The Rule in ''Shelley's Case'' is a rule of law that may apply to certain
future interests
In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; ...
in
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...
and
trusts created in
common law
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
jurisdictions.
[Moynihan, Cornelius (2002), ''Introduction to the Law of Real Property'' (3rd ed.), St Paul: West Group.] It was applied as early as 1366 in ''The Provost of Beverly's Case''
but in its present form is derived from ''Shelley's Case'' (1581), in which counsel stated the rule as follows:
The rule was reported by
Lord Coke in
England
England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...
in the 17th century as
well-settled law. In
England
England is a Countries of the United Kingdom, country that is part of the United Kingdom. It is located on the island of Great Britain, of which it covers about 62%, and List of islands of England, more than 100 smaller adjacent islands. It ...
, it was abolished by the
Law of Property Act 1925
The Law of Property Act 1925 ( 15 & 16 Geo. 5. c. 20) is an act of the Parliament of the United Kingdom. It forms part of an interrelated programme of legislation introduced by Lord Chancellor Lord Birkenhead between 1922 and 1925. The progr ...
. During the twentieth century, it was abolished in most
common law
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
jurisdictions, including the majority of the
states of the United States. However, in states where the abrogation has been interpreted to apply only to conveyances made after abrogation, the relevance of the rule today varies from jurisdiction to jurisdiction and in many states remains unclear.
History
The 1366 application of the rule in common law closely followed
Occam's razor
In philosophy, Occam's razor (also spelled Ockham's razor or Ocham's razor; ) is the problem-solving principle that recommends searching for explanations constructed with the smallest possible set of elements. It is also known as the principle o ...
, William of Ockham's articulation of the problem-solving principle that "entities should not be multiplied without necessity". The eponymous
litigation
A lawsuit is a proceeding by one or more parties (the plaintiff or claimant) against one or more parties (the defendant) in a civil court of law. The archaic term "suit in law" is found in only a small number of laws still in effect today. ...
was brought about because of a settlement made by
Sir William Shelley (1480–1549), an English judge, on an estate he purchased when
Sion Monastery was
dissolved. The decision was rendered by
Lord Chancellor
The Lord Chancellor, formally titled Lord High Chancellor of Great Britain, is a senior minister of the Crown within the Government of the United Kingdom. The lord chancellor is the minister of justice for England and Wales and the highest-ra ...
Sir Thomas Bromley, who presided over an assembly of all the judges on the
King's Bench to hear the case during
Easter term 1580–81. The rule existed in
English common law
English law is the common law legal system of England and Wales, comprising mainly criminal law and civil law, each branch having its own courts and procedures. The judiciary is independent, and legal principles like fairness, equality bef ...
long before this case was brought to the court, but ''Shelley's Case'' gave the law its most famous application.
Summary of the rule
The Rule in ''Shelley's Case'' provides that a conveyance which attempts to give a person a life estate, with a remainder to that person's heirs, will instead give both the life estate
and the remainder to that person. Absent an intervening vested future interest, the life estate and the remainder will merge and the conveyance gives that person the land in fee simple absolute (full ownership without restriction).
Suppose Joe has a rich relative who considers Joe careless and imprudent, but who wishes to ensure that Joe's children are provided for. The relative 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 Joe's heirs. The Rule in ''Shelley's Case'' states that, this language notwithstanding, Joe is the absolute owner of the property.
Issue
When an owner of land in fee simple died, the lord of the fee was entitled to "incidents of tenure" deriving from the descent to the heir (analogous to the modern day
estate tax
International tax law distinguishes between an estate tax and an inheritance tax. An inheritance tax is a tax paid by a person who inherits money or property of a person who has died, whereas an estate tax is a levy on the estate (money and pr ...
).
Large landowners who desired the
life tenant (who was perhaps the landowner himself, conveying through a straw party) to avoid the estate tax attempted to create a
future interest
In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; t ...
in the form of a
remainder
In mathematics, the remainder is the amount "left over" after performing some computation. In arithmetic, the remainder is the integer "left over" after dividing one integer by another to produce an integer quotient ( integer division). In a ...
in the heirs of that life tenant. It was the intention of the landowner or testator to allow the heirs of the life tenant, once ascertained at the natural expiration of his life estate, to take as purchasers by way of the original executed conveyance, and not by descent, avoiding the tax.
Thus, in a basic conveyance absent the rule (e.g., "O grants
Blackacre
Blackacre, Whiteacre, Greenacre, Brownacre, and variations are the placeholder names used for fictitious estate (law), estates in land.
The names are used by professors of law in common law jurisdictions, particularly in the area of real property ...
to B for life, then to B's heirs") there was a life estate in B, and a contingent remainder in B's heirs. The rule converted the contingent remainder in B's heirs into a
vested remainder in B.
The rule's effect ended there. After that, the
doctrine of merger operated on the two successive freehold estates placed in the same purchaser (B's life estate and B's remainder in fee simple) and converted them into a single fee simple absolute in B.
B's heirs, necessarily ascertained only at B's death, could only take B's fee simple by descent and had to pay the tax.
Thus, a conveyance to B for life, then to B's children, where B has living children C, D, and E, does not violate the rule because the class members are ascertained, and new ascertained members may join the class so long as B, the class member producer, lives (plus nine months if he is male).
Generalized rule
Simply stated, the rule deals with remainders in the transfer of
real property
In English common law, real property, real estate, immovable property or, solely in the US and Canada, realty, refers to parcels of land and any associated structures which are the property of a person. For a structure (also called an Land i ...
by deed. A
remainder
In mathematics, the remainder is the amount "left over" after performing some computation. In arithmetic, the remainder is the integer "left over" after dividing one integer by another to produce an integer quotient ( integer division). In a ...
is a right "carved out" of the ''
fee simple
In English law, a fee simple or fee simple absolute is an estate in land, a form of freehold ownership. A "fee" is a vested, inheritable, present possessory interest in land. A "fee simple" is real property held without limit of time (i.e., pe ...
'' which has some
future interest
In property law and real estate, a future interest is a legal right to property ownership that does not include the right to present possession or enjoyment of the property. Future interests are created on the formation of a defeasible estate; t ...
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
Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...
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. However, while it is an important interpretation tool, it should not be confused with a rule of construction (such as the
doctrine of worthier title) as it is a rule of law. The distinction is that a rule of law cannot be overcome by proof of the grantor's intent, while a rule of construction can be.
Analysis
Some scholars, such as
John V. Orth, 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 fees simple 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. 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
Edward Coke
Sir Edward Coke ( , formerly ; 1 February 1552 – 3 September 1634) was an English barrister, judge, and politician. He is often considered the greatest jurist of the Elizabethan era, Elizabethan and Jacobean era, Jacobean eras.
Born into a ...
in his argument for the defendant in the case:
See also
*
Rule against perpetuities
The rule against perpetuities is a legal rule in common law that prevents people from using legal instruments (usually a deed or a will) to exert control over the ownership of private property for a time long beyond the lives of people living at ...
Notes
References
Further reading
* Lawrence W. Waggoner, ''Estates in land and future interests in a nutshell'' 2nd ed. (West Publishing: St. Paul, 1993), ch. 11
* David A. Smith, "Was There a Rule in Shelley's Case?" ''The Journal of Legal History'', Volume 30, Number 1, April 2009, pp. 53–70.
{{DEFAULTSORT:Shelleys Case
English property case law
Real property law
Common law rules
1581 in law
16th century in case law
1581 in England