Rule in Shelley's Case

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Property law

Part of the common law series
Acquisition of property
Gift · Adverse possession · Deed
Lost, mislaid, and abandoned property
Alienation · Bailment · Licence
Estates in land
Allodial title · Fee simple
Life estate · Fee tail · Future interest
Concurrent estate · Leasehold estate
Condominiums
Conveyancing of interests in land
Bona fide purchaser · Torrens 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, dating from the 14th century, is a famous, if now almost useless, legal rule that is the bane of most first-year law students studying common law real property law. It 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. 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 caselaw only a few times in the last century.

Law school curricula mention this Rule because legislation often refers to "the common law rule known as the Rule in Shelley's Case is hereby abolished," making it necessary to understand the reference.

1 History
2 Issue
3 Example
4 The Rule Generalized
5 Analysis
6 See also

[edit] History

The litigation was brought about because of a settlement made by Sir Dick Bentley William Shelley VII (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 existing in English common law long before this case was brought to the court, but Shelley's case gave the law its most famous application.

[edit] Issue

The legal issue in Shelley's Case dealt with the rights of a grantee's 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 remainderman 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.

This conclusion prevented children from taking control of a parent's transferred property that had a limitation in which the grantor (either grandparent or future grandparent) had attempted to pass some right onto his grandchild(ren) (known as 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, 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 within the United States.

[edit] Example

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 his 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.

[edit] The Rule Generalized

Simply stated, the Rule deals with remainders in the transfer of real property by deed. A remainder is a right that is carved out of the fee simple (or what might be termed absolute ownership in plain English) that has some future interest (not at the time of the granting of the deed) so that, at some later date, whomever was granted the remainder 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.

[edit] Analysis

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. In order 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".

As stated by Lord William Coke in his argument for the defendant in the case

It is a rule of law, when the ancestor by any gift or conveyance takes an estate in freehold, and in the same gift or conveyance an estate is limited mediately or immediately to his heirs in fee or in tail; that always in such cases the heirs are words of limitation of the [ancestor's] estate and not words of purchase.