Prior to the 16th century, it had become common for estates in land to be held by one person at common law and another in equity. A way of thinking of this arrangement is that each form of estate in land could be held by one person in equity and another at common law. When considering an estate in land, it may help if you consider an estate in fee simple in the land and the various ways in which such an estate can be divided both in equity and at common law. As you will see this can become complex, but your analysis may be easier if you consider whether you have accounted for an entire estate in fee simple in analyzing a grant or devise.
A group of powerful people in the 16th century decided that the practice of dividing the common law and equitable estates in land should come to an end. In general, this mood was caused by (i) lost income from the land, and (ii) a desire to limit the power of the Chancellor and the Courts of Equity. At the time, Parliament was full of common lawyers who did not like the way that the Courts of Equity had interfered with the transfer of property in land. Moreover, King Henry VIII needed more money. Hence, the Statute of Uses was passed in 1535, and took effect in 1536.
The relevant section of the Statute of Uses reads as follows;
2 Where any person stands or is seized of and in lands, tenements, rents, services, reversions, remainders, or other hereditaments, to the use, confidence or trust, of any other person, or of any body politic, by reason of any bargain, sale, feoffment, covenant, contract, agreement, will, or otherwise, by any means whatsoever it be, in every such case such person or body politic that shall have any such use, confidence or trust, in fee simple, fee tail, for a term of life, or for years, or otherwise, or any use, confidence or trust, in remainder or reversion, shall from henceforth stand and be seized, deemed and adjudged in lawful seizin, estate and possession of and in the same lands, tenements, rents, services, reversions, remainders, and hereditaments, with their appurtenances, to all intents, constructions and purposes in the law, of and in such estates as they had, in use, trust or confidence, of or in the same. And the estate, right, title, and possession , that was in such person that was, or shall hereafter be seized, of any lands, tenements, or hereditaments, to the use, confidence or trust, of any such person, or of any body politic, shall be from henceforth deemed and adjudged to be in him that hath such use, confidence or trust, after such quality, manner, form and condition, as he had before in use or to the use, confidence or trust, that was in him.
It might be hard to tell from this monument to run on sentences, but the effect of the Statute was simple enough. After the Statute, a grant of a form of property in land at common law to A and the same form of property in equity to B would result in A holding nothing and B holding the form of property at common law.
Consider the following;
---> Grant To A and his heirs to the use(1) of B and his heirs..
Prior to application of the Statute A would have held an estate in fee simple at common law and B would have held an estate in fee simple in equity. After application of the Statute, A holds no form of property as a result of this grant. B holds an estate in fee simple at common law. Since no one else holds the equitable estate, that is, B is not acting as a trustee for another. Equity has nothing to say about how B uses the land.
The Statute of Uses can apply to any form of property in land. Thus far all the examples have dealt with freehold estates in land; this need not be the case. Consider the following grant made 12 June, 1884.
---> Grant To A for 10 years to the use of B for 10 years.
The analysis is identical.
First at common law the grantor holds an estate in fee simple. Prior to application of the Statute of Uses. A held a leasehold estate at common law and B held a leasehold estate in equity. After the application of the Statute, A holds no property as a result of the grant, and B holds a leasehold estate at common law. Think about the complete estate in fee simple and how it is split amongst the various holders of property. Both in equity and at common law, the grantor continues to hold an estate in fee simple.
Consider the impact of this analysis on the following grant. Immediately before the grant the grantor held an estate in fee simple at common law. As of the time of the grant B is 19.
---> Grant To A and his heirs, to the use of B and his heirs at the age of 21.
Prior to the application of the Statute of Uses A held an estate in fee simple at common law. B held a contingent remainder in fee simple in equity, and the grantor would have held an estate in fee simple in equity until B reaches the age of 21. After the application of the Statute of Uses A holds nothing. B holds a contingent remainder in fee simple at common law. As there is no evidence that the grantor intended that A should benefit as a result of this grant the grantor holds an estate in fee simple determinable at common law until B reaches the age of 21.
There are additional considerations when applying the Statute of Uses. First, the Statute applies to only one use. This is not just a matter of counting the number of times the words "use" appears in the grant. Consider the following;
---> Grant To A to the use of B to the use of C.
As a result of this grant, after application of the Statute, A holds no property. B holds an estate in fee simple at common law. C holds an estate in fee simple in equity. Only the first use has been edited from the grant. This is because a series of cases in the latter part of the 16th century decided that the statute could only be used once. Contrast the following grant:
---> Grant To A for life to the use of B for the life of A, remainder to the use of C at the age of 21.
This grant contains only one use.
Suppose C is 15 years old at the time of the grant. Before application of the Statute, at common law A held a life estate and grantor held an estate in remainder in fee simple. Note that the grantor’s property can be expressed differently: grantor held an estate in remainder in fee simple determinable + a contingent remainder in fee simple, with both the determining event and the condition precedent being C reaching 21. In equity, the grantor held the common law contingent remainder to the use of C and B held a life estate for the life of A. .
After application of the Statute, A holds no property. B holds a life estate for the life of A at common law.
What would the analysis be if C were 22 at the time of the grant?
---> Grant to A in fee simple to collect rents to the use of B.
The Statute of Uses does not apply in cases where the holder of property at common law has an active duty. As a result of this grant, A holds an estate in fee simple at common law. B holds an estate in fee simple in equity. As A must collect and transfer the rent to B, the Statute is not applied to this grant. Nor does the Statute apply where a person holds the property to his own use. Note that the words in the Statute are "to the use of another". Consider the following grant.
---> Grant Unto and to A, to the use of B for life, remainder to the use of C.
"Unto and to A" is the short form for “To A to the use of A”. Hence, as a result of this grant, A holds an estate in fee simple at common law and in equity. B holds a life estate in equity and C holds an estate remainder in fee simple in equity.
Common law remainders created by application of the Statute of Uses are subject to the rule in Purefoy v. Rogers.
If the remainder will comply with the common law remainder rules, the remainder is not destroyed.
If the remainder cannot possibly comply with the common law remainder rules, the remainder is not destroyed.
If it is unknown as of the time of the grant whether the remainder will comply with the common law remainder rules, the rule in Purefoy v. Rogers will not save the remainder. It must comply with the common law remainder rules or it will be destroyed. Consider the following;
---> Grant To A to the use of B for life, remainder to the use of C at the age of 19.
As a result of this grant, after application of the Statute of Uses, B holds a life estate at common law and C holds a contingent remainder in fee simple at common law. Unless C is at least 19 at the time of the grant, it is not possible, as of the time of the grant, to determine whether the contingent remainder will comply with the common law remainder rules. Therefore, it must. If C does not reach the age of 19 before the death of B, the remainder will be destroyed.
---> Grant To B to the use of C for life, remainder to the use of D one day after the death of C.
After application of the Statute of Uses C holds a life estate at common law. D holds an estate in remainder in fee simple at common law. It is clear that, as of the time of the grant, the remainder could not possibly comply with common law remainder rule #2. Thus, it need not. D's estate in remainder will not be destroyed by the common law remainder rules. If the grantor, in the previous grant, had also granted a remainder to the use of E in fee simple this remainder would also have been saved by the rule in Purefoy v. Rogers. It may be worthless, but would nonetheless remain intact.
D) Estates Administration Act(3)
S 2 (1) of this statute provides that when someone dies:
All real and personal property that is vested in a person without a right in any other person to take by survivorship, on the person's death, whether testate or intestate and despite any testamentary disposition, devolves to and becomes vested in his or her personal representative from time to time as trustee for the persons by law beneficially entitled thereto, and, subject to the payment of the person's debts and so far as such property is not disposed of by deed, will, contract or other effectual disposition, it shall be administered, dealt with and distributed as if it were personal property not so disposed of. R.S.O. 1990, c. E.22, s. 2 (1).
The effect of this section is that immediately following the death of a person who had held property in land immediately before the time of his death, an administrator holds the property in land previously held by the dead former person. The administrator holds the property in trust for the heir or anyone devised property.
The administrator may have been named in a will as executor or may be appointed by a judge. Note that in the case of appointment by a judge, the administrator retroactively acquires the property.
Consider the following devise:
--à to A to the use of B for life, remainder to the use of C one day after B dies
The devisor tried to make A the trustee for B and for C.
Apply the Statute of Uses. A holds nothing. B holds a life estate at common law and C holds an estate in remainder at common law. The heir of the devisor holds a one day leasehold at common law
Apply the Estates Administration Act. The administrator holds an estate in fee simple at common law, B holds a life estate in equity and C holds an estate in remainder in equity. The heir of the devisor holds his leasehold estate in equity.
E) Andrews v Partington (1791), 3 Bro. C.C. 401, 29 E.R. 610 (Eng.)
This is a rule in equity for the benefit of trustees. By this rule, a class of beneficiaries is closed when the first beneficiary is entitled to claim his share.
Consider the following grant:
-à unto and to A to the use of B’s children at 25
Look at the baby generator, B
If B is dead at the time of the grant, the children of B are determined and lives in being. The class of beneficiaries is therefore closed. Each child of B greater than or equal to 25 holds an estate in fee simple in equity. Each child not yet 25 holds a contingent remainder in equity with the condition precedent of turning 25.
However if B is alive at the time of the grant, the children are not determined.
Either there is a child of B who is 25 at the time of the grant or not.
If there is a child who is 25 at the time of the grant, that child is entitled to claim his share, and the class of beneficiaries is closed. Therefore, any child who is conceived at that point holds a contingent remainder in equity, with the condition precedent of turning 25. Any child conceived after the first beneficiary is entitled to claim his share holds nothing.
If there is not a child who is 25 at the time of the grant (and remember we are assuming here that B is alive at the time of the grant), B could produce a child one year after the time of the grant, B could then die along with all other lives in being at the time of the grant. That child would turn 25 more than 21 years after the death of all the lives in being at the time of the grant. That remainder is therefore destroyed and, in this scenario only, A holds an estate in fee simple at common law and, since there is no indication that A was to benefit from the grant, A holds his estate to the benefit of the grantor.
Quiz: Apply the Statute of Uses to the following grants. Who holds what form of property as a result of these grants?
1. To B to the use of C for life, to the use of D for life, remainder to the use of E.
2. To B to the use of B, to the use of C for life, remainder to the use of D at the age of 21.
3. Unto and to B, remainder to the use of C.
4. To B to the use of C for life.
5. To B to the use of C for 10 years, to the use of D for life, remainder to the use of E.
1. The
word "use" need not be used to create a form of property in equity.
The key issue is that A is holding the property for B. Consequently, words
such as "in trust for", "for the enjoyment of" would suffice
to create an equitable form of property in that land.
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2.
(1671), 2 WMS Saund 380, 85 ER 1181
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3. R.S.O. 1990, c. E.22
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