JEFFERY HOPKINS, Bankruptcy Judge
I. Introduction
In this adversary proceeding, the chapter 7 trustee seeks a declaratory judgment fixing the existence or non-existence of any right to proceeds from the sale of real property which had been held jointly by the debtor and her estranged husband who is not a debtor in this proceeding. The property was classified as registered land under Ohio law and the mortgagee failed to provide notice of the mortgage on the certificate of title as required by O.R.C. § 5309.93. The sole issue remaining concerns whether the mortgagee is entitled to the portion of the proceeds that represents the non-debtor husband's co-owned interest to the property.
II. Facts
The parties in this dispute have stipulated to the material facts (Doc. 40). The debtor ("Mrs. Campbell") and her husband ("Mr. Campbell"), on December 16, 1999, purchased a residence located at 10570 Winding Way, Harrison, Ohio 45030. The property in question consists of a single family dwelling which sits atop registered land under Ohio law. To finance the purchase, the Campbells executed a note payable to Associates Financial Services Company ("Associates"). As security for the note they also executed a mortgage in favor of Associates. The mortgage was properly delivered and recorded in the Recorder's Office for Hamilton County, Ohio. However, Associates failed to note its mortgage interest to the registered land on the certificate of title in accordance with O.R.C § 5309.93, rendering the mortgage ineffective against bona fide transferees of the property.
Exhibit C to the Complaint states that Travelers Home Mortgage is the successor in interest to Associates Finance Services Company, Inc. Hence, Travelers appears as the named Defendant in the caption of the case.
On October 12, 2001, Mr. Campbell filed for Chapter 7 bankruptcy relief. He listed his one half interest in the registered land as an asset, and named Associates as the secured creditor on the property. The trustee in Mr. Campbell's case overlooked Associates' failure to note its interest on the property's certificate of title. See In re Steve F. Campbell, Case No. 01-17599 (Aug, J.). As the result, the trustee in Mr. Campbell's case did not challenge Associates' status as a secured creditor on the property. Mr. Campbell was later granted a discharge under chapter 7 on January 23, 2002.
On March 20, 2002, Mrs. Campbell filed the present case for relief under chapter 7 (Doc. 1). The trustee in this case, however, discovered Associates' failure to note its mortgage on the property's certificate of title and sought to avoid Associate's mortgage interest. The trustee subsequently filed a motion to sell the property free and clear of any liens or encumbrances (Doc. 17). This Court granted the motion and an order was entered confirming the sale (Doc. 28). As a result of the sale, the trustee is now holding $71,440.53 in proceeds. Of these proceeds, half belong to Mrs. Campbell's bankruptcy estate less her exemption under the homestead law of Ohio.
Mr. Campbell contends that he is entitled to the other one half interest in the proceeds from the sale at issue stemming from his co-ownership of the real estate. Mr. Campbell argues that because the trustee in the present case was able to avoid Associates' mortgage, his claim to the proceeds from the real property sold by the trustee in this case is superior to Associates.
III. Discussion
The sole question before the Court concerns whether Associates is entitled to proceeds from the sale of § 541(a) property in Mrs. Campbell's estate co-owned by Mr. Campbell despite its failure to note its mortgage interest on the certificate of title pursuant to O.R.C § 5309.93.
Ohio Revised Code § 5309.93 states:
No statutory or other lien except taxes and assessments, lawfully levied, and liens, claims, or rights arising or existing under the laws or constitution of the United States prior to October 4, 1933, shall affect the title to registered land, until after such lien is noted upon the registered certificate of title.
Ohio's land registration statutes, also known as the Torrens Law, are designed to protect bona fide transferees of registered land The Hermitage Club Co., Inc., v. Powers, 668 N.E.2d 955, 958 (Ohio Ct.App. 1995). Torrens laws are not intended to protect a transferee of real property from agreements which were made during the transferee's ownership of the property. Id.; Amrich v. Boyle, 136 Ohio St. 325, 326 (1940) ("The Torrens Land Registration Act is not a system designed to notify the owner himself of any liens or other encumbrances. Rather it is a system for notifying third parties."). A mortgage for registered land, although unrecorded, remains effective between the parties to the agreement. Samuel Fosdick v. Barr, 3 Ohio St. 471, 473 (1854).
In Dewsnup v. Timm, 112 S.Ct. 773 (1992) the Supreme Court held, pursuant to § 541(d), that a secured creditor's liens stay on the real property despite the debtor receiving a chapter 7 discharge. Mr. Campbell in his capacity as a joint owner of the property signed the note and mortgage agreement giving Associates a security interest in the residence. As earlier noted by this court, the trustee in Mr. Campbell's case abandoned her interest in the real estate and that decision became irrevocable. (See Doc 32, Case No. 01-17599). Once the real estate was abandoned in Mr. Campbell's case, the liens on the property are deemed not to have been affected in any way and the debtor, Mr. Campbell, holds title to the property in the same manner as he did prior to the filing of his bankruptcy petition. See In re Tarpley, 4 B.R. 145 (Bankr. M.D. Tenn. 1980). As to Mr. Campbell then, Associates' mortgage on the co-owned property survived the chapter 7 bankruptcy discharge. Accordingly, Mr. Campbell is still bound by the terms of the mortgage agreement, despite Associates' failure to properly note its mortgage interest on the certificate of title.
We also find no merit in the equitable estoppel arguments raised by Mr. Campbell. This court previously held that there was no improper concealment or withholding of information concerning the property that prevented the trustee in that case from performing her duties. Once the real estate was abandoned by the trustee in Mr. Campbell's case, Mr. Campbell lost whatever opportunity he had to have Associates' mortgage avoided or to claim a homestead exemption from the unencumbered proceeds from the sale. Consistent with these findings, the Court will enter an order directing the trustee to disburse one-half of the proceeds from the sale of the real estate conducted by the trustee in this case to the mortgagee, Associates Financial Services Company, less any payment of reasonable expenses incurred by the estate.