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The Rule in Shelley's Case

The Rule in Shelley's Case, dating from the 14th century, is a famous if now almost useless legal rule that is now 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 the twentieth century it has been abolished in most common law jurisdictions. In England it was abolished by the Law of Property Act, 1925. including most of the states of the United States, however it continues to be taught as part of the common law in most law schools throughout the world.

The litigation was brought about by a settlement made by Sir William Shelley (1480-1549), an English judge, of an estate he purchased on the dissolution of Sion Monastery. The rule was laid down by Lord Chancellor Sir Thomas Bromley, who presided over an assembly of all the judges on the King's Bench to hear the case in Easter term 1580-1581.

As simply as it can be stated it deals with remainders in the transfer of real property by deed. A remainder is right that is carved out of the fee simple (or what might be terms 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. In other words it was 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.

The legal issue in Shelley's case dealt with the rights of a grantee's heirs when mentioned in the deed of transfer. (i.e. I give title to X for life (a life estate) with remainder on his death to his heirs). Do the heirs have a right under that deed (and even subsequent deeds to third parties) or does the ancestor (who has received the deed with the remainder limitation) have the total right to dispose of the property without the future remainder taking effect at some later date? The answer is that the ancestor has all the rights under the remainder at the time of the transfer of the deed the heir or heirs have no right to sell their interest ,i.e. the ancestor (grantee) has absolute complete ownership with no limitations, i.e., he does not have to keep the property to give it to his heirs when he dies).

This conclusion prevented children from taking control of their 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 and thus depriving his heirs of property that would have to remain in the family thus promoting the right to transfer the land. 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, they made it clear that the land so deeded could only pass to the children of the grantee.

See also: Rule against perpetuities

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.

See: Lawrence W. Waggoner, Estates in land and future interests in a nutshell 2nd ed. (West Publishing: St. Paul, 1993), ch. 11