Capitol Federal Savings and Loan Association v. Hoger
Kansas Court of Appeals
917 P.2d 890 (Kan. Ct. App. 1996)
Capitol Federal Savings (plaintiff) recorded a mortgage on the Hogers' (defendants) property in 1984; six years later, Kansas Power and Light sold the Hogers a furnace and air conditioner that became fixtures once installed, financing the purchase with a loan secured by a filed purchase-money security agreement, without Capitol Federal's knowledge. When the Hogers defaulted on both obligations, Capitol Federal sued to foreclose its mortgage, and Western Resources (KPL's successor, defendant) counterclaimed that its security interest in the fixtures had priority over Capitol Federal's earlier mortgage; the trial court agreed with Western and ordered Capitol Federal to pay Western for the fixtures, and Capitol Federal appealed.
Whether a purchase-money security interest in fixtures installed in a home takes priority over a mortgage on the underlying real property that was recorded before the fixtures were purchased and installed.