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.