Title Examination Series: The Rule in Shelley's Case-It Still Matters!

The Rule in Shelley’s case can be oversimplified as, if an instrument creates a life estate in A, with a remainder to A’s heirs (or heirs of his body), then the remainder becomes ineffective (technically it becomes a fee tail and merges with the life estate) and A is vested with the whole estate. The heirs get nothing, the intent of the grantor is ignored, and A gets it all to himself, to dispose of as he wishes.

The Rule in Shelley’s Case, although still discussed in many a law school property class, was abolished in Texas effective as of January 1, 1964. See Tex. Pr. Code § 5.042. HOWEVER, it was not made retroactive. Specifically, the statute provides that it “does not apply to a conveyance taking effect before January 1, 1964.” So, for the vast majority of attorneys, the Rule in Shelley’s Case was just a talking point in law school, another inconsequential issue to be tested upon. To a title examiner, who is often called upon to interpret pre-1964 conveyances, the Rule in Shelley’s Case still has a bite, and still matters!

I think that it is very likely that numerous instances of a missed application of the Rule in Shelley’s Case have occurred throughout title examinations over the years, with no issues, and likely with no errors in the ultimate crediting of ownership. This is because the most likely scenario is that upon the death of A, his interest in the land passed to his heirs, satisfying the remainder to the heirs, even though the original grant to them was invalid.

However, there still exists the possibility, (and I have personally encountered it at least three times in my examinations), where (i) A can devise the property to someone other than an heir, (ii) because of marriage, upon A’s death the interest passes to a spouse who then devises to someone else or has different heirs than A, or (iii) A attempts to convey the land to a third party. All of these scenarios can result in ownership inconsistent with the intent of the original grantor/testator.

Examples:

Fourth. I give, devise and bequeath to my beloved daughter, . . .after the death of my said wife, Eighty Seven acres of land, . . . (here follows the description) to have and to hold the same for and during the term of her natural life, and upon her decease to the heirs of her body, according to the Statutes of descent and distribution, in fee simple.

It is our will and desire and we so direct, that upon the death of the survivor of us, all of our estate, both real and personal, shall pass to our beloved children, . . . ., share and share alike, for and during their natural life and at the death of either of them, the share bequeathed to such child, shall pass to and vest in fee simple in the heirs of their body, and in the event that either of our said children shall die without issue, then the share herein bequeathed to them shall be divided equally between the children of our surviving children.

Fourth: It is my will, and I so direct that my son, . . ., shall, at the passing of my wife . . . have and hold a life-estate only in and to the . . .(described lands), being all of the residue of said section not herein bequeathed to John and Anna, above, at his death his heirs take the fee simple title in and to said tract of land.

If a title examiner encounters an instrument that violates the Rule in Shelley’s Case, the first step is to determine whether or not the Rule was even applicable at the time of the conveyance (being the date of execution and delivery of a conveyance, or the date of death of a testator). If the Rule was applicable, then you should determine if the violation is inconsequential because of the successive title. Do the same people get the land anyways? If so, there is no need for further action. If the effect of the Rule results in different ownership, then such ownership should be noted, and likely it would be recommended to obtain a stipulation of interest, or other confirmatory transfers, that would solidify title.