Leonard Schleder and his sister, Irene Messer, both owned fractional interests in the surface and mineral estates of three tracts of land. By Warranty Deed, Leonard conveyed all interest in said land to Irene and her husband, subject to a reservation of “an undivided two-thirds of all oil, gas, and minerals in, upon or under said lands…” While Leonard claimed that he reserved all of his mineral interests, the Messers contended that the Warranty Deed transferred 1/3rd of Leonard’s mineral interests to them. The Montana Supreme Court agreed with Leonard, interpreting the deed language such that the reservation did not grant 1/3rd of Leonard’s mineral interest to the Messers.
The court determined that the plain meaning of “all oil, gas and minerals,” as specified in the reservation, meant the property’s entire
mineral estate. Leonard owned 2/3rds of the mineral interest of two tracts, matching his reservation of 2/3rds of all minerals. Leonard only owned 1/2 of the mineral interest of one of the tracts, which the court found was encompassed by the 2/3rds interest he reserved. The court coupled its reasoning with the fact that reservation clauses must be interpreted in favor of the grantor under Montana law. Additionally, because Irene owned the remaining 1/3 mineral interest not owned by Leonard, the language of the reservation clause could not have misled the Messers, and estoppel by a deed would, therefore, not preclude Leonard from asserting title to the minerals. Based on the foregoing analysis, the court found that Leonard did not reserve only 2/3 of whatever he owned but successfully reserved all of his mineral interest in the three tracts.