Future Interest

When rule in Shelley’s Case is Triggered

Rule: The rule in Shelley’s case state’s that when O conveys to A for life with a remainder to

A’s heirs, A’s heirs take nothing and A has a remainder. Heirs are individuals who take by

operation of law when a person dies intestate (that is without a will).

Analysis: Were the words exact “to O with a remainder to A’s heirs” and if so, it triggers the rule

in Shelley’s?

if not, the argument is for “form over substance.”

Ancient common law: “ to a and heirs” created fee simple and “to A in fee simple” was a

life estate; logic over common sense

Modern: spirit and intent control, not just letter. Control cost of doing business, which

makes life more expensive and increases litigation.

**If common law has been codified, Shelley’s Rule should have to followed to the exact

magical wording, as legislature intended.

Assuming Rule in Shelley’s Case stands, Merger:

Merger (Common Law)

Rule: The merger doctrine states that if one person owns a life estate and that same person owns

the next vested estate, such as a vested remainder, the life estate merges into the vested estate.

Application: If O conveys to A based on RISC A is vested remainder bc he is

ascertainable person, and there was no condition precedent. Thus, Able owned next vested estate

which merged with life estate to be fee simple absolute. Able owns fee simple absolute under

Merger.
Merger: Modern Approach

Rule: Rule is not recognized and A’s heirs take a contingent remainder because they are

unascertainable beneficiaries because living people do not have heir’s but heirs apparent.

Argue: Conveyer owns reversion, future interest remain in grantor when he conveys a

vested estate (LE) of a lesser quantum.

Thus, modernly heir would have a contingent remainder and O has a reversion in Fee

Simple.

Affirmative Waste

Rule: Waste is the destruction of the property by one of the tenants. Affirmative waste arises

when the life tenant commits injurious acts on the property, as opposed to waste by failing to act.

Injurious act means acts that reduce the value of the property.

Argue: Did act make property worth less? Yes, waste.

Remaindermen: Affirmative Waste

Rule: A life tenant can be sued by remaindermen for affirmative waste which is destruction the

property. In some jurisdictions, remaindermen do not have standing to sue for waste.

If Jx allows, and RISC not applied so therefore heirs take and are contingent beneficiaries

as heir apparent, remainder man can sue. If JX doesn’t allow, has no standing. Otto has standing

holding a reversion which is a vested interest in common law.

Vested or Contingent Remainder

Rule: A remainder is a future interest created in a third person that may become possessory upon

the natural termination of the preceding estate. It is vested if it is given to an ascertainable person

and is not subject to a condition precedent. A remainder is contingent if it is given either to an

unascertainable person or is subject to a condition precedent. When in doubt, the common law

presumes a vested remainder.

Argument: Look at the language it may show the motive, (take statement of motive out and what

is left is the gift and condition) thus meaning there is a condition (word like demand, expect,

until) Also, see the grammar, if the condition seems like a separate thought subsequent to the

conveyance, (dashes, commas, etc.) thus, probably vested and not contingent. However, if it

comes before the conveyance Common law presumption is vested because it helps further

marketability. Argue: If it is meant to be one sentence, if meant to be one thought, it is

contingent; Dashes, commas, two thoughts, two sentences, vested.

Vested Remainder (condition subsequent) or Contingent Remainder Condition

Precedent)

Rule: Remainders are contingent or vested. A remainder is contingent when the condition is part

of the gift. When the condition follows the gift, the remainder is a vested remainder subject to

divestment.

Argue: one sentence- condition is part of gift so condition is precedent and contingent.

If motive stated twice, and redundant can argue intent of grantor controls and vested is

favored, should be deemed to be subject to condition subsequent and is vested.

Sufficiency of Interest

Rule: In some jx, courts will give legal relief (damages) to contingent remaindermen if the

contingency is fairly certain to vest. [The court in such cases impound the funds and distribute

them if the remainder vests in interest or possession]

 Argue: How certain is it to vest? How uncertain? Based on that, does the remainderman

have sufficient standing to sue.

Destructibility of Contingent Remainders: Common law and Modern View

Rule: Under the common law, a contingent remainder that does not vest in possession or interest

upon the termination of the preceding life estate if destroyed. The owners of the reversion

thereupon own the estate in fee simple.

Was the condition satisfied by the time the previous life estate ended? If not it goes to the

reversion holder (typically the conveyer) or his/her heir.

Acceleration of Vested Remainders

Rule: Vested remainders even those subject to divestment are never destroyed but rather

accelerate into possession wherever and whenever possible.

Application: If remainder is vested and life estate tenant dies, (even if vested interest is

subject to divestment because of a subsequent condition) condition is essentially struck and the

remainderman accelerate into possession.

Destructibility of Contingent Remainders: Modern Approach

Rule: Under the rule of destructibility of contingent remainders, if the preceding estate ends

before the contingency has been satisfied, the remainder is destroyed and the reversion in the

grantor or the testator’s heir becomes transformed into a fee simple. Modernly, however, the

remainder is not destroyed but rather transforms into a springing executory interest with the

grantor or the testator’s heirs having a fee simple subject to the spring executory interest.

Argue: If jx retains rules of destructibility, upon death if condition not satisfied,

remainder destroyed. Reversion owner gets reversion and owns in Fee Simple.
 If destructibility no longer recognized, contingent remainder not destroyed and

transformed into springing executory interest while conveyer owns fee simple subject to

executory interest. Once condition satisfied, spring out of conveyer to executory interest holder,

who has FSA.

Express Profit: Statute of Frauds

Rule: A profit is an interest in land that allows one to go on to the land of another and remove a

product of the land or a part of the land. An express profit must comply with the SOF, which

requires a description of the property interest.

Argue; Must sufficiently describe the interest and not be broad. (sand as needed)

If there are ambiguities that do not contradict the terms of the writing, parol evidence is

admissible.

Profit Implied from Prior Use

Rule: An implied profit by prior use required a common grantor who conveyed a part and kept a

part; prior to the conveyance there was a quasi-profit; there was necessity at the time of the

conveyance; and the apparent and continuous.

Profit implied from Prior Use: Common Grantor

Rule: A common grantor requires that there be one person who owned both the servient and

dominant estate prior to the conveyance.

Argue; If person and Inc. two separate and distinct people and not common grantor and

state law determines property rights.

 IF IRS doesn’t recognize two entities, it is almost certainly bc of tax improprieties and

should not reap benefit of wrong doing.

Profit implied from prior use: Quasi-Profit

Rule: A quasi-profit exists when prior to the conveyance, there was a usage of the two parts

which, had it been severed, could have been the subject of a profit with a dominant estate and a

servient estate.

Argue: Was the rule satisfied? Then implied.

Destroys fee simple of other. All had to do was put the implied reservation clearly,

honestly and unequivocally in the deed that the profit was reserved.

Profit Implied from Prior Use: Necessity (Reasonable)

Rule: Necessity means either absolute or strict, meaning that there is no other alternative; or it

means just reasonable necessity, meaning substantial increased cost. For prior use created by

implied reservation , strict necessity was required. For prior use profit created by implied grant,

reasonable necessity traditionally has been the rule. Modernly, reasonable necessity may be used

for a profit created by implied reservation, the latter just being one of several factors to

determine what standard to use. (Reasonable necessity only discussed below)

Argue: Substantial increased cost because without profit, will incur huge cost, which

satisfies definition on face.

Burden of cost is price of not investigating first, not on other person’s property interest

being abrogated.

Profit Implied from Prior Use: Continuous and Apparent

Rule: Continuous means permanent, not temporary, and apparent means reasonably

discoverable.
 Argue: was use to a degree that it was permanent and the purchaser would discover?

Over time would taking be continuous? Duty to check neighbor’s land when a reasonable

person should consider the relationship between neighboring land?

Implied Profit by Necessity (Strict)

Rule: A profit by necessity arises when a common grantor conveys a part and keeps a part and

immediately after the conveyance there is a necessity to take part of the servient land. Necessity

in profits traditionally means strict necessity.

Argue: with strict necessity, without the profit, does something bad happen that society

wants to prevent?

Is there an alternative method of avoiding the bad thing making it not a strict necessity?

Irrevocable License

Rule: A license can become irrevocable by an estoppel. For an estoppel to arise there must have

been misleading conduct on the person sought to be estopped along with detrimental reliance on

the part of the other.

Argue: Misleading conduct by person to be estopped can be accepting the deed with the

term at dispute because other may relied on it reasonably, and by not objecting to it, while not

fraudulent, had duty to object.

Detrimental reliance requires relying on the term to detriment. Did that happen? If not

any worse of than before, then not detrimental reliance and not irrevocable license.