The Dellit court’s analysis would be spot-on if it were a quitclaim deed rather than a GENERAL WARRANTY DEED! In the Dellit case (after giving effect to Leonard’s reserved 2/3 mineral interest)— Leonard is in no way simply purporting to convey only his remaining right, title and interest, if any, in the Property (this is what a quitclaim deed would accomplish). Here, it is apparent that the Deed conveyed the land itself and not just Leonard’s interest in the Property, and therefore passes after- acquired title. Consequently, the analysis as used in Dellit is a wholly misplaced legal fiction. A court cannot unilaterally change a warranty deed into a quitclaim deed—no matter how badly it wishes to give exclusive effect to the reservation. Montana law disfavors such an interpretation. Henningsen , 221 P.2d 438 at 443.
2008 MT 223, 186 P.3d 1288 (a court must reconcile two statutory schemes where it is possible to do so).
Conclusion
It is submitted that an equitable estoppel analysis (while needed in this case) is no basis for the court’s expressed rejection of the after- acquired title rule. The court could have very easily recognized a breach of the separate warranty contract and then, after weighing the equities, chose not to enforce the after-acquired title rule under a separate equitable estoppel analysis. The court could have reached the same result—while also defining the scope of after-acquired title as relates to reservations —thereby bringing more certainty to the enforcement of title covenants. In conclusion, the Dellit case highlights the complexities inherent in Montana’s property laws and the challenges of reconciling competing statutory frameworks. This is particularly true when the court employes the use of a legal fiction (treating a warranty deed as a quitclaim deed) to completely rewrite the Deed so as to shoehorn it into some narrowly constrained statute. However, by adopting a pragmatic and balanced approach to statutory interpretation, future courts can clarify the enforceability of title covenants and simplify the process of land title examinations. It is time to untangle the knots and provide a clear path forward for after-acquired title in Montana. In short, it may be high time to open the cage and give after-acquired title some room to fly!
The two statutes are, however, easily harmonized so that both may co-exist. For example, a court could easily find:
(1) that without question Leonard by the four-corners of the Deed did in fact reserve his 2/3 mineral interest: thus, staying faithful to Section 70- 1-516, MCA—regarding reservations in favor of the grantor; (2) that the separate warranty contract does not diminish or impair the title so reserved— i . e ., the reservation is effective: again, staying faithful to Section 70-1-516, MCA; and finally, (3) that the breach of the warranty contract only operates as an estoppel denying Leonard the right to claim the full 2/3 mineral interest he had reserved for himself, and instead allowing Irean to receive 1/3 out of that interest as a remedy for Leonard’s breach of the Deed’s warranty: thereby, also staying faithful to Section 70-20-302 MCA—as to after-acquired title. This construction is a very simple and logical extension of the after-acquired title rule—while also avoiding an implicit repeal of Section 70-1-516, MCA (reservations favor of the grantor). Such an analysis provides a framework for allowing a court to remain faithful to its duty to harmonize two statutory schemes where it is clearly possible to do so. See e . g ., Alkire v. Mun. Court, City of Missoula ,
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[1] The full text of Section 70-20-302, MCA: After-acquired title to pass by operation of law. “When a person purports by proper instrument to grant real property in fee simple and subsequently acquires any title or claim of title to the real property, the real property passes by operation of law to the grantee or the grantee’s successors.” [2] Furthermore, the Deed contained a “Subject to” clause, stating that: (t)his conveyance is also subject to all easements and reservations in the chain of title.” Dellit , 518 P.3d 830 at 833. The fact that the Warranty Deed contained language stating that it was “subject to” prior reservations of record does not render inoperative the presumption that Leonard intended to convey all of the Property, less the express
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G rowth T hrough E ducat i on - J anuary / F ebruary / M arch 2025
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