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| Property law |
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| Part of the common law series |
| Acquisition of property |
| Gift · Adverse possession · Deed |
| Lost, mislaid, or abandoned |
| Alienation · Bailment · License |
| Estates in land |
| Allodial title · Fee simple · Fee tail |
| Life estate · Defeasible estate |
| Future interest · Concurrent estate |
| Leasehold estate · Condominiums |
| Conveyancing of interests in land |
| Bona fide purchaser |
| Torrens title · Strata title |
| Estoppel by deed · Quitclaim deed |
| Mortgage · Equitable conversion |
| Action to quiet title |
| Limiting control over future use |
| Restraint on alienation |
| Rule against perpetuities |
| Rule in Shelley\'s Case |
| Doctrine of worthier title |
| Nonpossessory interest in land |
| Easement · Profit |
| Covenant running with the land |
| Equitable servitude |
| Related topics |
| Fixtures · Waste · Partition |
| Riparian water rights |
| Lateral and subjacent support |
| Assignment · Nemo dat |
| Other areas of the common law |
| Contract law · Tort law |
| Wills and trusts |
| Criminal Law · Evidence |
The Rule in Shelley\'s Case is a legal rule that may apply to certain interests in real property created in common law jurisdictions.Moynihan, Cornelius, Introduction to the Law of Real Property, 3d Edition, West Group (St. Paul: 2002), p181 It was applied as early as 1366 in The Provost of Beverly\'s CaseIbid, p182. (Y.B. 40 Ed. 3, f9, 18) but in its present form is derived from Shelley\'s Case (1581),1 Co.Rep. 93b (1581) in which counsel stated the rule as follows:
"...when the ancestor by any gift or conveyance takes an estate of freehold, and in the same gift or conveyance an estate is limited either mediately or immediately to his heirs in fee simple or in fee tail; that always in such cases, \'the heirs\' are words of limitation of the estate, not words of purchase.Moynihan, p181.
The Rule was reported by Lord Coke in England in the 17th century as well-settled law. In England, it was abolished by the Law of Property Act, 1925. During the twentieth century, it was abolished in most common law jurisdictions, including many of the United States. However, in states where the abrogation has been interpreted to apply only to conveyances made after abrogation, the Rule may still be of relevance to trust and property lawyers.Moynihan, pp190-91.
The Rule is still in operation in all Canadian common law jurisdictions (Quebec being a civil law jurisdiction) with the exception of Manitoba though it has made an appearance in case law only a few times in the last century.
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The litigation was brought about because of a settlement made by Sir William Shelley (1480-1549), an English judge, on an estate he purchased when the Sion Monastery dissolved. The decision was rendered by Lord Chancellor Sir Thomas Bromley, who presided over an assembly of all the judges on the King\'s Bench to hear the case during Easter term 1580-1581. The rule existed in English common law long before this case was brought to the court, but Shelley\'s case gave the law its most famous application.
The legal issue in Shelley\'s Case dealt with the rights of a grantee heirs when the deed of transfer attempts to confer a future interest from the grantee to heir. Ordinarily, upon the death of a grantee who has been given a life estate, the remainderman takes the property in fee simple absolute. However, in this case, since the remaindermen specified were the grantee\'s heirs, the court decided that the present and future interests merged in the hands of the grantee, eliminating the remainder and leaving a fee simple absolute in the hands of the grantee. Essentially, the grantee\'s estate is not obligated to convey the property to the remainderman upon the death of the grantee. Additionally, the grantee is not subject to any of the duties of a life tenant to preserve the property from waste.
This conclusion prevented children from taking control of a transferred property owned by their parent(s) that had a limitation in which the grantor (either grandparent or future grandparent) had attempted to pass some right onto the grandchild(ren)—technically known as the "heirs of the body" of the grantee—or other named heirs of the grantee. The language in the deed was a failed attempt to prevent the grantee from selling the property and thus depriving the heirs of property that would have to remain in the family. In order to avoid the Rule in Shelley\'s Case, the fee tail was created by the common lawyers. By deeding land to X and the heirs of his body, it was clear that the deeded land could pass only to the children of the grantee. The fee tail has been virtually eliminated in the United States.
1. O conveys Blackacre to B for life, remainder to B\'s heirs.Moynihan, p191
Discussion: The conveyance purports to create the following interests: life estate in B, remainder in B\'s heirs. The remainder in B\'s heirs must be a contingent remainder because B\'s heirs are unascertained, the condition to be satisfied in order for the remainder to vest presumably being the death of B (see note to problem 1). The Rule in Shelley\'s Case operates on this transaction to defeat the intent of the grantor and change the interests the grantor purported to give to B and (separately) to his \'heirs\'. After application of the Rule, the state of the title is now life estate in B, vested remainder in B in fee simple absolute. Because B has been conveyed two successive freehold estates, a second and independent doctrine, the Doctrine of Merger, operates on the life estate and remainder to turn B\'s interest into a fee simple absolute.
The court finally reads the transaction as "O conveys Blackacre to B and his heirs." That is, B takes a fee simple absolute.
Note to Problem 1: B is necessarily alive at the time of this conveyance; otherwise he could not take a life estate. Any contingent remainder supported by such a hypothetical life estate would be destroyed, and the fee simple would remain in O as if no transfer occurred. Therefore, assuming the necessary inter vivos nature of this transfer, B\'s heirs are unascertained because living individuals never have heirs. Stated otherwise, B must die in order for the world (and the court especially) to know who his heirs are. At the time of the transaction, a living person B may have an heir apparent X, but if it were the intent of the grantor O to create a future interest in B\'s heir apparent X, the court will not read that intent into the phrase "to B\'s heirs;" it will apply the Rule and place the remainder in the ancestor. At his death, his properly ascertained heirs will be forced to take his fee simple absolute by descent or devise.See Generally Moynihan, Chapter 9, Section 12, pp181-91 for an in depth analysis
Suppose Joe has a rich parent named "Grandpa" who considers Joe a feckless wastrel, but who wishes to ensure that Joe\'s children are provided for. Grandpa might try to deed a house "to Joe for life, and then to Joe\'s heirs", thus ensuring that Joe and his family could live in the house, but Joe could not sell it to pay gambling debts. The "remaindermen" in this case are the grandchildren. The Rule in Shelley\'s Case states that, this language notwithstanding, Joe is the absolute owner of the property.
Simply stated, the Rule deals with remainders in the transfer of real property by deed. A remainder is a right "carved out" of the fee simple (or what might be termed absolute ownership in plain English) which has some future interest (an interest of which the holder cannot yet make use at the time of the granting of the deed) so that, at some later date, the holder of the remainder (the future interest) would have ownership rights in the property and those future rights would have to be preserved. The rights could not be sold. It has been explained as an attempt to prevent the sale of property once transferred by putting such limiting words in the deed of transfer.
It is a classic example of common law legal reasoning and the logic involved in the interpretation of legal text which is why it continues to be an important teaching tool in the study of the common law.
Some scholars (e.g., see John V. Orth, "The Rule in Shelley\'s Case," The Green Bag, Autumn 2003) believe that this explanation (to promote the right to transfer the land) of the origin of the Rule is inaccurate. In their view the Rule originated as the courts\' response to an estate-planning technique in the 14th century, long before the litigation in Shelley\'s Case. A tax known as the "relief" had to be paid to the feudal lord (the Crown) when a tenant\'s heir inherited the land. To avoid this estate tax, if the grant to the land were framed in term of a life estate in the grantee followed by a remainder in the grantee\'s heirs, then upon the grantee\'s death his heirs would not inherit the land, but received it as a vested remainder. As a consequence, the heir would take the land without having to pay the relief. The courts could not abide such a transparent attempt to circumvent the tax system, and the Rule was invented to deal with this problem by converting these transfers into fee simples absolute so as to allow the relief to be collected upon the grantee\'s death. Later, when the relief was abolished, the Rule continued to survive in the common law due to inertia ("it is the genius of the common law to add, but not to subtract"), the "promote the right to transfer the land" explanation was concocted to explain the continued existence of the Rule. Note that it is not at all uncommon for rules of common law, once their original motivation falls away, to acquire a new justification, and in the process also, sometimes, a new meaning. Many examples of such processes are given in Oliver Wendell Holmes\'s "The Common Law".
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