser’s duty to make additional inquiry (from which further knowledge is

acquired) based on what is deemed known about the contents?

We begin with the first question: what is the purchaser deemed to know

about the contents of documents referenced in the grantor and grantee indices? 

Because of the Kansas statutory requirement of grantor and grantee indices, it

would be natural to conclude that even if Kan. Stat. Ann. § 58-2222 should not be
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read literally as providing constructive notice of the contents of every properly

filed instrument, there is at least constructive notice of the contents of every

instrument in the chain of title. The Kansas Court of Appeals essentially reached

this conclusion in Wichita Great Empire Broadcasting, Inc. v. Gingrich, 604 P.2d

281 (Kan. Ct. App. 1979). Addressing a claim of professional negligence against

an abstracter, the court said that the abstracter must examine the filed instrument

rather than rely on the description in an index (in that case, a judgment docket

that misdescribed a release as a total release rather than a partial release). See id.

at 282–83. It cited authority relating to recording of conveyances (as well as

judgment liens) and noted that “[i]n other jurisdictions, relying on the index

rather than going to the original instrument has been held to be negligence as a

matter of law,” id at 282, and it quoted with approval an encyclopedia stating that

“failure to examine the original records is negligence as a matter of law.” Id. at

283 (internal quotation marks omitted)). The court also indicated approval of a

Nebraska opinion stating that an abstracter cannot rely on a numerical index to

the exclusion of the grantor and grantee indices. See id. (citing Crook v. Chilvers,

157 N.W. 617 (Neb. 1916)). In addition, the court affirmed the trial court’s

exclusion of the abstracter’s evidence of common practice in his profession

because the evidence was not pertinent, thus making clear that the legal standard
3

For the same reason, we hold that the expert report and testimony by Kyle

Mead were legally irrelevant. Moreover, his report and testimony were so

constrained by artificial restrictions that we doubt that they were admissible proof

of industry practice in any event, and Mead was hardly qualified to give expert

testimony on the reasonableness of a title search by a nonprofessional.

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was not to be determined on the basis of what professionals think is appropriate. 

Id. at 283–84.3

 

Bacon v. Lederbrand, 160 P. 1029 (Kan. 1916), an opinion overlooked by

the courts below and by the parties, confirms the view that purchasers are deemed

to know the contents of recorded documents in the chain of title. W. M. Dickson

contended that he had acquired title to certain property free of a $1,750 mortgage

from M. C. Schaeffer to W. E. Bacon. The mortgage was executed on August 3,

1913, but not recorded until February 9, 1914, after conveyance of the land from

Schaeffer to A. R. Rhine, and then from Rhine to Dickson in a deed recorded on

January 20, 1914. Because the mortgage was filed after Dickson had acquired

title, this filing did not put Dickson on notice of the mortgage and ordinarily

Dickson’s interest in the property would therefore not be subject to the mortgage. 

But the court held that his interest was nevertheless subject to the mortgage

because the mortgage had been referred to in a document in his chain of title. 

The deed from Schaeffer to Rhine contained the following language: 

Same to be free and clear of all incumbrance except one first

mortgage of twenty-five hundred dollars ($2,500) and interest at the

rate of 6% from Mch. 3rd, 1913, and a second mortgage of seventeen

hundred and fifty dollars ($1,750) due Jan. 1st, 1914 which said

second party assumes and agrees to pay.
-22-

Id. at 1030 (emphasis added). The court held that Dickson was on notice of the

recital in the deed to Rhine (Dickson’s grantor) because the notice provided by

the statute is “notice of the contents of all the prior recorded deeds and

mortgages.” Id. (We assume that the word prior, rather than referring to every

previously filed document, referred only to those documents in the chain of title.) 

In other words, in answer to the first question regarding notice, a purchaser is

deemed to know the contents of every recorded document in the vendor’s chain of

title. The purchaser therefore must examine the full contents of the documents in

the chain of title. No index entry of Schaeffer’s deed to Rhine would have

disclosed the mortgage referred to in the deed (after all, the document would be

indexed as a deed not a mortgage), and its mention of the mortgage would not be

found unless one read beyond the description of the property in the deed. 

Bacon also answers the second question posed above—what is the

purchaser’s duty to make additional inquiry based on what is deemed known

about the contents of recorded documents? Bacon said that the purchaser is not

only “chargeable with notice of the facts appearing upon the[] face [of the title

papers],” but “also with knowledge of all facts suggested therein, and which, with

the exercise of reasonable prudence and diligence, he might have ascertained.” 

Id. (internal quotation marks omitted). Thus, the court ruled against Dickson

because once he saw the mention of the mortgage in the deed to Rhine, “[i]nquiry

of his grantor and at least of his grantor’s grantor would have revealed this $1,750
-23-

unrecorded mortgage.” Id. We infer from Bacon the general rule that if a

document in the chain of title suggests a substantial problem, the purchaser must

make reasonable inquiry. Bacon is still good law. We note that the statute

construed in Bacon had the same wording as present-day Kan. Stat. Ann.

§ 58-2222; and no subsequent published Kansas opinion has questioned Bacon.

One question that may arise is whether a particular conveyance is in the

chain of title. The answer is important because constructive notice is limited to

the contents of conveyances in the chain of title. If, for example, the search of

the grantor index leads to a deed by the grantor of an entirely different piece of

property from the one being purchased, the purchaser is not on constructive notice

of the contents of that deed. But the purchaser must examine each conveyance

from a grantor (during the period of the grantor’s ownership of the property of

interest) to determine whether it is in the chain of title. Apparently such an

examination is generally required in conducting a title search. See, e.g., Karp &

Klayman, supra at 424 (“Any conveyance in the grantor index during [the period

of the grantor’s ownership] must be checked to see whether it affects the

concerned parcel.”); Philbrick, supra at 174. And we understand Kansas law to

be the same. Gingrich held that notations in an index cannot be relied upon and

that “the abstractor has a duty to examine the original records.” 604 P.2d at 283

(judgment docket misstated that a partial release of a judgment was a full

release); cf. Luthi, 576 P.2d at 1070 (“[I]n situations where an instrument of
-24-

conveyance containing a sufficient description of the property conveyed is duly

recorded but not properly indexed, the fact that it was not properly indexed by the

register of deeds will not prevent constructive notice under the provisions of

K.S.A. 58-2222.”). 

Moreoever, when examining a conveyance to determine whether it is in the

chain of title, the purchaser must exercise proper care. In Hildebrandt the

hypothetical purchaser was not entitled to stop the examination of the deed as

soon as he saw that the property was described as being in a section other than the

section of interest; the court found that a purchaser would be on notice of the

additional information contained in the metes-and-bounds description, which

provided the correct section number. See Hildebrandt, 683 P.2d at 1290. As

Miller stated: “[N]otice is implied when it consists of knowledge of facts so

informing that a reasonably cautious person would be prompted to inquire further

. . . . If a possible cloud on the seller's title appears, the prospective purchaser

must either clear the cloud or proceed at his own risk.” 775 P.2d at 204 (internal

quotation marks omitted). The knowledge that the purchaser is deemed to possess

includes the contents of conveyances that are clearly in the chain of title. The

purchaser is “chargeable . . . with knowledge of all facts suggested [by chain-oftitle documents], and which, with the exercise of reasonable prudence and

diligence, he might have ascertained.” Bacon, 160 P. at 1030. Consequently, a

purchaser must take reasonable and prudent steps to determine whether a
-25-

conveyance is in the grantor’s chain of title when the full description of the

property in the conveyance, together with the contents of the instruments in the

chain of title, create a reasonable possibility that it is. 

We now turn to the specifics of the case before us to determine the extent

of constructive notice to a purchaser of the Debtors’ house. Application of the

above law will make it clear that such a purchaser was on notice that the Bank

had a mortgage on the house, or, at the least, that he needed to make inquiry

regarding whether the Bank’s mortgage burdened the house. 

To begin with, a purchaser would be on notice of the contents of every

recorded instrument in the chain of title to the property. These instruments

undoubtedly include the following documents that recite the correct lot number:

(1) The 1999 deed of the house to the Debtors, which recites the correct

lot number and recites the house’s street address along the document’s left

margin (and lists the same address a second time as the Sellers’ mailing

address).

(2) The Debtors’ purchase-money mortgage on their house, which

burdens “the following described property located in SHAWNEE County,

Kansas: LOT 79, ARROWHEAD HEIGHTS SUBDIVISION NO. 5 IN THE

CITY OF TOPEKA, SHAWNEE COUNTY, KANSAS, which has the

address of 3317 SW MOUNDVIEW DR., TOPEKA, Kansas 66614.” Aplt.

App. Vol. III at 680–81. 
-26-

(3) The second mortgage, filed in Book 3508, page 711, whose

description of the property likewise includes not only Lot 79 in Arrowhead

Heights Subdivision No. 5, but also the street address and “TAX ID

# 145-150-40-04-003-00-0.” Id. at 688, 694.

(4) The release of the purchase-money mortgage, which provides the

correct lot number and also gives 3317 SW Moundview Dr. as the Debtors’

mailing address. 

A prospective purchaser of the Debtors’ house, knowing that he is charged

with knowledge of the contents of every recorded instrument in the Debtors’

chain of title, would examine these four documents and learn that the Debtors’

house (1) is at 3317 SW Moundview Dr. and (2) has parcel identification number

145-150-40-04-003-00-0. His review of the grantor and grantee indices would

also disclose the existence of the Bank’s mortgage. He would then review it to

see whether it is in the Debtors’ chain of title to their house—in other words,

whether it is a mortgage on the Debtors’ house. The purchaser’s examination

would produce conflicting signals. The mortgage is on Lot 29, whereas the

Debtors’ house is at Lot 79. But the mortgage states (1) that it is on property at

3317 SW Moundview Dr.—the address of the Debtors’ house; and (2) that it is on

property with parcel identification number 145-150-40-04-003-00-0—the number

for the Debtors’ house. We cannot imagine a reasonably prudent purchaser who
4 The bracketed text was incorporated into the quoted paragraph through a

placeholder asterisk and corresponding footnote.

-27-

would not recognize that a problem exists, make inquiry, and ascertain that the

Bank’s mortgage has an inadvertent error in the lot number. 

Equally compelling is the notice provided by the Subordination Agreement. 

The purpose of the agreement is to make the second mortgage on the Debtors’

house, which was subordinate to the purchase-money mortgage, likewise

subordinate to the Bank’s mortgage on the refinancing loan to the Debtors. One

recital in the agreement accurately references, by book and page numbers in the

register’s records, the second mortgage itself (which has the correct lot number,

as well as the correct street address and parcel identification number) but the

recital makes the same error in the lot number as the Bank’s mortgage:

WHEREAS, Jorge Colon (“Borrower”), whether one or more,

executed a note in the original principal sum of $30,000.00 dated

5/11/2001, secured by a deed of trust or mortgage of even date

therewith in favor of GUARANTY NATIONAL BANK OF

TALLAHASSEE covering property located at 3317 Sw Moundview

Dr. Topeka, KS 66614, (“Property”) recorded on 6/1/2001, as

BOOK: 3508, PAGE: 711, in Official Records of said County; and

[LOT 29, ARROWHEAD HEIGHTS SUBDIVISION NO. 5, IN THE

CITY OF TOPEKA, SHAWNEE COUNTY, KANSAS].4

Aplt. App. Vol. III at 696. Two other recitals accurately reference the Bank’s

mortgage by book and page numbers and state that the loan underlying the

mortgage was conditional on the second mortgage being subordinated to the

Bank’s mortgage:
5 The pertinent portion of the agreement provides:

WHEREAS, it is to the mutual benefit of the Borrower, New Lender and

Subordinating Lender that New Lender make such New Loan to Borrower;

and Subordinating Lender is willing that the deed of trust or mortgage

securing same shall, when recorded, constitute a lien or charge upon said

land which is unconditionally prior and superior to the lien or charge held

by Subordinating Lender; 

NOW, THEREFORE, in consideration of the mutual benefits accruing to

the parties hereto and other valuable consideration, the receipt and

sufficiency of which is hereby acknowledged, and in order to induce New

Lender to make the New Loan, it is hereby declared, understood and agreed

as follows:

1. The deed of trust or mortgage securing the New Loan in favor

of New Lender, and any renewals or extensions thereof, shall

unconditionally be and remain at all times a lien or charge on

the Property, prior and superior to Subordinating Lender’s lien

or charge.

2. New Lender would not make its New Loan without this

Agreement.

3. This Agreement shall be the whole and only agreement with

regard to the subordination of the Subordinating Lender’s lien

(continued...)

-28-

WHEREAS, Borrower has executed, or is about to execute, a deed of

trust or mortgage and note not to exceed the sum of $83,675.00

(“New Loan”) in favor of _______ (“New Lender”); and recorded in

Book 3807 Page 344; and 

WHEREAS, New Lender is willing to make the New Loan provided

the deed of trust or mortgage securing same is a lien or charge upon

the Property prior and superior to the lien or charge of the deed of

trust held by Subordinating Lender, and provided that Subordinating

Lender will specifically and unconditionally subordinate its lien to

the lien or charge of the deed of trust or mortgage in favor of New

Lender; 

Id. The Subordination Agreement then recites that the holder of the second

mortgage is willing to subordinate that mortgage to the Bank’s mortgage and

agrees to do so.5

 
5

(...continued)

or charge to the New Lender’s lien or charge.

Aplt. App. Vol. III at 696–97. 

-29-

We can summarize the above as follows: First, although the Subordination

Agreement states the incorrect lot number, it undoubtedly is in the Debtors’ chain

of title because it governs the second mortgage on the Debtors’ house, which it

references unambiguously by book and page numbers in the county register’s

records. Cf. Luthi, 576 P.2d at 1070 ( “A description of the property conveyed

should be considered sufficient if it identifies the property or affords the means of

identification within the instrument itself or by specific reference to other

instruments recorded in the office of the register of deeds.” (emphasis added)). 

Second, the mortgage to which the second mortgage is subordinated by the

agreement is undoubtedly the Bank’s mortgage, again referenced unambiguously

by book and page numbers, necessarily implying that the Bank’s mortgage and

the second mortgage are on the same property—namely, the Debtors’ house. (A

subordination agreement would be unnecessary if the two mortgages burdened

distinct pieces of property.) Again, no reasonably prudent person could fail to see

the cloud on the title created by the Bank’s mortgage and make further inquiry. 

Thus, a purchaser would be on constructive notice that the Bank’s mortgage

encumbered the Debtors’ house. See United States v. Smith (In re Hagendorfer),

803 F.2d 647 (11th Cir. 1986) (proper examination of chain of title would have
-30-

revealed error in mortgage’s property description—an incorrect township

number—when deed to debtor contained the same error); Gresham v. Am.’s

Servicing Co. (In re Gresham), 373 B.R. 914, 921 (Bankr. W.D. Mo. 2007)

(bankruptcy trustee had constructive notice of trust deed despite single-character

mistake in block number of property description because (1) instrument gave

property’s correct street address and (2) prior trust deed and subordination

agreement gave both the correct street address and correct block number); see

also Reiber v. Option One Mortgage Corp. (In re Hojnoski), 335 B.R. 282, 289

(Bankr. W.D.N.Y. 2006) (trustee had constructive notice because a title searcher

would “see that there was no predicate document of conveyance . . . indicating

that the Debtor had any interest in [the misidentified] real property . . . so that it

would be reasonable for that searcher to question whether there was an indexing

error.”). But cf. Chase Manhattan Mortgage Corp. v. Bird (In re Hiseman), 330

B.R. 251 (Bankr. D. Utah 2005) (no constructive notice when legal description

was incorrect even though street address and tax parcel identification number

were correct; but opinion makes no mention of whether any conveyance in chain

of title describes property by street address or identification number); Stubbins v.

Am. Gen. Fin. Servs., Inc. (In re Easter), 367 B.R. 608 (Bankr. S.D. Ohio 2007)

(same). 

Because the recorded documents in the Debtors’ chain of title defeat the

trustee’s claim that a BFP could avoid the Bank’s mortgage, we need not address
-31-

the Bank’s argument that notice is provided simply by the correct street address

and parcel identification number in the mortgage itself. 

The Kansas authorities relied upon by the trustee are not to the contrary. 

Neither of them concerned an instrument with a correct, as well as incorrect,

description of the property. In Luthi the Kansas Supreme Court dealt with a

Mother Hubbard clause, in which there is no description of the property. The

conveyance at issue in Luthi purported to transfer to the appellant, Tours, “all

interest of whatsoever nature in . . . Oil and Gas Leases in Coffey County,

Kansas, owned by [the grantors] whether or not the same are specifically

enumerated above.” 576 P.2d at 1067 (internal quotation marks omitted). In

another paragraph the instrument described several specific leasehold interests of

the grantors in that county. Four years later the grantors conveyed their interest

in a lease within Coffey County, known as the Kufahl lease, to the appellee,

Burris. Id. The Kufahl lease was not among those specifically described in the

conveyance to Tours. The question thus was whether Burris had constructive

notice of Tours’s interest in that lease by dint of the Mother Hubbard clause. 

Reading the conveyance and recording statutes together, the court ruled that a

deed, to provide notice, must “describe the premises.” Id. at 1070. Because a

Mother Hubbard clause does not satisfy that requirement, it does not provide

notice under Kan. Stat. Ann. § 58-2222. The court acknowledged the utility of
-32-

Mother Hubbard clauses in emergency situations, such as death-bed transactions,

but urged prompt recording of specific descriptions as soon as possible thereafter.

Hollinger is closer in point because the mortgage at issue misdescribed the

property. It placed the property on Lot 26 of English’s addition instead of Lot 26

of English’s Fifth addition. Holding that there was not constructive notice of the

mortgage, the court quoted a legal encyclopedia as stating that ordinarily “an

instrument giving a wrong range or block number . . . would not be in line of

title.” Hollinger, 253 P. at 218 (internal quotation marks omitted). But it also

quoted the encyclopedia as saying that “[i]f the record of an instrument

containing a defective description of the property is sufficient to put those who

see it on an inquiry which, duly prosecuted, would disclose the true facts, the

recorded instrument is notice to subsequent purchasers.” Id. (internal quotation

marks omitted). And it said nothing regarding an instrument that contained both

correct and incorrect descriptions; nor did it consider the possible connection

between descriptions in the instrument at issue and descriptions in instruments

clearly in the chain of title, as in this case. 

More relevant to the matter before us is the Kansas Court of Appeals

decision in Hildebrandt. The description in a deed of the land in question first

gave the location as Section 24 but later in the metes-and-bounds description

correctly gave the section number as 34. See Hildebrandt, 683 P.2d at 1290. In
-33-

addition, the deed described the tract as Hildebrandt Island. The court held that

the recorded deed provided constructive notice. 

Although the situation in Hildebrandt differs from the one here in that the

Bank’s mortgage does not contain a correct lot number in addition to the incorrect

number, the mortgage does have two correct descriptions of the property—the

street address and parcel identification number. Moreover, those two identifiers

appear in the property description in instruments that (because they recite the

correct lot number) are undoubtedly in the chain of title. Armed with that

information, together with the recitals in the Subordination Agreement (which

contains unambiguous references to both the second mortgage and the Bank’s

mortgage by book and page numbers), it would require only common sense to

determine that the Bank had a mortgage on the Debtors’ house.

In sum, a purchaser of the Debtors’ house would be on constructive notice

that the Bank’s mortgage created a lien on that property or, at the least, a

purchaser would be on constructive notice of facts that would require a

reasonably prudent person to investigate and then determine that the Bank’s

mortgage burdened the property. Therefore, the trustee cannot avoid the

mortgage under 11 U.S.C. § 544(a)(3). 

We also set aside the bankruptcy court’s holding that the trustee could

avoid the Bank’s mortgage under 11 U.S.C. § 544(a)(1), which gives the trustee

the same avoidance rights as a judgment-lien creditor. The court rested that
-34-

holding on the same reasoning as its decision under § 544(a)(3)—namely, that the

lot-number error in the Bank’s mortgage precluded constructive notice. Because

we have rejected that foundation for the § 544(a)(1) ruling, that ruling can no

longer stand. We additionally note, however, that it is questionable whether

Kansas law gives judgment creditors the same rights as a BFP. See Swarts v.

Stees, 2 Kan. 236 (1864) (judgment lien is inferior to recorded mortgage that

recites incorrect quarter section); 1 Carroll G. Patton & Joyce D. Palomar, Patton

and Palomar on Land Titles § 15 (3d ed. 2002)

III. CONCLUSION

We REVERSE the decisions of the Bankruptcy Appellate Panel and the

bankruptcy court and remand to the bankruptcy court to enter judgment in favor

of the Bank on the trustee’s action to avoid the mortgage lien and to take any

further action necessary to protect the Bank’s interest.