Property
Class Notes
More on destructibility of contingent
remainders
At common
law, they couldn’t stand that idea that no owner was entitled to possession of property
at a given time. Therefore, if the contingent
remaindermen are not ready to take when the previous
estate terminates, we just kill the contingent remainder and the property goes
to whatever the next vested estate is.
The common law didn’t like abeyance of seisin!
“To
A for life and then in fee simple absolute to B’s children who survive A”: A has a life estate, B’s children have a contingent
remainder, and O has a remainder in fee simple absolute.
What
if B dies leaving children and then A dies? The contingent remainder turns into a possessory
estate in fee simple absolute.
What
if A dies during B’s lifetime and B doesn’t have any
children? The contingent remainder will
be wiped out. O gets the land back on
the reversion and gets a possessory fee simple absolute.
What
if while A and B are still alive, A conveys her life
estate to B? What if A conveys her life
estate to O? So A has a life estate at
first, B’s children have a contingent remainder, and O has a reversion. When A conveys the life estate to B, it
becomes a life estate pur autre vie. What if A conveys the life estate to O? Then I think O gets back the possessory
estate in fee simple absolute. Yes! And the contingent remainder is destroyed. Recall that the only way that possession
could “spring” from O to the children would be with an executory interest which
was not allowed before the Statute of Uses.
“To
A for life and then to A’s first born son.
A dies childless, but a son is born 6 months after his death”: A has a life
estate, A’s first born son has a contingent remainder, and O has a reversion. It turns out that children are considered to be
in being from the time they are conceived if
they are born alive. So it turns out
that the contingent remainder is maintained.
Then, when the child is born, the child gets the possessory estate. This isn’t terribly logical because it’s not
a debate over when life begins. This is
a way of protecting afterborn children. If you don’t have the rule of destructibility
of contingent remainders, we wait for this event. “It’s just
an exception. It doesn’t have to
make sense!”
“To
A for life and then to T, as trustee, for the purpose of preserving contingent
remainders and for the benefit of the children of B who survive A if they
attain the age of 21”: A has a life estate, then T has a legal vested remainder
in fee simple absolute. The children of
B who survive A have an equitable contingent remainder
in fee simple absolute. O has a legal reversion.
What
if A dies when B’s oldest child is 14?
Then T has a legal fee simple absolute.
Then the children of B still have an equitable contingent remainder in fee
simple absolute. But does the contingent
remainder get destroyed? No, because it
will hold up in the courts of equity. At
law, T is just sitting there with a regular old possessory estate. T has seisin!
There is no gap! We have intervened a trustee who will stand there for the purpose of
preserving contingent remainders. The
trustee has seisin, and has a legal fee simple absolute, recognized at
law. The children have an equitable fee
simple absolute. If the children reach
the age of 21, the Statute of Uses will execute the now “dry” trust and give
the children both a legal and equitable estate.
Braunstein
says this shows how the rule is stupid because it’s so easy to get around it.
Trusts
never fail for want of a trustee. If T
dies, someone else will be appointed.
But the safest thing to do is to have more than one trustee so if one
dies you’ll have a backup. Also, the
trustee has all the management functions.
The
point is that it’s really easy to avoid this rule. This all tends to show why the rule is more
or less obsolete.
The Rule in Shelley’s Case
This
rule operates to destroy contingent remainders in heirs. Just like always, you (1) classify the interests,
(2) apply the rule, then (3) reclassify the interests.
There
are four requirements:
1. One instrument
2. Creates a life estate in
land in A – the rule only applied to land.
3. Purports to create a remainder
in persons described as A’s heirs or the heirs of A’s body
4. Both the life estate and the
remainder are of the same quality, i.e. both equitable or both legal
It’s
also easy to avoid this rule! The
simplest way to get around the rule is to simply use two pieces of paper.
What’s
the gift? Effie Seymour gives all her
property to a trustee to hold for her son’s benefit during his life, and then
upon his death, it’s all to be paid to his “lawful heirs”. Let’s classify the interests!
The
trustee would have a legal fee simple absolute.
William would have an equitable life estate. William’s “lawful heirs” would have an
equitable contingent remainder in fee simple absolute. That remainder is contingent because the
heirs are unascertained as long as William is alive.
What
is William’s widow upset about? She thinks
that when her husband died, he left her
all of his property. She wants to prove
that he actually had a fee simple absolute and that now she has it. She believes that William got a fee simple
absolute under his mother’s will under the Rule in Shelley’s Case.
William’s
widow says that we have one instrument that gives a life estate in William and
purports to create a remainder in William’s “lawful heirs”. Finally, William’s widow claims that William’s
life estate and the heirs’ remainder are in trust, and therefore they are both
equitable and of the same quality.
Therefore, she argues, the Rule in Shelley’s Case applies. When that rule applies, it makes it such that
the remainder is also in the life tenant.
The interests merge together, and the person who looks like he had a life estate actually
gets a fee simple absolute.
On
the other hand, the people who would be William’s heirs claim that they have an
interest in this property as well. The
court goes through the interests and applies the rule.
Is
the court concerned with Effie’s intent?
Effie’s intent doesn’t seem to be followed. But that’s the point of the rule!!! These are intent-defeating
rules! So if you don’t like it,
tough! These rules favoring free
marketability are considered so important that they defeat competing policies
such as freedom to write your will any way you want.
You
could use the word “heirs” to mean different things. Did she “really mean it” when she said “heirs”? Is there something in the will that might
lead one to believe that she wasn’t using the word in its usual technical
sense?
What
kind of estate did the trustee have?
What difference does it make? What
did the heirs argue? We have to
determine if both the life estate and the remainder are of the same
quality. That is, are they both
equitable or both legal? The heirs say
that as soon as William died, the trust terminated and the property went to
them as a legal fee simple absolute.
They argue that their estate was legal, while William’s estate was
legal, and therefore the rule shouldn’t apply.
But the court disagrees.
The
court says that the trustee has the legal fee simple absolute. Therefore, all the other interests must be
equitable. The court also says that you don’t look at this after William dies. Instead, you look at the interests that are
created at the time the interest is
created. At the time that Effie
died, it is clear that the interests in William and the heirs are both
equitable. That is the relevant time to look.
Don’t look after William dies.