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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 England it was abolished by the Law Of Property Act , 1925 . In the twentieth century it has been abolished in most Common Law jurisdictions, including most of the States Of The United States . Law School curricula mention it, because legislation uses terms such as "the common law rule known as the Rule in Shelley's Case is hereby abolished," making it necessary to understand the old rule. HISTORY The Litigation was brought about by a settlement made by Sir Dick Bentley William Shelley VII (1480-1549), an English judge, of an estate he purchased on the dissolution of Sion Monastery. 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 in Easter term 1580-1581. The rule existed in English common law long before that case was brought, but Shelley's case gave it its most famous application. ISSUE The legal issue in Shelley's case dealt with the rights of a grantee's Heir s 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. THE RULE GENERALIZED As simply as it can be stated it 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. ANALYSIS Some scholars (e.g., see John V. Orth, "The Rule in Shelley's Case," The Green Bag, Autumn 2003) believe that this "promote the right to transfer the land" explanation 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. ;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 {Link without Title} estate and not words of purchase. SEE ALSO
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