Facts above).
Leonard breached his warranty to deliver 1/3 of the minerals. In such a case, what then is the remedy for Leonard’s breach of warranty? Irene certainly had a cause of action against Leonard for money damages ( i . e ., remedy at law)—however, this is not very satisfying. Irene also had the remedy of after-acquired title available ( i . e ., equitable remedy)—but only if Leonard should ever acquire an outstanding 1/3 mineral intertest. Most notably, however, this remedy does not provide an immediate solution. Even to the casual observer it would seem absurd to make Irene wait for Leonard to later acquire, if ever, an outstanding mineral interest, when in fact Leonard holds by virtue of his reservation the very interest, 1/3 of the minerals, required to remedy the breach. As such, Leonard should be estopped to assert any title to the reserved minerals until his grantee is made whole. In this regard a logical application of the after- acquired statute would dictate that Leonard’s reservation of a 2/3 mineral interest has the legal effect of warranting the remaining 1/3 interest to Irene thus leaving Leonard with a 1/3 mineral interest. [3] The question then becomes: Is there room under Montana law for such a logical extension of Section 70-20-302, MCA (after-acquired title to pass by operation of law)? Unfortunately, the court declined to answer this very question—even though Dellit practically begged the court to do so. Nonetheless, such an extension is indeed a logical and just application of after-acquired title when examined under the rubric that statutes are to “be liberally construed with a view to effect their objects and to promote justice.” Section 1-2-103, MCA. As previously stated, the rule of after-acquired title is a remedy for a grantor’s breach of warranty in a deed for failure to deliver a complete title. It is also commonly recognized that a warranty is not an essential component of a proper transfer of ownership, and it neither enhances nor restricts the conveyed title ( i . e ., you do not need a warranty to transfer title under a quitclaim
Estoppel by Deed: “Estoppel by deed enforces the plain language of a deed, preventing the other party from denying the meaning and effect of that language.” Id. at 838. In other words, courts should first attempt to glean the intent of the parties from the “four corners” of the deed without looking at outside facts and circumstances surrounding the execution of the deed ( i . e ., extrinsic evidence). The four-corners test is codified under Section 70-20- 202, MCA (explaining extrinsic evidence is not to be considered in construction of a deed). Equitable Estoppel: Thereafter, a court may decline to enforce certain provisions of a deed if the equities between the parties ( i .e., equitable estoppel analysis) are so required due to specific facts and circumstances surrounding the deed. Equitable estoppel is codified under Section 1-04-102, MCA (consideration of circumstances surrounding execution of a deed permitted if needed to determine parties’ intent). Now, let us consider the scenario in Dellit , but this time under a true Estoppel by Deed analysis, where Leonard owns 2/3 of the surface and minerals in the Property; and thereafter, gives a Warranty Deed in favor of Irene purporting to “grant and convey” the Property but reserving to himself 2/3 of the minerals. Under a four-corners test ( i . e ., estoppel by deed, Section 70-20-202, MCA) and the application of Section 70-1-516, MCA (reservations are interpreted in favor of the grantor) it is determined that Leonard fairly and truly intended and thereby did reserve to himself all his 2/3 mineral interest. Okay fair enough, Leonard reserved his 2/3 mineral interest. But what then did Leonard purport to convey and thereby warrant? Again, applying a four-corners test to the grant/warranty ( i . e ., estoppel by deed)— which the Dellit court did not do in its case —it can be fairly deduced that the purported grant (in combination with the 2/3 mineral reservation) is to convey the surface and 1/3 of the minerals to Irene. However, because Leonard cannot convey what he does not own— Irene only received title to the surface and no minerals. As a result, according to our analysis,
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G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2025
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